The increase in electricity rates in Paraguay for Bitcoin miners and data centers has opened a new business opportunity for Argentina. Industry players have already begun to implement and migrate investments to this second country, observing the comparative advantages offered in terms of energy and taxes. One of these bets is a joint venture, made up of Brazilian and Argentine companies. It is a mining project that will begin operating in October in the province of Neuquén, and will use sustainable resources for energy supply. The start-up will be carried out by the companies “Zapala Mining» and Patagonia 360The first will be in charge of operating the data center with ASIC, while the second will carry out the engineering for the reuse of gases emanating from the exploitation of non-conventional hydrocarbons. Dead cow. According to what those behind the initiative exclusively informed BitcoinDynamic, the facilities will be located within the “Free Trade Zone” from the town of Zapala. This Patagonian region is a special territory with fiscal and operational advantages for investors looking to set up high-tech and energy-intensive industries. “The idea is to be the largest bitcoin mining center and AI data center in Argentina,” he said Luis PomataCEO of Nano Mining Paraguay and one of the project's promoters. Engineer Pomata is an expert on mining activity in South America. According to him, the latest increases changed the energy equation when evaluating investments. Everyone has their own estimates. According to Pomata, the current rate in Argentina is «USD 45 per MW, while in Paraguay they have risen more than USD 60.» Specifically, the project in the free zone has three stages designed. The initial phase will begin with a capacity of 8 MW in October this year. The power is then planned to be increased to 100 MW in 2025and subsequently the goals are reached 200 MW by 2026. «There is capacity to reach up to 1000 MW of energy, which would be more than what a turbine at the Itaipú hydroelectric plant produces,» added Pomata. To compare the dimensions, the Bitfarms farm in the Argentine city of Río Cuarto requires a power of 54 MW. Meanwhile, the energy contract of this company for its plant in Tierra del Fuego is for 50 MW, and with the capacity to extend it to 210 MW. A salient feature of the proposal is the ecological solution for the energy supply. The electricity for the mining operations will be generated from shale gas (shale gas) that is extracted directly from the Vaca Muerta deposits, located approximately 160 kilometers from the special zone. This technology, which will be implemented with the services of Patagonia 360, not only guarantees a reliable and continuous supply of energy, but also takes advantage of local resources with the aim of reducing environmental impact.
The Zapala mine is projected to reach a capacity of 200 MW by 2026. Source: Zapala Mining.
In Paraguay, there is concern that mining investments will move and settle in Argentina. They fear that Bitcoin mining will become a secondary or irrelevant activity at a local level, given the comparative advantages that the neighboring country is beginning to present. This was confirmed by Fernando Arriolaleader of the Paraguayan Fintech Chamber, in dialogue with the media IproUp: «About six of our partners have already secured contracts in Argentinasince the price of energy is more convenient. The cost varies between 28 to 37 dollars. «I see a migration from Paraguay to Argentina and Brazil in the next six months«Without a doubt,» insisted the CEO of BC Mining.
Ecology and the importance of the free trade zone
As BitcoinDynamic reported, there are already other mining projects in Argentina similar to that of the Zapala Free Trade Zone, which aim to recycle energy waste generated by hydrocarbon exploitation. In the Rincón de Sauces area, the state-owned company YPFthe Norwegian oil company Equinor and the Bitcoin mining company Genesis Digital Assets Limited (GDA) partnered to monetize surplus gas to supply a mining farm housing 1,200 ASICs, dubbed “Bajo del Toro Thermal Power Station”. Other companies in the oil industry, such as Tecpetrolalso joined the use of gas waste to start mining Bitcoin. In September 2023, that company reported its plans to install another mining farm in the Patagonian Vaca Muerta. In the case of the recent announcement by the Zapala miners, the expansion aims to position the site as one of the main bitcoin mining facilities in Latin America. And it aims to take advantage of the exemption from the Value Added Tax (VAT) and other taxes that affect the import of mining equipment.
Bitcoin mine will recycle Vaca Muerta gas waste. Source: Zapala Mining. “Being within a free trade zone, import taxes on machines are not paid, which in Paraguay are 19% and represent millions of USD in savings,” Pomata exemplified. The truth is that this estimate still seems far away. The project is preparing for its second and third phase, while the developers are actively seeking “potential partners or companies interested in the hosting service,” it was reported. The expectation is that the project will employ a total of 30 employees who live in the Zapala area. At this stage of the implementation, investors and operators are moving forward with the acquisition phase of energy generation equipment and adaptation of the gas pipeline that will supply the ASICs. Beyond the projections, for Pomata the crucial thing when defining the projects in Argentina is that there is an expectation that the rules of the game would be maintained. «The most relevant thing today is that There is no risk of tariffs being arbitrarily changed as in Paraguay«, concluded the CEO of Nano Mining Paraguay.