Tether to Cease Bitcoin Mining in Uruguay After Failed Power Talks

TLDR

• Tether has decided to shut down its Bitcoin mining operations in Uruguay due to high electricity costs.
• The company officially informed Uruguay’s Ministry of Labor about the closure during a recent meeting.
• Tether laid off 30 out of its 38 employees, retaining only a small team to manage the shutdown process.
• The company failed to secure revised energy rates after negotiations with Uruguay’s state-owned utility UTE.
• Tether had initially planned to invest up to 500 million dollars in Uruguay’s mining and renewable infrastructure.

Tether has confirmed it will close its Bitcoin mining operations in Uruguay. The decision follows failed talks with Uruguay’s state-run utility company over electricity prices. Tether laid off most of its local staff and informed the Ministry of Labor about the move.

Tether Ends Uruguay Operations After Energy Negotiations Fail

Tether officially notified Uruguay’s Ministry of Labor and Social Security about its decision. The meeting took place at the National Directorate of Labor headquarters in Montevideo. Tether confirmed the closure after laying off 30 out of 38 employees from its Uruguay unit.

The company blamed high electricity costs for the decision to halt operations. Tether struggled to secure competitive tariffs essential for running energy-intensive Bitcoin mining. It had tried to renegotiate contracts but failed to reach a favorable agreement with UTE.

Tether stated in a formal notice, “Predictable and competitive electricity tariffs are essential for a project of this scale.” The company said without better rates, continuing in Uruguay was not viable. It warned authorities earlier about the possibility of shutting down operations.

$150 Million Plans Undone by Electricity Tariffs

Tether launched its Uruguay project in 2023 with plans to invest up to $500 million. It had already spent over $100 million on infrastructure and allocated another $50 million. These investments included data centers and a 300 MW renewable energy park.

However, electricity prices between $60 and $180 per megawatt-hour hurt project sustainability. Tether’s attempt to switch to high-voltage tariffs was rejected by UTE. Talks to revise the energy contract also failed, halting the company’s expansion plans.

By mid-2024, Tether’s local partner defaulted on payments. UTE then cut electricity to two facilities over unpaid bills totaling around $5 million. Tether began scaling down its local operations quietly following the disconnection.

Tether Moves on to More Crypto-Friendly Regions

Tether shifted its global focus by relocating its headquarters to El Salvador earlier this year. The country’s pro-Bitcoin stance and crypto regulations attracted the company’s core operations. Tether confirmed this move while exiting Uruguay’s high-cost energy market.

It later signed a memorandum with Adecoagro for a mining initiative in Brazil. This project will focus on renewable-powered Bitcoin mining infrastructure. Tether continues to build in regions where energy costs are more favorable.

Tether also acquired Parfin, a Latin America-based digital asset custody firm. The deal aimed to strengthen its institutional base and blockchain services in the region. The acquisition reflects Tether’s wider strategy to grow in more cooperative jurisdictions.

Tether has not issued further comments about possible returns to Uruguay. For now, only a few staff remain to wind down remaining operations. The company has confirmed all remaining activities will cease by year-end.

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