Move out, shut down, "mineral capital" Sichuan is facing the strongest supervision

Why can't it be distributed to miners for 4 billion yuan a year?

Bitcoin “mineral capital” is in Sichuan, while 1/3 of Sichuan's available hydropower comes from Ganzi.

For miners, from the end of May this year, the fertile water-rich Ganzi state seems to be no longer "safe."

From May 27th, a working group was established in various departments of Kangding City, Ganzi Prefecture, to begin the investigation and rectification of the Bitcoin mine on the Dadu River.

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Under the supervision of high pressure, some miners who have just settled in Ganzi began to move out. The owner of the Ganzi mine, still in the exhibition industry, is also sitting on a needle felt.

The policy has become one of the most unstable factors in the domestic mining circle, especially after the National Development and Reform Commission issued the “mining restrictions” in April this year.

This partial supervision may only be a warning. It is conceivable that practitioners facing policy elimination will be constrained in the future.

Move out of "mineral capital"

"For safety, we (from Ganzi Prefecture) moved out." Miner Li Jianzhong told the Odaily Planet Daily.

Administrative division of Sichuan Province

According to the cover news report, since May 27, a multi-department working group in Kangding has set up a working group to map the bitcoin mines on the Dadu River and clean up the violations. The next day, the relevant person in charge of the Kangding City Economic and Trade Bureau said that Ganzi Prefecture does not allow bitcoin mining.

Although the government’s attitude toward digging bitcoin has not been positive, I heard that the relevant departments publicly stressed that Li Jianzhong could not help but sweat.

The relevant rectification notice was immediately issued, and the mine responsible for hosting Li Jianzhong also stopped the power in time to wait and see.

Since the beginning of 2018, Li Jianzhong, who entered the mining industry, is mainly engaged in the distribution of mining machines. The sideline is to help customers find reliable mines to manage mining machines.

In order to find low-cost stable electricity, Li Jianzhong repeatedly visited Sichuan. Just after the Lantern Festival this year (mid-February), Li Jianzhong came to Ganzi to find Fengshui.

Compared with other states, Li Jianzhong’s impression of Ganzi is “multiple hydropower stations on both sides of the road, and there are many mines.”

Seeing that the business is booming here, Li Jianzhong spent a week, and inspected several mines. Along the way, the Dashan River runs through the whole territory, and the Gansu, whose terrain is quite dangerous, does not let him eat bones.

"A lot of the snow on the mountain has not been finished. There are stones rolling down from time to time on the mountain. The luck is not good, the life is gone. The road is not good, and I accidentally rushed to the river tens of meters deep. Li Jianzhong sighed. "But still have to go, don't go to a little hope."

Ten days later, Li Jianzhong and a mine signed a letter of intent for the trusteeship.

Back to Shenzhen's Li Jianzhong, I thought that the logistics support for Fengshui mining was basically completed, but I did not expect that the mining machine had encountered strong supervision just long after it was on. The electricity he had worked hard to find can only be given up.

"After a while, the rain was late, and now I can't dig it." Despite the cruelty, Li Jianzhong still has to make long-term plans for mining customers. "After stopping for a few days, we moved away, and the Wanlaitai mining machine moved to the neighboring province mine."

"According to our view, it is better to move sooner or later." Li Jianzhong judged.

In fact, in the long run, Li Jianzhong does not think that the mines in the neighboring provinces are more secure. "National policy hardware clean-up mining, software clean-up borrowing bitcoin and other financial instruments to capital flight, so it will slowly tighten, then it is not cutting meat."

One year’s return is a bubble

It was not long before Li Jianzhong moved away from Ganzi, and the mine review officially began.

According to the cover news report, after 10 days of arranging, on June 7th, the Mayor of Kangding City led the team and met with the inspection team to work on the “three no” project along the Dadu River in the Dongdong area of ​​Kangding City (ie no Renovation of planned land use permit, no construction project construction permit, no land use certificate, and various mines with incomplete procedures, unapproved construction, and inadequate safety.

The cover news report also said:

“The relevant project parties (in other parts of the city) must also submit the relevant procedures and materials to the Kangding Municipal Government Office on June 10. Before the formalities are completed, the construction and production will be resolutely stopped.”

The miners can move and the mine can't move.

According to Lufeng, the owner of Ganzi Mine,

"If the procedures for land use are not complete, and the construction is indiscriminate, the surrounding environment will be governed. I have learned that there are several such mines that have been demolished after they are built."

Of course, Lu Feng, who has a registered company and useful procedures, has escaped this robbery. Even so, Lufeng, who is in the high-pressure center of supervision, is still sitting on a needle felt.

His mine was completed in March this year, and the water was not fully turned on. "It is necessary to return to normal operation one year later." There are still many variables in this process, no one knows.

This check in Ganzi Prefecture is not the first time, but it may be the most severe one.

In January of this year, when Lufeng was preparing for the Fengshui Mine, the Ganzi Prefecture had a paper “limited to digging documents”.

