Yakutia, the vast and energy-rich region in the Russian Far East, is planning to mine cryptocurrency with the global leader in diamond extraction, Alrosa.
The local government is now exploring options to install coin minting facilities at gas wells operated jointly with the giant producer of precious stones.
Yakutia wants to mine Bitcoin at Siberian gas fields
Authorities in the Republic of Sakha, as Yakutia is officially called, are considering building crypto farms at the sites of two massive natural gas deposits in its territory.
The Ulugurskoye and Ergedzheyskoye gas fields are being developed by Ulugurneftegaz, a joint venture between the local energy company Sakhatransneftegaz and Alrosa.
The Russian business daily Vedomosti broke the news this week, citing two knowledgeable sources, a person familiar with the government plan and an employee of the mining company.
The town of Mirny-registered Ulugurneftegaz was established in 2018 as a gas extraction enterprise that has been reporting losses lately, the regional news outlet 14.ru noted in a post on Friday.
The sanctioned Alrosa, which is the planet’s biggest diamond mining group by volume, owns 75% of the joint-stock company, while the remaining 25% belongs to Lensk-Gaz, a subsidiary of Sakhatransneftegaz.
The gas reserves of the Ulugurskoye field, which covers an area of 4,200 square kilometers, have been estimated at 217.3 billion cubic meters, while the smaller Ergedzheyskoye field holds 78.3 billion cubic meters of natural gas, the report detailed.
The initial plan of the authorities was to utilize these reserves by connecting the fields to the Gazprom-operated “Power of Siberia” pipeline, but it was later decided to use the fuel to supply the Alrosa facilities in the area. They are now evaluating the possibility of mining crypto at these sites.
A similar business model is also under consideration for other wells, such as the Otradninskoye gas condensate field developed by Lensk-Gaz, the business news portal RBC remarked in a report.
The constriction of pipelines to some distant gas fields is not economically feasible, but these areas can accommodate mining facilities, explained Aisen Nikolaev, chairman of the State Council Commission on Energy and Head of the Republic of Sakha. At the end of October, he told TASS:
“Mining and electricity generation for computing systems are especially relevant for remote areas with local energy resources, like gas and coal, which they are unable to export.”
Russia is looking to move mining farms to places like Yakutia
The Russian Federation legalized the minting of digital currencies like Bitcoin in 2024, aiming to exploit its abundant energy resources and climatic conditions that help cool down the hardware.
However, mining has since caused a lot of headaches for authorities in areas attracting miners with low electricity rates. About a dozen Russian regions have already banned the activity, citing growing power deficits.
Ideas to move crypto farms to places with fewer other consumers and surpluses of energy have been voiced by a number of Russian officials this year.
Miners may be asked to relocate to Russia’s north, where they’ll be able to use excess power-generating capacities at depleted oil fields, Deputy Minister of Energy Evgeny Grabchak revealed in May.
Later that month, the head of the Russian Ministry for Development of the Far East and the Arctic, Aleksey Chekunkov, suggested offering mining companies some of the fuel that’s not being exported due to the loss of European markets.
And in August, the authorities in Kemerovo Oblast announced they are planning to build crypto farms near coal mines, hoping to slow down the decline in the region’s main industry.
Yakutia is Russia’s and the world’s largest country subdivision by territory, but is sparsely populated, with fewer than a million residents. It has some of the coldest settlements on Earth, like the capital city of Yakutsk, and is very rich in energy resources.
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