Iron ore towns in western Labrador are positioning themselves for a different king of mining, one that involves computers, bitcoins and data storage.

There are no hauling trucks or heavy machinery — just two former storefronts in Labrador City.

"Data mining is essentially what this is," said Bob Griffin, a co-founder of Great North Data (GND).

"And it's interesting that we've gone to a mining town to do a different kind of mining."

Companies use data centres as third party storage for their data. They can use them as clouds or archives, or in the case of GND, a tool to mine for bitcoins.

bitcoin-token-feature

Bitcoins are a currency used in the data storage business.

Bitcoins are an online currency. Mining them is much different than mining for iron ore. They are created by computers solving mathematical equations. Computers are used to solve these equations and are issued bitcoins in exchange.

"It's what's growing, it's the new emerging thing and we wanted to really cater to that because we think that's where the opportunity really lies," Griffin told the CBC

GND already has one centre set up in Happy Valley-Goose Bay. A gutted green building on Avalon Drive will soon be filled with rows and rows of computers running equations.

Another company, North 53 degrees, that is setting up in an old mall in the Harrie Lake subdivision, declined our request for an interview.

Permits issued data mining

Two companies are in the middle of setting up data storage facilities in western Labrador. (Jacob Barker/CBC)

Power supply, cold climate

Labrador West is seen as an ideal location for a couple of reasons.

"Just like iron ore mining, energy cost is crucial in breaking even and profiting," said Griffin.

"The situation is there is surplus power in Labrador West and they don't have a use for it right now and we are filling a huge gap that's been left by the iron ore industry."

Another incentive is the climate.

"These machines get very hot and it saves a lot of money if you can cool them with cold air outside," said James Goodwin, also a co-founder of GND.

'We are filling a huge gap that's been left by the iron ore industry.'           - Bob Griffin, Great North Data

"Lab West climate is perfect for data centres. You couldn't have picked a spot that's colder that has access to this kind of electricity."

GND is based out of St. John's and keeping the business in the province is also something that's important to the company.

"I'm from St. John's and I'm very pro-Newfoundland and Labrador and I feel this has long since been needed, talked about and I'm really happy to be part of something we can bring to Lab West and we can help diversify and help grow small economies," said Griffin.

Open for business

"We've had some success with data warehousing and I think that will even grow more as we move into the future," Labrador City Mayor Karen Oldford told the CBC.

The mayor sees it as a way for the town to diversify — new industry in a town where there is so much uncertainty around the iron ore industry.

"We're open for business, for that type of business, and we see this industry as a major part of a diversification plan," the MHA for Labrador West Graham Letto said.

"It doesn't create a whole lot of jobs but it generates jobs and every job today is important."

Graham Letto

Labrador West MHA Graham Letto says the area is open for business, especially with the downtown in the mining industry. (Jacob Barker/CBC)

The immense amount of power needed is of concern to Wabush Mayor Colin Vardy.

He said the town has been approached by a data centre company out of China. He has some concerns before deciding how to proceed.

"We have to make sure the power is available but we also have to make sure too that we don't chew up any power that would be needed for the iron ore industry if Wabush Mines were to come back to life or if Alderon were to come on board," Vardy said.

Dave Pearson is a researcher at International Data Corporation and specializes in enterprise storage and networking in Canada. He said though the power draw is heavy, it isn't crippling.

"When you're looking at what's going on in Labrador for example, those kinds of implementations will not provide a great deal of strain on the local grid and certainly not on a province wide or country wide scale," he said

High demand

Pearson said the biggest data centres are in the United States but the market continues to pick up steam in Canada.

"In a very off quarter, Google adds about twice as many servers to their existing stable of servers as the entirety of Canadian enterprise adds," he said.

"So investments in data centres and technology are really key to pushing the envelope on productivity for Canada."

GND seems to have its hand on that envelope. Anybody who might want in on their not-yet-completed data centre is already out of luck.

"It's functionally 100 per cent full and we're not even done yet, and there's an urge for more," said Goodwin.

And those making use of it are from all over the world. The team said there's global interest in Labrador.

Great North Data

Great North Data will be operating out of this former retail building in Labrador City. (Jacob Barker/CBC)

"No-one's ever built a blockchain data centre in Canada this large before and to a large extent, we're kind of creating a plan as we go," Goodwin said, blockchain referring to the dedicated bitcoin equipment.

GND said better infrastructure would be needed if bigger companies like Facebook or Amazon were to take interest.

"Unfortunately there's only one trunk line running into Lab West right now," Goodwin said.

"We already have competition following us here but if they put the investment in the fibreops network, there will be more."