A Notice on the Cleanup and Reorganization of the Ganzi Prefecture Mines issued by the Ganzi State Government Office shows:

Although the policy on the legality of bitcoin mining companies is not clear, the fifth national financial work symposium in 2017 and the Internet finance work symposium held on November 20, 2017 all pointed out that the virtual currency “mining” industry Pseudo-financial innovations that are not related to the real economy are not supported, and measures must be taken to orderly withdraw. From the perspective of risk prevention and control, it is recommended that: … 2, using the timing of the current sharp drop in bitcoin prices, to guide the relevant mining enterprises to withdraw; 3, requiring the counties (cities) to no longer accept the start of new mining enterprises, control increase Quantity… The company must be shut down according to law without any approval procedures.

When the documents came out, some people were happy. Lu Feng, who had already gone through the relevant procedures at that time, has not felt a crisis. But as the old saying goes, "Sayon loses his horse and knows what is not good."

At that time, Zeng Peng, who was planning to build a mine in Ganzi, told the Odaily Planet Daily:

"This file will make a lot of people cry, like me. Just got a very cheap electricity, is preparing to build, this saves money…"

That document did save a lot of money for Kunpeng. According to many industry insiders, the construction of a 10,000-kilowatt mine requires at least 4 million RMB, and the higher specifications will be more expensive. At that time, he took a load of 80,000 kilowatts and saved more than 30 million potential losses.

When I saw Lufeng again in May, this once-savvy industry builder was no longer a godsend.

"It is estimated that the situation will not be good. Mining has been listed as a phase-out of the industry by the National Development and Reform Commission.

How to mine the mine for "non-compliance"?

It can be seen from the above that the Ganzi Prefecture government is not taking an immediate and comprehensive retreat attitude towards mining enterprises, but adopts an orderly withdrawal measure. The other side is to control the number of new mining enterprises and to ban illegal construction.

Unauthorized construction is the target of current rectification. But what is meant by "illegal construction"?

According to the cover story, "the bitcoin mining plant can't be established, and there is no environmental assessment and newspaper construction, suspected of illegal construction."

There are at least two reasons why the project cannot be established. First, there is no Internet access. "Using the talents of the State Grid to establish projects, the approval of the project will not pass the uncertainty, but the use of the national grid is the premise." Mines in the country's multi-site exhibition, Meng Yuming told the Odaily Planet Daily.

Without the use of national grid power, it is highly probable that the mine will purchase electricity directly from the power station in order to reduce costs. “The power station does not have the power to directly provide power to the user, otherwise it will constitute illegal electricity. How to do it? The electricity demand side can sign an agreement with the power generation company, but it still needs to pass the national grid, and the latter will charge 0.1 yuan/kWh. -0.15 yuan / kWh of network fees." China Miners Community Minerals Association COO Yu Yang once told the Odaily Planet Daily.

There may be another reason for not being established, but the rapidly building mines are reluctant to wait for a slower approval process. If strictly in accordance with the regulations, after the mine owner signs the power supply agreement with the power station and the national network, and then apply to the new department for new project environmental impact assessment, NDRC filing, construction planning approval, construction permit, etc., a series of procedures will take a lot of time. This means that mine owners may miss the prime time of floodwater mining and have to bear additional land costs. As a result, many mines were built privately, and then they tried to make up the formalities. "This is more common in the Dadu River Basin."

The price of coins and mining machines are ups and downs, and the production cycle needs to be flexible. The survival rules of this industry seem to make it difficult for mining to be produced at the same time as other industries.

Then, can the mines that "buy tickets after getting on the train first" can easily make up the formalities?

This is another tricky issue. According to an industry veteran, the resettlement requires the mine owner to complete the “over-network fee” and at the same time to achieve the arrival target on the EIA and fire-fighting indicators. “This is not a small amount of money, but the big mines will make up the small mines below 50,000 kW. It’s hard to say.”

These mines that lack qualifications are the targets of this state rectification.

If the government does not investigate the "unauthorized" mine, what hidden dangers may exist?

We can intuitively see these points: illegally digging bitcoin has the risk of breaking the law; the mine is at risk of flooding on a river bank a few meters high; private mines will also create tax-avoiding illegal acts.

Unable to land boots

Compliance has always been the sword of Damocles hanging over the top of the miners. In the mining circle, people call for supervision, and on the other hand, they are afraid of high-pressure supervision.

At this stage, as Chen Lei, the secretary-general of the blockchain club of Peking University and also the mine owner, said, “As long as you are not stealing electricity, mining itself is not illegal. It is only on the subject of compliance, different departments. There are different attitudes at the level. The policy high pressure is still relatively large."

According to Chen Lei, as of now, due to various regulatory pressures, there are about four or five mines that have been shut down by a single mine of more than 20,000. Together, hundreds of thousands of mining machines are affected. "We can't give a conclusion as to which kind of regulation is caused. Most of them are regional, sporadic, and there is no overall regulatory situation."

