Chinese Crypto Mining Companies Turn to Africa for Operations
Chinese crypto mining companies are increasingly looking to Africa, specifically Ethiopia, for their mining operations. While cryptocurrency trading is officially banned in both China and Ethiopia, Bitcoin mining was legalized in Ethiopia in 2022. As a result, Chinese companies that have been searching for new investment opportunities since China’s cryptocurrency ban in 2021 are now investing in Ethiopia.
According to a report by Bloomberg, out of the 21 companies that have made deals with Ethiopia’s power monopoly, 19 are Chinese. These miners are attracted to Ethiopia’s cheap electricity, with 92% of it coming from hydropower. Additionally, Ethiopia’s temperate climate is favorable for mining operations.
Some miners may disguise themselves as factories or agricultural projects to access electricity without official state approval. However, similar operations in Iran and Kazakhstan were shut down due to government reversals. The report warns that investing in Ethiopia carries a risk due to potential political upheaval.
Hydropower has also been utilized in other parts of Africa, such as the Democratic Republic of Congo, to benefit local communities and national parks.
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