The authorities of one of the Russian regions intend to organize cryptocurrency mining farms near coal deposits in order to slow the decline in activity in the main sector of the region’s economy.
The leadership of the Kemerovo region in Siberia believes that this will be an economically justified step, since the initial investment in cryptocurrency mining equipment can pay off in just a few years.
According to official data, a cryptocurrency mining farm located next to a coal mine can recoup its investment in about four to five years.
Economists estimate that setting up a new cryptocurrency mining facility, including specialized heating equipment, will cost around 5 billion rubles ($62 million).
The annual profit from its work is expected to be approximately 1 billion rubles (more than 12 million dollars), as the head of the Kuzbass government, Andrei Panov, told the TASS agency.
Kuzbass (Kuznetsk Basin) is one of the largest coal mining regions of Russia, located in the Kemerovo region in southwestern Siberia.
Panov’s statements came after the Governor of the Kemerovo Region, Ilya Seredyuk, announced his intention to instruct relevant departments to consider the economic feasibility of creating power plants, greenhouses, and crypto farms on the territories of coal mining enterprises.
This could slow the rate of decline in coal production in the region, Seredyuk emphasized. Both officials were also quoted on Monday by the Gazeta.ru news portal.
According to preliminary calculations, investments in the amount of 4.6 billion rubles can provide the cost of electricity at 3 rubles per 1 kWh (less than 0.03 US dollars), Panov specified. He also added:
“This efficiency can be achieved by burning just 50,000 tons of coal per year.”
The experts who carried out the calculations are confident that the annual profit could reach 1 billion rubles, which would ensure a full return on the initial investment in mining equipment in just four years.
Last year, the emission of digital currencies was legalized in Russia. Since then, both companies and individual entrepreneurs can engage in mining, provided they register with the tax service.
The legalization of this sector has caused a boom in the mining industry, which has subsequently led to a growing shortage of electricity and interruptions in the distribution networks in some regions of the country, where attracted miners low electricity tariffs.
To cope with the situation, authorities in a number of regions introduced seasonal restrictions during periods of peak electricity consumption. In about a dozen territories, these were subsequently replaced by permanent bans.
Despite the fact that mining competes for electricity with other consumers and important sectors, including data centers developing AI, Russia has not yet abandoned Bitcoin mining.
The vast country has a number of competitive advantages in this area, such as a cool climate and rich energy resources, including oil, gas and nuclear power.
In May, Russian Deputy Energy Minister Yevgeny Grabchak suggested that crypto miners move to regions with excess generating capacity, where they would be able to use more affordable electricity.
The official explained that similar conditions can be found at abandoned oil wells in the north of the country. Mining companies can also use their transmission infrastructure, which is currently not in use.
Later that month, the head of the Ministry for the Development of the Far East and Arctic, Alexey Chekunkov, proposed offering surplus natural gas to Russian crypto miners amid a decline in supplies from Europe.
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Source: cryptonews.net
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