The small Texas town of Rockdale forever changed in 1952 when the Aluminum Company of America opened the country’s largest smelting operation just down the road. The huge investment put thousands to work and added millions of dollars to the local tax base while supplying the material to make everything from jet planes to pots and pans. An article in the Saturday Evening Post that year summed up the situation by proclaiming Rockdale “The Town Where It Rains Money.” Fifty-six years later, the small city’s fortunes would eventually dry up.
In 2008, Alcoa, as the company came to be known, announced it would begin shutting down its operations in Rockdale, citing problems with the power supply and overall market conditions. By 2014, all aluminum production had ceased at the Texas facility. Another 450 workers lost their jobs when the onsite power plant and nearby coal mine that fed it were also shuttered.
Today, there are new players in town, anxious to reverse the town’s fortunes by means not easily understood. At least two bitcoin mining operations are setting up shop, one of them under the roof of the idled Alcoa plant. Rows of mining computers (servers), 16 feet tall and extending the length of three football fields, occupy space once filled with caldrons of molten metal. Tom Maldonado, who worked at the aluminum plant for 35 years, understands every aspect of the aluminum-making process. Mining bitcoin however, is another matter. “I’ve tried to read about it, to figure it out,” he says. “I really can’t grasp how it actually works.”
Reviving a One-Company Town
Like innumerable other towns in 19th-century America, Rockdale sprang up along a railroad line. Lots were auctioned in the fall of 1873, a few months before the railroad’s arrival. The new town was incorporated in 1874 and named itself the city of Rockdale a year later. By 1891 a second rail line was added, followed by a third, hauling loads of cotton and lignite coal from the dozen mines operating in the area. The discovery of oil in 1920 precipitated the construction of a refinery soon after. The population held steady at a little over 2,000 through the Great Depression and World War II, then doubled when Alcoa arrived.
In decline for years, downtown Rockdale is expected to benefit from a planned main street improvement project.
Former city manager Chris Whittaker: “I think it’s kind of a cool concept when you take the old and put something new in it.”
Rockdale sits an hour’s drive east of Austin, with a population that hovers around 5,600. The railroad tracks still run through town, but a train hasn’t stopped here in years. With Alcoa gone and the bitcoin business just ramping up, the school system is the town’s biggest employer. There is a Walmart on the west side, along with a collection of gas stations, restaurants and small businesses. The old downtown though, is suffering from years of neglect. Empty homes and businesses greatly outnumber the buildings that are occupied along the city’s main thoroughfare. Weathered for-sale signs are a common sight.
The local hospital closed two years ago and there are serious problems with the water system. Chris Whittaker was Rockdale’s city manager before leaving this spring to take on a similar job in Angleton, Texas. Hired six years ago after a career in the military, Whittaker recognized that making things better for the residents of Rockdale would also help to draw newcomers. “You have to have infrastructure, and also address the quality of place,” he says.
Whittaker’s biggest fight has been to improve the city’s failing water system. “The water lines on the east side of Rockdale are cast iron pipes, and they’re probably 70 to 100 years old,” he says. “We have a 30 percent water loss.”
The aging water treatment plant was not designed to deal with the iron and manganese that has built up in the pipes, giving tap water a distinct odor and reddish-brown coloring. “I joked when I got here that we should have a red water festival," says Whittaker. After years of complaints, the Texas Water Development Board recently approved a $27.4 million loan and grant package to fix Rockdale’s water system.
One asset that is entirely up to date is the town’s high school football stadium, home of the Tigers and the pride of Rockdale. In 2018, the stadium received a $5 million renovation, the year after they defeated the Brock Eagles to became Texas state champions.
Goodbye Aluminum, Hello Cyrptocurrency
Aluminum is the most abundant metal in the earth’s crust. Since it is not found in a pure state, it must be extracted from bauxite ore in a process developed independently and almost simultaneously by Charles Martin Hall of Ohio and French chemist Paul Héroult in 1886. Two years later, Hall opened the Reduction Company of Pittsburgh, the world’s first large-scale aluminum production plant. In 1907 the company changed its name to The Aluminum Company of America, before settling on Alcoa in 1998. To this day, all aluminum is still produced using the Hall-Héroult process.
