- August 31, 2023
- Posted by: [email protected]
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Laos, through its state-owned electricity distribution company, Électricité du Laos (EDL), has made the decision to temporarily suspend the supply of electricity to crypto mining operations within the nation. This move comes in response to a series of challenges, including a severe drought experienced in the first half of 2023, which led to increased electricity demand and a reduction in hydropower generation capacity.
The announcement from EDL highlighted the adverse effects of the drought. The prolonged period of extreme heat not only escalated electricity consumption but also hampered the ability of hydropower plants, responsible for 95% of the country’s power generation, to meet the surging demand. This predicament underscored the need for measures to ensure a stable supply of electricity, especially as Laos seeks to boost local power provision and expand its exports to Thailand in 2024, further complicating the situation.
An EDL spokesman stated in an interview with a local media outlet that another factor leading to the decision was the inability of some crypto mining projects to settle their outstanding balances. This fiscal problem is likely to have increased due to the strain on the power supply system.
The backdrop to this decision traces back to September 11, 2021, when the Laotian government greenlit a public-private pilot initiative aimed at fostering crypto mining and trading activities. This initiative was prompted by China’s crackdown on crypto mining, which led several industrial-scale miners to explore alternative locations for their operations. At that time, six companies received approval to conduct crypto mining activities in Laos as part of this program.
On August 22, the Sultanate of Oman, which is located on the Arabian Peninsula’s southern coast, launched a $370 million crypto-mining center. Exahertz, a local company, operates this facility within the Salalah Free Zone in collaboration with the Dubai-based blockchain firm Moonwalk Systems.
On the other side of the crypto mining spectrum, a Chinese official faced significant legal consequences for his involvement in a Bitcoin mining enterprise. On August 22, Xiao Yi, a Chinese politician, received a life sentence for corruption charges tied to the operation of a Bitcoin mining facility. Prosecutors contended that Yi engaged in misconduct by orchestrating cover-ups of mining operations through fabricated reports and adjustments to electricity consumption records.
