Update on the Energy Situation in Kazakhstan

We would like to update our clients and partners about the political, economic and energy crisis in Kazakhstan. As you may have heard, there have been serious ongoing power shortages in Kazakhstan over the past few months dating back to October 2021. The situation was escalated when protesters took to the streets at the beginning of January resulting in the resignation of the Kazakhstan government on January 5^th. On its way out, the government shutdown the internet amid protests, causing the BTC mining activity in the country to drop by almost 13.4 % within hours of the shutdown.

Like many of the other cryptocurrency mining companies currently mining in Kazakhstan, MineBest was immediately affected by the internet shutdown and for almost five days, January 5^th-9^th, we were unable to conduct any mining activity whatsoever. We informed all of our clients and partners and hoped that the situation would remain only temporary.

On Monday January 10^th, both the internet and power were partially restored, however both remained unreliable and only available in limited capacities. The Kazakhstani Ministry of Energy placed severe restrictions on the use of energy between the hours of 16:00 and 22:00 (peak usage) until January 17^th, 2022.

From January 10^th the power grid and overall electrical capacity showed signs of recovery however in recent days the situation worsened as several of the largest power plants in this country were shut down this week. The Kazakhstan Electricity Grid Operating Company (KEGOC) issued a press release on January 19th noting that:

On 19 January at 03:15, K-4 A facility at power unit No. 4 of Eurasian Energy Corporation (EEC) was shut down due to a failure. On 18 January at 23:48, power unit No. 2 at Ekibastuzskaya GRES-1 power plant was also shut down due to a failure. On 18 January 2022 at 15:07, power unit No. 2 at Ekibastuzskaya GRES-2 power plant was shut down due to a failure. The repair of power unit No. 1 at Ekibastuzskaya GRES-2 and power unit No. 5 at Ekibastuzskaya GRES-1 continues. 

The total net loss due to the shutdown of the three power plants appears to be currently about 800 MW of electricity. KEGOC is currently taking measures to, “mitigate the consequences of the declining generation and prevent a system-wide failure in the UPS of Kazakhstan.”

Due to the ongoing power outages and related restrictions on energy availability, MineBest has been unable to operate its facilities in Kazakhstan. We apologize for any inconvenience this might be causing our clients during this unfortunate time. We ask for your continued support, especially for the MB Kazakhstan team on the ground who have been working long hours under great duress over the past few weeks.

Thank you and we will keep you updated as the situation develops.

Sincerely,

The MineBest Team