- Argentina is becoming an attractive destination for Bitcoin mining due to lower electricity costs and favorable tax conditions in Zapala.
- A joint venture between Brazilian and Argentine companies is launching a sustainable mining project in Neuquén province in October.
Recent increases in electricity rates in Paraguay have prompted Bitcoin miners and data centers to seek more cost-effective alternatives, with Argentina emerging as a new hotspot for their operations. The shift is driven by Argentina’s comparative advantage in energy and tax incentives, particularly in the Zapala Special Economic Zone in Neuquén Province.
Beginning of operations in Neuquen
A joint venture between Brazilian and Argentine companies is launching a mining project that will begin operations in October. The initiative will use sustainable energy resources and is located in the Zapala Free Zone, an area that offers significant fiscal incentives for investors in high-energy-demand technologies, as we reported in Crypto News Flash earlier.
Zapala Mining and Patagonia 360 are leading the venture. Zapala Mining will manage the data center operations using ASIC technology, while Patagonia 360 will handle the engineering aspects of reusing gases from unconventional hydrocarbon production in Vaca Muerta.
Capacity expansion forecasts
The initial phase of the project will start with a capacity of 8 MW, with plans to expand to 100 MW by 2025 and eventually reach 200 MW in 2026. Luis Pomata, CEO of Nano Mining Paraguay and the project’s promoter, noted that capacity could be increased to 1,000 MW, which would surpass the capacity of the Itaipu hydroelectric plant’s turbine.
“It has the potential to generate up to 1,000 MW of energy, which exceeds the capacity of the Itaipu hydroelectric turbine,” Pomata added.
Environmental impact and fiscal benefits
The project’s distinctive feature is its environmental approach: it will use shale gas extracted from Vaca Muerta to generate electricity. This initiative not only ensures a reliable and continuous supply of energy, but also aims to minimize the environmental impact by using local resources.
“Being in a free zone, you don’t have to pay import duties on cars, which in Paraguay are 19%, which allows you to save millions of US dollars,” Pomata gave as an example.
The reaction in Paraguay to the migration of these investments has raised concerns, as there are fears that Bitcoin mining could decline significantly as a local economic activity. Meanwhile, in Argentina, the promise of regulatory stability and lower energy costs is attracting more investors to consider the region as a potential hub for cryptocurrency mining.
This project in Sapala is not only poised to become large scale bitcoin mining centered in Latin America, but also represents a strategic adaptation to global changes in the cryptocurrency energy and regulatory market.
