Muscat-based Green Data City has joined forces with Abu Dhabi’s Phoenix Group to develop a $300 million crypto-mining farm in Oman.
The 150-megawatt farm, which will be one of the largest crypto-mining data centres in the region, will be installed in Green Data City, the entities said in a joint statement.
The farm is expected to be fully operational by the second quarter of next year.
Crypto-mining farms are large-scale facilities designed to mine cryptocurrencies such as Bitcoin and Ethereum using a complex network of software and computers.
The mining process involves solving intricate mathematical calculations and algorithms to authenticate transactions and produce new digital currencies.
These calculations harness a lot of computer resources, which results in extremely high energy usage.
Founded in 2016, Phoenix Group manages 725MW across global mining facilities, with a presence spanning North America and the Emirates.
It is also the exclusive distributor of mining equipment MicroBT.
The entities said they chose the Gulf nation Oman to set up the mining farm due to the long-term security provided by the Green Data City mining licence and the comparatively cooler weather in the country, particularly in the region of Dhofar.
Cooler weather reduces mining farms' energy consumption.
Green Data City is operating on the first licence for sustainable crypto-mining in Oman, issued in March last year. Under this licence, industrial mining companies can register directly with the city and operate within the development.
The city’s first phase of development consists of 200MW of mining capacity, while the second phase will reach 400MW hyperscale data centre capacity and develop downstream activities including renewable energy, hydrogen, desalination, food industries and cosmetics.
The developers will build the new facility with modular units to reduce the impact on the land and they will install solar shades and employ specialised technicians from the local community.
Students and recent graduates will become acquainted with the mining operations through a partnership with Oman universities, with the long-term vision aimed at strengthening the country’s capabilities in cryptocurrencies and next-generation finance, the statement said.
Overall, the cryptocurrency industry has struggled with continued price declines since last year.
Bitcoin, the first and biggest cryptocurrency, fell below $16,000 in November – a year after it hit a peak of almost $68,000 – after a series of events rattled the industry.
These include the collapse of a number of digital asset companies, most notably the bankruptcy of the once-dominant FTX and a series of investigations by authorities.
The cryptocurrency has since recovered and was priced at about $26,020 at 6.40pm UAE time on Wednesday, according to data from CoinMarketCap.
Oman's economy is on a strong footing as it presses forward with its economic diversification initiatives, buttressed by favourable oil prices and fiscal reforms at a time when inflation remains contained, the International Monetary Fund said in June.
Fitch Ratings expects the sultanate’s economy to expand 1.1 per cent in 2023, slowing from 4.3 per cent in 2022 on lower oil production. It estimates non-oil sector growth of 2.3 per cent, driven by the recovery of the construction industry.