China’s mining industry is bracing up for what could be a tougher future, as government authorities have begun adopting policies to stifle their operations. This week, local news source Weixin reported that authorities in the country’s Inner Mongolia region have denied miners access to cheap electricity.
No Reason to Keep Supporting a Pseudo-Economic Concept
Inner Mongolia has been a crypto mining hotspot for some time. The region has a cold climate, access to a skilled labor pool, and abundant cheap electricity. These perks have made it an excellent location for mining bigwigs like AntPool and more to set up their operations.
However, as Weixin reports, preferential electricity prices will no longer be available to mining companies. The policy reportedly took place yesterday, with authorities reportedly being spurred by concerns over mining farms. Per the report, the significant issue came from the government’s sudden lack of an incentive to continue with the program.
While Mongolia has been a mining hotspot for a while, there have been rumors that the government could soon adopt non-progressive electricity policies. Last September, local cryptocurrency news medium ChainNews reported that five government departments had sought “rectification” measures against the region’s growing mining space.
The departments include the Development and Reform Commission, the Office of the Ministry of Industry, the Public State Department, the Big Data Bureau, and the Financial Office. Per ChainNews’ report, the departments believed that mining was a mere construct of the pseudo-financial world and was not related to Mongolia’s “real economy.”
At the time, the department had claimed they would run the rectification process between October 10 and October 30. However, nothing concrete happened. Now that the Inner Mongolia authorities are taking action, they seem to be going after miners’ most valued possession.
The move could see electricity prices rise as much as 33 percent. It would affect up to 21 companies, with some of them being the biggest industry players. However, Weixin also noted that some companies wouldn’t get affected by the new policy.
Miners are also reportedly worried that Xinjiang—a nearby mountainous region in Northwest China—will adopt a similar policy soon.
Sichuan Implements the Crypto Mining Ban
Inner Mongolia isn’t the only Chinese mining hotspot that has taken dangerous policies against crypto mining. This year, a tweet from the Asian FinTech news site PA News confirmed that authorities in the Sichuan region had issued an order to ban crypto mining in the area.
Mining companies have favored Sichuan. The region has an abundance of hydroelectricity, which miners have found to be more cost-effective. This has led to an influx of mining firms in the region. Data from the Bitcoin Mining Map shows that the area is responsible for 9.66 percent of China’s total hashpower. With China itself holding 65.08 percent of global hashpower, Sichuan’s significance can’t be overstated.
As the tweet explained, Sichuan’s financial administrative authority had asked its subordinate agencies to “guide” mining companies to begin shutting their operations. Like Inner Mongolia, the authorities would also be going after electricity, as they reportedly plan to stop investing hydroelectric power in mining.