Rising Energy Costs Threaten Bitcoin Mining in Paraguay

A recent 14% increase in energy tariffs for cryptocurrency miners in Paraguay is prompting mining projects to exit the country, reports Bitcoin.com.

Industry insiders indicate that companies are exploring alternatives in neighboring Argentina and Brazil. One such initiative is a joint venture between representatives of the two countries in the Zapala free economic zone.

Zapala Mining and Patagonia 360 aim to capitalize on opportunities provided by one of Argentina’s largest oil fields — Vaca Muerta.

The project commenced in October 2023 with a capacity of 8 MW and plans to reach 200 MW by 2026.

According to Fernando Arriola, President of the Paraguayan Chamber of Digital Technology, several industry companies have already filed documents to relocate their business to Argentina.

He noted at least six companies have migrated, as energy tariffs in the neighboring country are “more favorable.” Arriola pointed out that the process is somewhat hindered by the complexities of transporting equipment.

“I have no doubt in predicting the migration [of miners] from Paraguay to Argentina and Brazil in the next six months,” he stated.

In April, Paraguayan lawmakers proposed a temporary ban on mining in the country. The initiative failed to gain support, but Hashlabs Mining estimated such a move could result in a loss of over $200 million in annual investments from industry players.

Back in March, American company Giga Energy began bitcoin mining using flare gas energy in Vaca Muerta.