Located in Neuquen, Argentina, the area known as the Zapala Free Zone aims to incentivize a number of productive activities. This year, it will be on the receiving end of its first investment related to bitcoin mining. The mining farm’s power structure will be created by a company that plans on generating in excess of 114 MW worth of power in the first year in order to conduct mining operations. Zapala is a free trade zone and for 2023 it wants to have that much mining power, which can be used for transforming the area into a powerhouse for bitcoin mining.
Already bitcoin mining has been incentivized in Zapala because there are no taxes charged for using public services because it is a free trade zone. Authorities of the province will be provided with a business plan that details the project. The investment is expected to be valued at $20 million and will be made by the first quarter of 2023. John Blount, FMI Minecraft’s managing director, said that the project in question would be a phased construction. Moreover, it will include a data center of 100 MW high-density to facilitate an industrial BTC miner, or data processor.
Furthermore, it will have the capacity to be expanded to about 1 GW. Zapala Free Zone’s chief executive, Fernando Montero explained that in order to accomplish this, they would have to install a gas pipeline of more than 100 kilometer in the first year. The CEO further talked about the advantages of launching such projects in the zone. He said that the fact that they are a Free Zone means that they do not have to worry about taxes associated with some projects. Obviously, this means that the area has become attractive for investments that are related to technology, mining and oil and gas.
He said that they were based in the heart of the Argentinian province and this meant that they had good accessibility. In recent times, Argentina has gained the attention of Bitcoin miners because it appears to be a favorable destination for them to be able to carry out their operations. Another mining company called Bitfarmsis also working on establishing a large mining center in the country, which will have a capacity of 210 MW and would be able to cater to about 55,000 bitcoin miners. Reports have revealed that the primary attraction of Argentina is because of the low cost of power that is needed for mining activities.
Emiliano Grodzki, the chief executive of Bitfarms, disclosed that they have obtained power for a cost of 2.2 cents for every kilowatt hour. He called this a very ‘attractive rate’. With China launching a crackdown against crypto mining last year, a number of miners have had to shut down while others have had to look for other locations to launch their mining operations. They have been looking for places that offer low rates of electricity because crypto mining is a power-hungry activity and requires a great deal of energy.