Rusal's closed Nadvoitsy Aluminum Plant in Russia to be converted into a bitcoin mining hub

A Russian aluminium plant, owned by Russian aluminium major Rusal, which was shut down as a result of U.S. sanctions would be converted into a bitcoin mining hub. The Nadvoitsy Aluminum Plant in Russia’s northern Karelia region closed its operations last summer after it lost access to American customers after the imposition of U.S. sanctions on Rusal and En+ Group in April 2018.

A part of the old production site is now being leased to the Russian Mining Company (RMC), which plans to utilize its cheap power sources and install bitcoin miners in the plant in order to expand across Russia, a local Russian business website RBC reported.

International economic sanctions have propelled many countries toward cryptocurrencies or bitcoins. Now, Rusal has paved the way for a bitcoin mining operation to take over its discarded aluminium facility. Bitcoin mining is the processing of transactions in the digital currency system.

“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,” said Dmitry Marinichev, Russia’s internet ombudsman and RMC founder.

“Our idea is to repurpose the plant and sell computing power,” he added.

The U.S. Office of Foreign Assets Control (OFAC) sanctioned Rusal in April 2018 because of its ownership by Oleg Deripaska. Deripaska has, since cut down his stake in Rusal and sanctions against Rusal were lifted, but production at Nadvoitsy aluminium smelter has not resumed.

Through a partnership with U.K.-based Cryptonex, Marinichev wants to grow RMC to cover 20% of the world’s bitcoin mining. Russia currently mines one-tenth of the world’s bitcoin production.