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Block reward mining: $20M facility gets green light in Kyrgyzstan

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Kyrgyzstan has given the nod for a new block reward mining facility at one of the country’s largest hydroelectric stations.

The landlocked Central Asian country, which neighbors China and the world’s third-largest mining hub Kazakhstan, approved a mining company that will spend $20 million to construct the mining farm at the Kambar-Ata-2 Hydro Power Plant, local media reports.

Speaking to the media, Kyrgyz President Sadyr Japarov said that contrary to media reports, his government is committed to empowering miners. The country produces surplus electricity in the summer and ends up losing over 30MW annually. In the 13 years since the construction of the Kambar-Ata-2 power plant, the country has lost 3.27 billion som (US$37 million).

“All previous negligent leaders can be held accountable for this. Why did they ignore the loss of 30 MW for 13 years?”

Block reward miners can utilize this surplus power for most of the year, creating employment for locals and paying taxes to the government, Japarov said. During winter, when the Kyrgyz people need extra power, the miners will be ordered to halt operations.

The president added that the Kyrgyz Republic is already reaping the benefits of its decision to permit miners to set up in the country. One of the miners reportedly pays $5.5 million in electricity costs to a power plant in the northeastern province of Kemin. This miner also paid $2.6 million to the government in taxes last year.

The new mining facility will benefit the local region and boost the economy, President Japarov added.

“As soon as the mining farm starts working, the earned money will go to the power engineers or, to be more precise, to the ordinary people. Each tyiyn, every kWh will be under the control of power engineers. Everything will be automated and under our control,” he said.

Neighboring Kazakhstan became a mining destination after China’s crackdown on the industry. In 2022, the government made $7 million in taxes from miners. However, the sector has fallen out of favor and has been blamed for constant blackouts. The Kazakh government has since then implemented new laws that have limited mining activities in the country.

Watch: Think of Bitcoin mining as financial self-discipline

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