Chinese mining companies may be left without electricity

The Yinjiang City Industry and Commerce Administration, which enforces enterprise and consumer protection laws, issued a notice to local mining companies requiring them to register with the Yunnan Provincial Energy Supply Administration. Otherwise, their power supply will be cut off and operations will be automatically suspended.

The fact is that the authorities discovered that most of these companies use cheap government-subsidized electricity, and no one monitors their activities, since the industry is still young and developing very rapidly. The companies earn large profits and do not even have an official name.

China is known to lead the mining operations market and is home to most of the major players in the industry, including Bitmain and other companies that not only manufacture mining equipment, but also operate large mining pools where groups of miners pool their equipment to increase their chances of calculating the next block.

Cheap or subsidized electricity is the main advantage of carrying out mining activities in the country. For example, in Yunnan province, which has large coal reserves, electricity costs US$4 per kilowatt hour. This is much lower than electricity tariffs in Europe and the USA. In addition, mining companies ask for additional rebates from local hydroelectric power plants and, as a result, some of them spend only a few cents per kilowatt per hour. 

As part of regulatory reform, Yunnan provincial authorities decided to set new rules requiring such companies to register their real name, pass a tax inspection, show their source of funding and even indicate how much electricity they plan to consume per month.

In its notice, the agency also prohibited power plants from selling electricity to mining companies at lower prices. Thus, the government intends to bring order to energy consumption and monitor the activities of these companies, receiving taxes and controlling the amount of energy used.

According to newsbtc.com