As for the future, Chen Lei also said that although the National Development and Reform Commission issued the "Industrial Structure Adjustment Guidance Catalogue (2019, Draft for Soliciting Opinions)" in April this year, the "virtual currency mining activities" were listed as national industrial policies that have been explicitly eliminated or Immediately eliminated industry. "But we estimate that the government will not immediately shut down the mine completely."

Iranian miners also agreed with this view. "Mining has always been a gray industry in China. If the document does not say that it is banned, it will take time and flexibility to deal with it. This draft of the consultation draft will take half a year after the official version, and it will be executed for half a year, waiting for six months."

"It is estimated that in the third quarter of next year, this matter will be transferred to the Ministry of Commerce and local authorities to implement it." Chen Lei added.

“In addition, I looked at the industries that need to be eliminated next year. Some of the industries that were eliminated by the National Development and Reform Commission’s “Industrial Structure Adjustment Guidance Catalogue (2001)” in 2001, for example, in tricycles, in chemical industry, in the drug-related raw materials industry. Now, in many places, we still have to do it. There is no way. The country is so big and develops step by step. After the implementation of the local government, the choice is still very big. It can be a knife killing, or it can increase the income."

Undoubtedly, with regulatory escort, the industry will be able to thrive, and vice versa, practitioners will be everywhere.

The manager of the mining machine hosting integrated service platform, Hashi Times CEO, has a deep understanding of this.

Statistics show that the cost of mining in the United States is 1.5 times that of the domestic. According to Yu Wei, the head of the global mines in the United States, which had experience in mining in the United States, in fact, because of the high construction standards, the cost of building mines in the United States can reach 3 to 5 times that of China. With such high infrastructure costs, why do some miners also choose to mine in the United States? Zheng pat asked the American counterparts.

“They told me that because many states in the United States are not opposed to mining, and they also have reasonable legislative restrictions on the development of the business, the cost is higher but the risk is low. The perfect policy license and social recognition are also benign in the industry. The elements necessary for development," Zheng said.

Bitcoin "mineral" worry

Excessive power generation during the wet season is the reason for the joint venture between the hydropower station and the mine. For every penny of electricity bills, the cost of saving a mine is "greatly scary."

Take the general ant S9 (14T) as an example. When the electricity price is 0.33 yuan / kWh (the current thermal power price), the miner needs to pay a electricity fee of 10.93 yuan per day for a mining machine; if the electricity price drops to 0.24 yuan / kWh (the current The price of the water and electricity), the electricity paid by the miners for the mining machine will be reduced by 27% every day, and the electricity bill saved will be the profit.

Bitcoin “mineral capital” is in Sichuan, while 1/3 of Sichuan's available hydropower comes from Ganzi.

Located in the southeastern edge of the Qinghai-Tibet Plateau, Ganzi Prefecture is surrounded by the Jinsha River, the Yalong River and the Dadu River. In addition, the mountain ranges stretch and the river valley is deep. The huge gap has brought abundant hydropower resources to this border area.

According to the data given by the Ganzi Prefecture Economic and Information Committee, in 2018, the capacity of the power station that can be developed in Ganzi Prefecture reached 41.3 million kilowatts, accounting for 34% of the province's developable capacity. In this context, the hydropower industry has also become the new industrial pillar of Ganzi. Statistics from the Sichuan Provincial Bureau of Statistics show that in 2017, the added value of the Gansu Power Industry accounted for 83.7% of the state-wide industrial added value.

There is the "excellent" of water resources, and the "worry" of water and electricity consumption. This is a true portrayal of Ganzi.

According to data disclosed by the Ganzi Prefecture Economic and Information Committee, last year, Ganzi Prefecture hydropower station abandoned 16.3 billion kWh of electricity (accounting for more than 30% of the province's water abandonment), and the direct economic loss of hydropower enterprises reached 4 billion yuan.

"To put it bluntly, if you don't sell it, you will lose it in vain." Lu Feng said.

It can also be said that the hydropower stations on the rivers and mountains in Ganzi Prefecture produce the cheapest electricity in China. Under the gravitational pull of low-cost electricity, countless miners came here to open the road and build mines.

"These mines help the power station to use the abandoned water and electricity, so that the power station can pay off the bank loans in advance, and stimulate local employment and income." Lufeng believes that this is the positive side of mining.

Now that the Ganzi policy has tightened, there are some discounts on the attractiveness of miners. In the mines of Aba, Ya'an, Leshan and other mines around Ganzi, you may encounter the same fate.

The “mineral capital”, which once produced 70% of the world's new bitcoin, is suffering from regulatory shocks.

A few years later, I don’t know if the blue iron house will become a distant view of the Sichuan mountains.

(Li Zhongzhong, Yan Peng, Lu Feng, Meng Yuming are all pseudonyms.)

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Produced | Odaily Planet Daily

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