In the Russian Republic of Buryatia, a new cryptocurrency mining facility is being constructed with assistance from a business connected to the government. A subsidiary of Bitriver, the largest mining company in Russia, is currently building the infrastructure for the large-scale project.
The Russian Far East and the Arctic Development Corporation (KRDV) announced that a 100 megawatt data processing facility devoted to the production of digital coins will open this year in Buryatia, a Russian republic in south-central Siberia.
The project will cost around 900 million rubles (more than $12.3 million), according to a press release, which was cited by the business news website RBC. The 30,000 mining machines that will be housed in the facility are expected to start operating in the first half of 2023.
Buildings and other infrastructure are already being constructed, along with the provision of the necessary power equipment, according to Bitriver-B, a subsidiary of the massive Russian mining company Bitriver. The company estimates that the new business will generate 100 new jobs.
The location of the bitcoin mining farm is in the village of Mukhorshibir, which is part of the “Buryatia” Priority Development Area, a region of the republic where a special legal system has been put in place to support business operations.
The Russian Ministry for Development of the Far East and the Arctic and the President’s Plenipotentiary Representative in the Far Eastern Federal District are both subordinates of the management firm KRDV. Its main task is to help investment projects in Russia’s Far East and the Arctic.
“Bitriver-B has been given access to a wide range of government support resources, helping it to establish one of the most significant businesses for Buryatia’s digital development. These include no property or land taxes, 7.6% insurance premiums, and a lower income tax rate, according to Dmitry Khameruev, director of KRDV Buryatia. The executive continued, “The bitcoin farm will also pay for the electricity it will use at almost half the regular tariff.”
The major mining project’s announcement follows news last week that Russia’s industrial mining farms will have a combined power capacity of more than 500 megawatts by the end of 2022. The country’s mining potential has been negatively impacted by sanctions targeting it as part of punishments for the invasion of Ukraine, despite the decline in the cryptocurrency market last year and the sanctions’ negative impact.