A Russian aluminum plant is turning to bitcoin mining after U.S. sanctions constrained the plant to close down last year. Russian aluminum tycoon Rusal is renting its Nadvoitsy Aluminum Plant, situated in the northwest region of Karelia, to a crypto startup called the Russian Mining Corporation (RMC), as per Russian news site RBC.
The U.S. Office of Foreign Assets Control (OFAC) sanctioned Rusal in April last year. During that time, the U.S. Treasury Department named Rusal primary shareowner Oleg Deripaska a “Designated Russian Oligarch,” thus sanctioning the company.
RMC is leasing a little portion of the plant and intends to utilize the plant’s inexpensive energy and broad footprint to introduce miners to assume control over a huge segment of the worldwide bitcoin mining market. In collaboration with the U.K.- based exchange and wallet maker Cryptonex, founder Dmitry Marinichev stated that the firm intends to capture 20 percent of the present bitcoin mining market. RBC reveals Russia at present holds around 10 percent of the world’s bitcoin mining capacity.
“Now the Rusal plant is unprofitable, the electricity supplied to it is practically not being utilized, and people living in the single-industry town near the plant have nowhere to work,” Marinichev said. “Our idea is to redesign the plant and sell its computing power as a service, that is, provide an IT service,” he added.
Based on the agreement, Cryptonex moved 42 million of its exchanges local token CNX to the mining company, worth approximately $85 million at the time of writing, as indicated by CoinMarketCap. The companies will likewise support the acquisition of mining equipment for the new facility, Cryptonex said in a statement.