Chinese Crypto Mining Giant Taps Ethiopia’s Energy for New 51MW Facility

Key Takeaways

• BIT Mining signed a $14 million deal to acquire a 51 MW Bitcoin mining facility in Ethiopia.
• This expansion marks the company’s first venture outside Ohio.
• Ethiopia’s cheap electricity, 70% less than Ohio’s, makes it an attractive location for crypto mining.

BIT Mining, a leading Chinese Bitcoin mining company, is expanding its operations beyond Ohio by acquiring a 51-megawatt mining facility in Ethiopia.

The $14 million deal aims to capitalize on Ethiopia’s inexpensive electricity, a move that could prove profitable as the cost of mining continues to rise in other regions.

A Strategic Move to Recycle Mining Machines

The new facility, which will house 18,000 mining machines, provides BIT Mining with a major opportunity to increase its profitability by tapping into Ethiopia’s abundant, low-cost energy.

Ethiopia’s electricity prices are 70% cheaper than those in Ohio, offering a competitive edge in the global mining market.

In addition to the cheap electricity, BIT Mining plans to use the Ethiopian facility to recycle its mining machines, which are becoming less profitable in high-cost regions like Ohio.

With increasing competition and rising electricity prices, even the latest mining rigs become unprofitable after just 2.5 years.

By relocating older machines to Ethiopia, BIT Mining can continue to generate profits from equipment that would otherwise be deemed obsolete in more expensive markets.

Dr. Youwei Yang, BIT Mining’s chief economist, emphasized that intense competition in the U.S. is making even the latest ASIC miners obsolete within two years, prompting the company to seek more cost-efficient solutions.

Ethiopia’s Energy Advantage

Ethiopia could offer similar profitability to China, which has long been a hub for crypto mining due to its renewable energy resources.

However, China’s blanket ban on crypto mining has forced companies like BIT Mining to relocate their operations.

Despite its low energy costs, Ethiopia currently accounts for just 1.5% of the Bitcoin network’s hash power.

The country’s limited involvement in the global mining landscape is largely due to regional political instability, including ongoing civil conflict.

BIT Mining’s expansion into Ethiopia could mark a turning point for the country’s mining industry and attract more businesses seeking lower operational costs.

Looking Ahead: Increased Profitability and Growth

Xianfeng Yang, CEO of BIT Mining, expressed optimism about the company’s future prospects, stating that the expansion into Ethiopia will help the firm enhance its competitive edge and profitability.

“With our expanded market presence and robust operational capabilities, we are well-equipped to further solidify our competitive edge and enhance our profitability and financial standing, paving the way for long-term, sustainable growth,” he said.

BIT Mining expects to extend the lifespan of its mining operations as it installs new mining rigs in Ohio and moves older, less profitable machines to Ethiopia.

This strategy is designed to mitigate the increasing difficulty and costs of mining as more operations come online globally, including in Russia and other countries with favorable regulatory environments.