Mining operations turn up in places with no obvious industrial logic: remote hydro sites, gas fields, wind farms far from cities. The common factor is electricity that has no other buyer.
Some power cannot reach demand
Generation is only valuable where transmission can carry it to consumers. Building that transmission is expensive and slow, and it is not always justified.
A hydro site far from population centres, or gas produced alongside oil in a remote field, may generate energy no network can collect.
That energy is either wasted, vented, or sold at prices barely above zero, because the producer has no alternative buyer.
Mining is unusually portable
Most industrial electricity consumers need staff, supply chains and customers nearby. A mining site needs power, a network connection and cooling.
The machines fit in shipping containers and can be relocated when conditions change, which suits sites whose supply is temporary.
Being able to move to the generator rather than requiring the generator to reach a market is the entire basis of the arrangement.
Interruptibility is worth paying for
Grid operators must match supply and demand continuously, and demand that can be switched off within seconds is valuable to them.
Mining loads can stop almost instantly at no damage and restart just as fast, which few industrial processes can do.
Operators therefore sign agreements to curtail during peak periods in exchange for cheaper power at other times, being paid for flexibility as much as consuming energy.
Flared gas is a specific case
Oil production releases associated gas, and where no pipeline exists it is burned off at the wellhead because releasing it directly is worse.
Generators placed at the site can burn that gas to produce electricity for mining containers, converting a waste stream into a revenue stream.
The arrangement depends on oil economics rather than on energy markets, so these sites appear and disappear with drilling activity rather than with power prices.
The economics are tightly bounded
Mining revenue per unit of energy is set by network difficulty and price, neither of which the operator controls, so the only variable is input cost.
That forces operations toward the cheapest available power, and cheap power is generally cheap because nobody else can use it.
When difficulty rises or the reward halves, the marginal sites go offline first, and machines migrate to wherever the next cheapest supply has appeared.