Ethiopia’s Cheap Power Is Attracting Chinese Miners: Bloomberg
Chinese cryptocurrency mining companies are increasingly turning to Africa, particularly Ethiopia, for their mining operations, according to a new report from Bloomberg.
Ethiopia, like China, has officially banned cryptocurrency trading but legalized Bitcoin mining in 2022. Now, after years of searching for new investment hubs following China’s cryptocurrency ban in 2021, Chinese companies are increasingly investing in operations in the African country.
According to Bloomberg, 19 of the 21 companies that have signed deals with Ethiopia’s power monopoly are Chinese. Miners are attracted by Ethiopia’s cheap electricity. Despite the fact that almost half of all Ethiopians live without access to electricity, 92% of that is supplied by hydroelectric power. Ethiopia’s warm climate also benefits mining operations, while higher temperatures in Texas, the largest mining hub in the U.S., make cooling machinery more expensive.
According to the report, some miners may even disguise themselves as other workplaces, such as factories or agricultural projects, to access electricity without official state approval for Bitcoin mining. But similar operations in Iran and Kazakhstan were shut down after an abrupt shift in government. Ethiopia’s potential political upheaval makes investing there a gamble, according to the report.
Elsewhere in Africa, in the Democratic Republic of the Congo, hydroelectric power has been used to benefit national parks and local residents.
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