PETALING JAYA: Singapore Exchange-listed (SGX) SMI Vantage is establishing its Bitcoin mining business in Sarawak as it seeks to leverage on the state’s relatively low electricity rates.
In a SGX filing, it said its wholly-owned subsidiary SMI CS has signed an offer-to-rent agreement with state-owned Sovereign Systemtechnik (Sarawak) for its Bitcoin mining business, which is an extremely energy-intensive venture.
It said it would fit out the facility with Bitcoin mining machines housed in containerised shells. The new machines, along with the lower cost of electricity in Sarawak, would enable it to mine Bitcoin “cost-effectively”, SMI Vantage said.
The company will begin the process of installing the first of its two containerised mining rigs and is expected to commence mining Bitcoin in the third quarter of 2023.
A comparison of electricity tariffs for industrial use for Peninsular Malaysia, Sarawak and Singapore clearly shows why the Singaporean group prefers to set up its Bitcoin mining operations in the East Malaysian state.
A check with the Tenaga Nasional Bhd (TNB) website showed that the low voltage industrial tariff is 38 sen per kilowatt hour (kWh) for the first 200kWh per month. For the next 201kWh per month, the tariff increases to 44.10 sen.
In comparison, the electricity tariff in Sarawak under the industrial category is 24 sen per kWh for the first 100 units, 25 sen for the next 3,000 units, and 26 sen for consumption above 3,000 units.
In the case of Singapore’s state-owned SP Group, the tariff for low-tension supplies, non-domestic consumption is 27.43 Singapore cents (94.27 sen) per kwh, about 3.5 times more than the tariff in Sarawak.
As the state’s electricity tariff is lower than TNB’s, it also explains why SMI Vantage did not set up shop across the Causeway in Johor.
It has been estimated that Bitcoin mining consumes electricity at an annualised rate of 127 terawatt-hours (TWh), a usage that exceeds the entire annual electricity consumption of Norway. In fact, Bitcoin uses 707 kWh of electricity per transaction, which is 11 times that of Ethereum.
Headquartered in Singapore, SMI Vantage has diversified business interests including travel, fashion retail, food and beverage, logistics, and construction services.
Meanwhile, Sovereign Systemtechnik was formed through a joint venture between Sarawak state government-owned Permodalan ASSAR Sdn Bhd and Sovereign Sengalang Sdn Bhd.
Sovereign Systemtechnik’s primary goal is to participate in Sarawak’s oil and gas industry, and to financially benefit not only the state but also the over 70,000 unit trust stakeholders of Amanah Saham Sarawak (ASSAR). - FMT
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