The USDT issuer is shutting down its bitcoin mining operations in Uruguay after investing $100 million of the $500 million initially planned.
Tether has decided to halt its bitcoin mining operations in Uruguay, a project that was expected to reach $500 million in total investment. The decision is tied to excessively high electricity costs and the absence of a competitive tariff structure.
The shutdown has had immediate consequences for local staff. Tether Holdings has laid off 30 of its 38 employees in Uruguay, according to the local newspaper El Observador. The formal notice of termination was communicated during a meeting on November 25 at the National Directorate of Labor (Dinatra), in the presence of officials from the Ministry of Labor and Social Security (MTSS).
In May 2023, Tether launched its sustainable mining operations in Uruguay, partnering with a licensed local company. CEO Paolo Ardoino had expressed optimism about the South American country, highlighting that Uruguay “has a robust and reliable electrical grid capable of meeting the demands of modern industries.”
The original plan called for $500 million in investments, including the construction of three data centers in the provinces of Florida and Tacuarembó. Tether had also planned to develop a wind and solar farm with an installed capacity of 300 megawatts.
Despite the initial ambitions, Tether spent only $100 million and had allocated an additional $50 million for infrastructure that would ultimately become property of UTE (the national electricity provider) and the National Interconnected System.
Problems with the mining operations had already surfaced in September, after UTE cut off electricity supply at the end of July due to unpaid bills totaling nearly $5 million.
Tether’s local subsidiary, Microfin, had attempted to negotiate long-term electricity contracts, but the failure to settle outstanding debts led to the disconnection. “They didn’t have the money to pay UTE the $5 million in arrears,” commented one user on X.
In a letter sent to UTE in September, Tether stated: “We believe in the country’s potential, but for projects of this scale, a competitive and predictable tariff framework is essential. The failure to reach an agreement forces us to rethink our strategy”.