At one time Alcoa’s Rockville plant was one of the biggest in the world. Large-scale production of aluminum requires massive amounts of electricity, which accounts for a third or more of the cost. When Alcoa built its plant in Rockdale nearly 70 years ago, they also constructed a power plant on site, taking advantage of the area’s abundance of lignite, a low-grade coal found close to the surface. The smelter, the power plant and the mine together employed as many as 2,000 workers at one time, offering the best-paying jobs in the area.
The Saturday Evening Post introduced a prosperous Rockdale to the world when it published its article in 1952. Last year, an article in Wired was much less flattering. The Hard-Luck Texas Town That Bet on Bitcoin—and Lost details a promised $500 million investment in the city by Bitmain, a Chinese company that makes computers used to mine cryptocurrency. But as the price of bitcoin plunged throughout 2018, Bitmain shelved its plans to build the largest mining facility of its kind at Alcoa’s retired aluminum plant.
Whinstone’s Chad Harris is adamant that his company be a good corporate citizen.
Workers erect the framework designed to hold tens of thousands of Whinstone’s high-speed computing servers.
Despite its negative tone, the Wired story ultimately brought new business and renewed hope to the beleaguered town. Louisiana businessman and cryptocurrency miner Chad Harris had just lost out on a deal to purchase a much-needed power substation in west Texas when he came across the article.
“I was like, ‘I don't know where Rockdale is, but I know Bitmain,’” he says. “And so I read the article and wrote everybody's name down and I started emailing every single person in there.”
Kara Clore is the executive director of the Rockdale Municipal Development District (MDD) which was created in 2010, a result of Alcoa’s closing and the loss of those jobs. Acting as an office of economic development, the MDD works to recruit new business to the Alcoa site. She had been inundated with cryptocurrency proposals after the Wired story came out, none of them deemed the least bit viable. Clore ignored Harris’ weekend email, something the two of them joke about every time she meets with him and his partners, the Whinstone Group, at their new Rockdale headquarters.
A few prefab buildings set upon cinder blocks give the Whinstone offices the look of a construction company, which for now, is exactly what it is. The old power plant is visible in the distance, peeking over the rows of shipping containers and heavy equipment that ring the expanse of dirt. Situated on 100 acres of land leased from Alcoa, Whinstone is hard at work toward its goal of becoming one of the largest bitcoin mining facilities in the world.
A short, dusty ride from the offices, crews are at work constructing two long, narrow buildings that stretch into the distance. At 60,000 square feet each, one of the structures is only half finished, its steel framework is being erected over a newly poured concrete slab. Even though it’s a weekend, the inside of the completed building swarms with yellow-vested workers busy erecting a lattice of steel shelving specifically designed by Whinstone to hold tens of thousands of high-speed miners, many of which are already in place. A third building is under construction with more to follow. “We will continue building for the next three to five years,” says Harris.
Whinstone has made every effort to become entrenched in the community, sourcing material and labor locally and supporting other businesses in the area. Joan Ratliff, owner of the Rainbow Courts motel, is happy to have Whinstone’s business and pleased with the company’s involvement in local issues. “They have a philosophy that they’re going to support the city,” she says. “They’re on committees, they volunteer, they put money into things.”
Since they moved the company to Rockdale, Whinstone has taken over maintenance of the community swimming pool, opened a dog park, and installed lights at two ball fields so working parents could see their children’s games. When the company shut down for a few weeks during the pandemic, there were no layoffs and everyone continued to be paid. They also “adopted” three high school seniors and recently committed to sponsoring the police department’s K-9 corps.
Clore is happy that Whinstone persisted in locating the business here. “They have donated to just about every single organization in town,” she says. “And not just money. They will actually get out there and do it themselves.”
