China’s BIT Mining expands to Ethiopia with a $14M acquisition of a 51MW facility

BIT Mining, a Chinese Bitcoin mining company, completed a $14.28M deal with Ethiopia on December 3rd to acquire a 51-megawatt facility and 18K mining rigs. Ethiopia is now at par with Norway, contributing about 1.5% of the total Bitcoin hashrate.

Bit Mining announced its plans to expand into Ethiopia towards the end of last year in a two-phased transaction completed on January 7th. The consideration included a cash payment of $2.265M and the issuance of the company’s Class A ordinary shares amounting to $12.015M at $0.00005 per share. 

In the first phase, which closed a few days after the deal’s announcement, BIT Mining took over a 35MW fully operational and electrified crypto-mining data center. All the Bitcoin mining machines were transferred to the company’s new facility. The second phase was supposed to close after the construction of the other data centers was complete, but the company decided to purchase a facility instead of building from scratch. 

BIT Mining partly moves to Africa for cheaper operations costs

Our company's expansion into Ethiopia in Q4 2024 was covered in this recent @BitcoinMagazine article. 🤝

"BIT Mining Limited (NYSE: BTCM) completed the first phase of acquisition in Ethiopia for a deal that includes…"

Link to the full #Bitcoin #news article in our reply 👇

— BIT Mining Limited (@BITMining_BTCM) January 7, 2025

Dr. Youwei Yang, chief economist at BIT Mining, said Ethiopia’s ultra-low electricity costs provided his company with a unique opportunity since they were nearly 70% cheaper than in Ohio. Yang added that the firm was forced to run very advanced and expensive ASICs—like the newest or second newest generations—due to high power costs in the United States. He said that Bitcoin mining machines tended to become obsolete in the U.S. after two to two and a half years of activity due to the industry’s high competitiveness.

However, the BIT Mining chief economist pointed out that recycling some of its older generation mining rigs in the Ethiopian facilities was now possible, thus extending their shelf lives. Yang said that state-of-the-art mining rigs cost between $5,000 and $10,000 for retail buyers, and investors were naturally reluctant to send such expensive machines to a war-torn country. 

Therefore, the newer rigs were installed in the U.S. while the aging machines were sent to Ethiopia, creating a positive feedback loop. Investors could now extract greater returns from their machines than if BIT Mining restricted its operations in the United States. 

“We can get at least two extra years by moving the rigs to Ethiopia, and then maybe after that, they’re completely done.”

-You Wei Yang

The deal was big for BIT Mining because apart from mining DOGE (dogecoin) and LTC (litecoin), the firm was also in the hosting business, operating mining facilities for several clients. In turn, this attracted more capital, said Yang.

Ethiopia’s electricity standard remains attractive despite civil unrest

BIT Mining relocated part of its operations to Ethiopia because the country’s electric standard was similar to China’s. The firm could, therefore, leverage the expertise of its engineering team and redeploy some of its electric equipment previously used in China before Bitcoin mining was banned. 

Ethiopia has abundant hydroelectric power, partly due to Chinese investments totaling over $8.5 billion across 3,000 projects. China was key in funding the GERD (Grand Ethiopian Renaissance Dam), which will generate over 5,000MW once completed. Bitcoin miners like BIT Mining have taken advantage of the fact that not all of Ethiopia’s electric output has been put to good use. According to the Africa Report, nearly 18% of Ethiopia’s monthly electric power sales come from Bitcoin mining.

The Ethiopian government’s support of BTC mining also created a window of opportunity for BIT Mining. The Ethiopian federal government, however, has shaky control over the country, with civil unrest spreading in most of its Northern territories. Yang clarified that his firm had studied, researched, and even visited Ethiopia several times to ascertain its stability. 

Even so, Yang claimed it was challenging to convince some of its employees to move to Ethiopia from the U.S. and China since people enjoyed working in safer countries. Yang added that while nearly 33% of the employees in the Ethiopian facility were foreign, his firm was focused on ensuring that the team added more locals down the line.

From Zero to Web3 Pro: Your 90-Day Career Launch Plan