Tether has officially confirmed that it will cease its mining operations in Uruguay, laying off 30 of its 38 employees. The company cited unsustainable energy costs and uncompetitive electricity tariffs among other challenges in the country.
The decision was announced to the public after sources from the ministry confirmed it to El Observador, a Uruguayan newspaper, during a recent meeting held at the National Directorate of Labour (Dinatra). Tether had planned a $500 million investment in Uruguay, including the construction of three data processing centers and a 300-megawatt renewable energy park. However, only around $100 million of the planned investment was completed before the project became economically unviable.
Tether announces plans to exit Uruguay
Since Tether arrived in Uruguay, they have made clear their intentions to make a significant investment in the country. It included developing three Data Processing Centers in Florida and Tacuarembó that required approximately 165 MW of power supply. They also aimed at constructing a Wind and Photovoltaic Generation Park. The projects required a 300 MW power supply.
Aside from the $100 million Tether had spent, it had also set aside another $50 million specifically for infrastructure that UTE and the National Interconnected System would own. However, the company later claimed that it could no longer fund this initiative because it was not generating enough money under the current circumstances. Reports claimed that the terms of the contract and the 31.5 kV toll fees used in Florida increased operating costs.
However, Tether had requested a better pricing plan multiple times since November 2023. One of the proposed suggestions that the crypto firm presented to tackle this situation was shifting to 150 kV tolls and adjusting the power purchase agreement. