The next mining capital of the world? 40 companies around the world have submitted mining applications to Russia

Companies from China and the European Union (EU) have begun applying to mine in Russia, a country that already has several cryptocurrency mining farms but still has excess electricity for foreign companies to set up mines.

40 applications received

The Russian Association of Blockchain and Cryptocurrency (RACIB) has received 40 applications from companies and individuals from EU countries and China to place mining equipment in Russia to mine Bitcoin. The association’s chairman, Yuri Pripachkin, announced the news last week.

He said:

There are already hundreds of mines in Russia, and our country has abundant energy that can be sold to miners.

RACIB was officially established in August this year, aiming to unite blockchain industry players, coin holders, miners, and cryptocurrency and ICO investors. Its establishment was announced by Herman Klimenko, the Internet advisor to Russian President Vladimir Putin.

New markets and legislative needs

Pripachkin commented on cryptocurrency mining in Russia:

In fact, this is a new market for energy companies, and it is important to build a legislative basis and, if possible, provide preferential taxation policies for such foreign investors.

According to the association's director Arseniy Shcheltsin:

We have set up a committee whose members are mining market participants, and representatives from China and Slovakia have already joined, and they have submitted applications to increase the investment attractiveness of the Russian mining industry. The final decision will be handed over to the Russian Ministry of Economic Development and the Ministry of Energy.

Pripachkin believes that “Russia could well become the mining capital of the world.”

Rich power resources

According to the Ministry of Energy, as of December 31, 2016, Russia's power plants produced a total of 244.1GW (gigawatts). Pripachkin said that at the time, the country's peak electricity consumption was only 154.3GW, which means there was plenty of electricity available:

Considering that Russian energy companies currently have nearly 100GW of excess electricity, the investment they attract will reach 1.7 trillion rubles per year.

Shcheltsin said in an interview last week that favorable electricity prices are the main factor driving the development of the mining industry in Russia.

Placing hundreds of 3MW (megawatt) mining machines can generate an average daily revenue of 0.5 bitcoins or about 200,000 rubles.