Looking Into Western China’s Illegal Mining Camps

Despite regarding Bitcoin trading platforms as illegal, China’s attitude towards Bitcoin mining remains ambiguous. Presently, 70% of the world’s Bitcoins are minted in the country, while 70% of China’s “stock” is in Sichuan, particularly along the Dadu River where hydropower is abundant.

Since Bitcoin mining necessitates massive electricity, the mining camps in China are usually found in remote areas with low electricity charges, including Sichuan, Inner Mongolia, Xinjiang, and Yunnan.

Considering that almost half of the Bitcoin mining revenue is spent on electricity, miners are looking for solutions.

“The cost is very low for the direct power supply of the power station, for it does not need to be integrated into the state grid,” a senior miner stated. “Many mines are built directly in or near the power station, and they build their own substations.”

In China, a Bitcoin mine’s factory building cannot be approved, nor can construction reports and environmental assessments. Mines could be suspected of illegal building and power plants’ direct sales are in violation of electricity laws.

Found on the Dadu River embankment is the shortest factory building, just several meters away from the river surface. The newly constructed cement wall is away from the power station’s office building and connected with a transformer unit isolated from the power station’s wall.

Per the staff, the mining machines are from across the nation, mostly from Shenzhen, Sichuan, Hunan, and Jiangsu. The owners store their mining machines inside the camp. They settle the deposit fee, electricity bill, and wait for the coins.

“During the flood season, the mining machines return to Sichuan one after another,” Xiaowu noted. Similar to migratory birds, the mining machines move to Xinjiang and Inner Mongolia during winter and return to Yunnan and Sichuan in summer.

According to a mine owner, constructing the plant cannot include construction reporting or environmental assessment in advance due to the slow inking of the power supply agreement with the power plant.

Per the Municipal Bureau of Land and Resources, they are aware of the illegal building of Bitcoin mining sites along the Dadu River. A working group headed by the Credit and Economic Bureau was formed to conduct a thorough investigation.