Eastern Siberia Lures Crypto Miners with Cheap Electricity
Estonian Minery Global and Russian Minery.ru plan to launch five industrial complexes for cryptocurrency mining in Eastern Siberia by October.
Eastern Siberia is caught in a crypto mining rush as cheap electricity, and suitable weather conditions attract both local and international investors eager to get into the lucrative mining business, Interfax reports.
Minery Global and Minery.ru plan to construct five mining farms close to the IrkutskEnergo hydropower station - three in Bratsk, one in Irkutsk, and one on Ust-Ilimsk. Total project capacity will be 55 MWh, with all complexes getting electricity from IrkutskEnergo through contracts with Bratsk Grid Co. According to the project documentation, the combined electricity costs will amount to $0.07 per KWh.
At present, the project initiators are working to obtain permissions and licenses from local authorities and develop Linux-based software for mining host management. Construction will start in May, and the facilities are expected to go online by October this year.
The companies claim this will become the largest legal mining platform in Russia and will provide hosting services to anyone wishing to jump on the crypto mining bandwagon.
Why Eastern Siberia?
Three critical factors make Eastern Siberia the region of choice for miners and crypto investors: cheap energy, chilly climate, and China’s proximity.
Contrary to popular opinion, crypto mining is a cost-intensive business. Miners’ expenses include several cost items, with electricity bills eating away the most substantial chunk of revenue alongside with cost of equipment updates and maintenance and space cooling systems.
Electricity costs in Irkutsk, one of the largest cities in the region, are much lower than in other areas of the country: consumers pay one ruble ($0.015) for KWh. Currently, about 20,000 KWh go into mining one bitcoin, so in Moscow, it will cost $1,500, in London - $3650, and in Irkutsk something like $350. Commercial prices are higher but still much more attractive than in other locations.
The cold Siberian climate helps save some money on cooling systems for mining equipment as the weather conditions allow to cool the ASIC units naturally.
Last but not least, the Chinese border is located just 1,500 km away. This proximity helps to streamline logistics and reduce shipping costs for mining equipment that needs to be replaced annually. Fast delivery is vital for successful mining business as the difficulty of mining algorithms grows exponentially and requires more advanced hardware.