Cryptocurrency miners in southern Kazakhstan are faced with a winter probably colder than what they’d expected. Xive, which operates crypto mining farms in Kazakhstan, has been forced to shut down its site in the southern part of the country due to power shortages.

Didar Bekbauov, a co-founder of Xive, told Forkast.News today that his company has had to close down its mining site in southern Kazakhstan due to the power limitations in the region. “Southern Kazakhstan is traditionally an electricity shortage region. KEGOC doesn’t supply electricity for miners there. That’s why no mining [is] possible,” he said.

KEGOC, which operates the national grid, said in October the power consumption demand in some parts of Kazakhstan has overrun the power generation volume “due to the sharp increase in consumption by the digital mining consumers (over 1,000 MW) and higher number of emergencies at power plants.”

The southern part of the nation has appeared to be the most affected region. “South is completely lost for miners. Other regions still survived,” Bekbauov said.

Bekbauov added that Xive is shipping most of the 2,500 mining rigs that were hosted at the site to the northern and western parts of the country, and some are being sent to Russia.

In a Wednesday tweet with footage, Bekbauov said he’s sad to shut down the mining farm. “Last container is ready to be sent. So much work, people, hopes are ruined. Country risk played out,” he tweeted.

Moving forward, Xive plans to explore opportunities in the U.S. “We are going to visit the U.S. in January to explore opportunities, talk to local miners [and] energy companies,” Bekbauov said. “Hopefully we can build something in 2022.”

Kazakhstan is increasingly important to crypto mining following China’s crackdown on the industry earlier this year, and is now the world’s second-biggest contributor to the Bitcoin network in hashrate just after the U.S. But the Central Asian nation is suffering from power shortages and is rationing electricity consumption, posing what could be an existential threat to the lucrative but energy-intensive business of mining for digital gold.

Yerbolsyn Sarsenov, co-founder and CEO of Enegix, a major crypto mining company in Kazakhstan, told Forkast.News in a written note last month that the southern part of the country “is more prone to power deficiencies than the north, where our facility is located.”

However, Enegix’s facilities still experienced power rationing during peak hours. Sarsenov said at the time that its facilities had been limited for power consumption for about two to three hours per day, but they were never entirely disconnected.

The country’s energy authority seems to have left the door open for legal miners. Its energy minister has said earlier this month that the authority will not restrict power consumption for legal crypto miners, according to a government statement.

The National Association of Blockchain and Data Center Industry, a local industry association in Kazakhstan, also said in a statement earlier this month that it is pleased to see authorities shutting down illegal miners and that it sees a bright future for the sector in the country. 

Chinese mining rig maker Canaan doesn’t appear to worry too much about its business in Kazakhstan, and looks to boost self-mining operations there, at least based on what the Nasdaq-listed rig maker has revealed to the press.

Just on Monday, Canaan announced it has started joint mining operations with local partners in Kazakhstan, with the delivery of over 2,000 Avalon Miner units to the country. It said in a company statement that more mining machines are expected to arrive in Kazakhstan throughout the week.

“After six months of practice and learning, Canaan is now fully compliant and aligned to the local legal, taxation, and business requirements, signing up to 1 million TH/s of computing power that is due for deployment by the end of January 2022,” Nangeng Zhang, chairman and CEO of Canaan, said in the Monday statement.

Canaan has bet big on Kazakhstan — a popular destination for Chinese crypto miners as they look for more regulation-friendly shores. It said in June it had launched its own crypto mining business in the nation.

China may be trying harder than ever to stomp out cryptocurrency mining, but rig makers appear to be spared from the clampdown. Canaan’s third-quarter report released last week showed it recorded a net income of 467.2 million yuan (US$72.5 million) in the period, compared to a net loss of 86.4 million yuan (US$13.5 million) in the same period last year and a net income of 167.3 million yuan (US$26.2 million) in the second quarter this year.