BISMARCK, ND – A crypto mining company plans to redevelop an anti-ballistic missile site in northeastern North Dakota that was abandoned in the 1970s into a data center that can be used to mine bitcoin and other digital currencies, Gov. Doug Burgum announced Monday.
Bitzero Blockchain Inc., which is backed by strategic investor and “Shark Tank” star Kevin O’Leary, announced last month that it planned to make North Dakota its headquarters for North American operations. The company said within three years it intends to build 200 megawatt data centers in the state and is involved in a joint venture to become an assembly and distribution hub for graphene battery technology.
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Long considered a white elephant and a waste of taxpayers’ money, the site at Nekoma grew out of a 1972 treaty between the United States and the Soviet Union.
The $6 billion Stanley R. Mickelsen Safeguard Complex once housed a radar system within a concrete pyramid, with 7-foot-thick, steel-reinforced walls. It was deactivated in 1976 after only a few months of operation. Nekoma’s population reached several hundred, compared to about 30 today, and surrounding towns benefited from an influx of highly paid missile experts and support personnel.
The Cavalier County Job Development Authority has owned since 2017. Spokeswoman Carol Goodman said the facility will be sold to the company for $250,000.
Burgum said waste heat captured from the data center’s servers will be used to heat an on-site greenhouse, and the company also plans an interpretive center, representing a total investment estimated by Bitzero at $500 million.
“This important piece of history will be restored and become a beacon of innovation in North Dakota to the rest of the world,” Burgum said.
Bitzero has signed leases in both Bismarck and Fargo for administrative operations. The Nekoma site will be their primary data center location in North Dakota, Burgum spokesman Mike Nowatzki said.
Separately, Burgum in January announced construction of a $1.9 billion data center located near the largest city in the state’s northwest North Dakota oil production region.
The second-term Republican governor hailed the Atlas Power Data Center to be built by Missoula, Montana-based FX Solutions Inc. as one of the largest such centers in the world, and one that will help diversify the economy of the Williston area, which has suffered from oil boom-bust cycles for decades.
Burgum, a wealthy former Microsoft executive, called data centers an “incredibly forward-looking industry that doesn’t depend on the price of oil.”
Uses for data centers include mining bitcoin and other digital currencies. Cryptocurrency mining involves supercomputers to solve complex calculations necessary to provide security for transactions in the digital currency.
The process requires large amounts of electricity and generates a lot of heat. Burgum has said that North Dakota is an ideal location for data centers because it has a reliable and affordable power supply, and a climate that lowers cooling costs.
Burgum spokesman Nowatzki said no public money has been earmarked for either project, although they are expected to qualify for tax credits already given to agriculture, energy and other industries.
