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Russian news outlet RBC reports that the Nadvoitsy Aluminum Plant of the second largest aluminium company in the world, Rusal, is set to reopen activity on its old site but this time as a Bitcoin(BTC)trade mining farm.
The metal plant was one of the largest in Russian before it was closed last year. Following the sanctions imposed by the United States Office of Foreign Assets Control (OFAC) on Rusal, the metal plant lost a large percentage of its customer pool (since U.S. buyers accounted for the greater chunk of its customer pool), forcing the plant to fold up.
The ban came as a result of Rusal’s association with a businessman called Oleg Deripaska. At the time, the U.S. Treasury named him a Designated Russian Oligarch, and as such the metal plant associated with him was cut off. Although the said Designated Russian Oligarch has already given up his stake in the company, the firm is yet to recover from the sanctions.
The company reported that the amount of electricity directed to the plant outweighs the number of products produced. Instead of wasting capital on the plant, the management of Rusal is ready to redirect the electricity to Bitcoin mining, which would presumably be more profitable. As such, a part of the metal plant was sold to Russian Mining Company (RMC) to help generate electricity for a more lucrative venture like Bitcoin mining.
RMC is not a kid in the block. It once ventured into initial coin offering (ICO), giving birth to the biggest ICO in 2017. The ICO reportedly brought home more than $40 million at a stretch. However, they closed activity at the mining site following the sharp fall of crypto prices in 2018. It seems like now the company is ready to give it yet another try.
Dmitry Marinichev, RMC founder, stated:
“Now the plant is unprofitable for Rusal, the electricity supplied to it is barely utilized, and people living in the single-industry town near the plant have nowhere to work.”
Explaining the goal of the new cryptocurrency venture, he added that “our idea is to repurpose the plant and sell computing power.”
Together with Cryptonex, a U.S based crypto venture, RMC plans on generating massive electricity to generate up to 20% of the entire world’s Bitcoin mining. Through the partnership, Marinichev hopes to make up to $100 million each month based on Bitcoin’s current price.
Generating up to 20% of the world’s Bitcoin mining is a huge pull for Russia. The country currently boasts one-tenth of the world’s Bitcoin mining, which is also a very high number. Going up to 20% would make Russia a very important and significant player in the global crypto world.