The Lure of Lofty Promises
Bitmain made some big promises when the Chinese company first proposed building the world’s biggest bitcoin mining operation in Rockdale. Plans called for an investment of $500 million, 400 jobs and more than 300,000 mining computers consuming 500 megawatts of power (bitcoin operations need power-guzzling computers to generate the complex computations that encrypt the currency). As bitcoin’s value plummeted that year, so too did the company’s prospects for profitability, necessitating layoffs and a dramatic scaling back. Today the company’s Rockdale operation employs 32 people, most of whom are temps.
The recent resurgence in bitcoin value has sparked a corresponding increase of activity at the Alcoa site. Bitmain project manager Clint Brown looks down a row of 13,000 mining computers, stacked more than 16 feet tall and stretching 1,100 feet into the distance. A second row of miners takes up half the space but uses machines that consume twice the power. Construction of a third line is underway.
Rockdale native and Bitmain project manager Clint Brown inside the former aluminum plant.
A row of Bitmain mining computers stretches the length of three football fields.
“When we finish the third line, sometime in June or early July, we’ll be at 75 megawatts, and then the next three lines will add another 75,” Brown says. “By the end of this year or the first part of next year, we're hoping to be at 150 megawatts.” Looking further ahead, plans call for an eventual 12 lines. “We can go to 16 if things kick off really good.”
The rows of Bitmain miners are set up where hundreds of Alcoa’s pots, the containers used to process aluminum, used to be. The corrugated metal roof is intact overhead, but most of the siding has been removed, exposing a framework of stained and rusting steel on a raised concrete platform. The immediate area is neat and tidy but little effort has been made to erase signs of the building’s past.
Brown has a vested interested in whether Bitmain succeeds in Rockdale. He was born and raised here. He moved to Houston and traveled the country on construction jobs for 30 years before returning. “I always wanted to come back home,” he says. “If you’re looking for the mall and the movies and all that, it’s probably not for you. But if you’re a country kind of person, this is the place to be.”
Rockdale was already on the ropes when Bitmain pulled back from its lofty promises of jobs and investment last year. Sponsoring little league teams and participating in local events reminds people that they are here to stay but on a smaller scale. “When Bitmain came in and we had the cutbacks, we got a really big black eye,” says Brown. “Not just with Rockdale, but the whole county. We’ve worked diligently to repair that, and I think we're on the right track now.
In Bitcoin We Trust?
In the spring of 1954, the Aluminum Company of America produced a printed program for the dedication of its newest plant. Within its pages, Works Manager John D. Harper had a message for the local citizenry. “Alcoa is proud of the Rockdale Works and we hope you will be proud to have us as your industrial neighbor.” He went on to stress “the economic benefits the Rockdale Works will return to this state, and especially to this area.”
The town has struggled to recover ever since the company pulled up stakes. “Rockdale is a strong community,” says Ratliff of the Rainbow Courts. “Bitmain, and especially Whinstone coming along and being so immersed in the city and helping the city, makes me feel even more confident. And we needed a morale boost. There's no doubt about that.”
After a dropoff in bookings following Alcoa’s departure, Rainbow Courts motel owner Joan Ratliff says business travel is picking up again.
Gary Griesbach and his wife Annette display a souvenir from his days at Alcoa, the remnants of a splash of molten aluminum hitting the plant floor.
Gary Griesbach, a 40-year Alcoa veteran, has more than a passing interest in the history of his former employer. He has been invited to identify artifacts at the site worth preserving for future generations. Looking ahead, he believes the city is ultimately responsible for its own future. “Rockdale isn’t the most pristine-looking town. It needs to be improved and that’s one thing we are working on,” he says.
Mining for cryptocurrency might not be the easiest thing to sell to a community dependent for decades on heavy industry. “I still have a rough time explaining exactly what they do,” says Griesbach. “I can’t go down to the Chevy dealership and say I want to buy this with bitcoins. They’d say, ‘What?’ My concern is we seem to be becoming more and more just a consumer orientation rather than producers. We used to be makers. Now we’re takers.”