30.11.2017 Rusal Turns to Cryptocurrency Mining to Help Struggling Smelter 2017-11-30

By Yuliya Fedorinova (Bloomberg) — United Co. Rusal, the biggest aluminum producer outside China, is partnering with a cryptocurrency miner to help to bring new life to one of its struggling smelters in northern Russia.

Rusal is building a data center at its Nadvoitsy smelter, which it will charge firms to use for IT services such as data analysis and machine learning, according to a statement. Bulgaria-based AA!LAB, founded by Russian businessman Alexey Zenkov, is working to create industrial capacity for cryptocurrency mining and is the first partner in the project. The data center will bring new revenue to the smelter, which is running at half its capacity after Rusal shuttered unprofitable production a few years ago amid weaker aluminum prices and a global glut.

The site is attractive to IT firms as the cold climate means less energy is need to keep machinery cool, while companies also have access to cheap electricity from En+ Group Plc’s nearby hydropower station which supplies the smelter. Rusal’s billionaire owner Oleg Deripaska has been eyeing opportunity in cryptocurrencies for several years and En+, which he also controls, started a data center in Siberia earlier this year. Digital currencies have become a hot topic lately, with bitcoin this week surging above $11,000 for the first time. Read more: Ukrainian shipper Varamar plans to accept bitcoin payments Rusal plans to commission the venture with AA!LAB in the third quarter of next year.

The first phase of the data center will consist of 5,000 computing units, servers and workstations, and the equipment will require 6 megawatts of power. The producer has also allocated about 5 hectares (12 acres) of vacant area at the site for the future needs of the data center, Alexey Arnautov, Rusal’s director for new projects, said in the statement.