Authorities in the Russian region are planning to establish cryptocurrency mining farms near the coal mining sites as part of an effort to slow the decline in the region’s major industries.
Local officials at Siberian Kemerobo Oblast believe this is economically viable, as it only takes a few years to return the initial investment in crypto mining hardware.
Coin mining saves Kuzubas coal mines
According to an official evaluation conducted in the Kemerovo region of Russia, the crypto mining farm running next to the coal mine can pay for itself in about four to five years.
The economists calculated that building a new coin mining facility, including a dedicated heat plant, would cost around 5 billion rubles ($62 million).
At the same time, they expect about roughly 1 billion rubles (over $12 million) in annual profits (over $12 million) from their operations, Kuzbas regional government Andrei Panoff told TASS News Agency.
The Kuzbas, or Kuznetsk Basin, is one of the largest coal mining regions in the Russian Federation. It is located in Kemerovo Oblast in southwestern Siberia.
Panoff’s statement comes after Governor Kemerovo Ilya Seredik announced that he intends to direct relevant agencies to consider the economic feasibility of power plants, Midoriya and crypto farms on the mining company’s premises.
This could reduce the rate of decline in coal production in the region, Selediuk emphasized. Both officials were also cited on Monday by the Gazeta.ru news portal.
Preliminary estimates suggest that an investment of 4.6 billion people can provide a power cost of 3 rubles per kWh (less than $0.03). He explained more in detail:
“This kind of efficiency can be achieved by burning 50,000 tonnes of coal per year.”
The calculation experts are confident that annual profits could reach 1 billion rubles, ensuring a full refund of initial investments in mining equipment in just four years.
Russia is trying to find a location for crypto mining
The minting of digital currency was legalized in Russia last year. Since then, registration for tax purposes will allow both companies and individual entrepreneurs to mine freely.
The legalization of the industry caused a mining boom, which was later criticised for the increased and collapse of the distribution networks of some of the countries that attracted miners with low power rates.
To address this situation, many local authorities have imposed seasonal restrictions for several months of peak power consumption. In about 12 territories, these were eventually replaced by permanent bans.
Despite competing for energy with other consumers and key sectors, including data centers dedicated to artificial intelligence (AI) development, Russia has not yet given up on mining Bitcoin.
The vast country has many competitive advantages in this sector, including cool climates, in addition to abundant energy resources such as natural oil, gas and nuclear power.
In May, Russian Deputy Energy Minister Evgeny Grabchak proposed that Crypto Miner be relocated to an area with excessive power generation capacity, where it would enjoy cheap electricity.
Such conditions can be found in abandoned oil wells to the north, government officials have elaborated. Mining companies can also take advantage of transmission infrastructure that is not currently in use.
Later that month, Alexy Chekinkaff, the provincial leader for the development of the Far East and Arctic Circle, proposed to provide surplus natural gas to Russian cryptocurrency miners amid declining delivery in Europe.
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