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Iran becomes a haven for Chinese miners

11 April 2019 11:27, UTC
Iran becomes a haven for Chinese miners

After the introduction of the government ban on mining cryptocurrency in China, local miners began to actively seek new locations to continue their activities. Iran, which has been experiencing difficulties for a long time due to the imposed sanctions and economic embargo, has become one of the main areas of resettlement. This Middle Eastern country is also famous for its incredibly low cost of electricity, which became possible due to the huge reserves of natural gas. Now in Iran, the cost of a kilowatt-hour is at the level of 0.006 US dollars, which is more than two times cheaper than the similar tariff in China, where consumers have to pay 0.015 dollars per kWh in the summer and 0.04 dollars in the winter.

However, because of the impressive state subsidies for electricity, the Iranian government has added energy-intensive mining equipment to the list of goods prohibited for importation.

“The risk of miners being detained and confiscated at the border is quite high. It’s said that Iranian customs have so far confiscated at least 40,000 crypto mining rigs of varied models,” said Liu Feng, who is managing one of the largest mining farms. Despite the fact that he managed to import more than 3000 ASIC Antminer T9 units into the country, Feng faced new problems. Thus, the electricity supplier, with whom the businessman agreed on a 30 percent share of the profits, doubled the cost of electricity and demanded a 50% share two months later. As a result, the Chinese miner was forced to sell his first Iranian farm. The second attempt to organize the process was also unsuccessful, as local residents complained about the noise pollution, and as a result, all the equipment was confiscated by the authorities.

However, the situation has changed, says He, director of one of the country’s largest firms. The government of Iran has created an industrial park of cloud computing within the bonded zone, where the import and export of mining equipment are allowed and is not even taxed.

“Mining investors need to pay a certain amount of refundable electricity deposit to the Iran’s state grid. Small and medium-sized miners could apply to enter the industrial park in group,” he added.

Now the industrial park has a capacity of about 900 megawatts and can accommodate from 500,000 to 600,000 mining machines simultaneously.

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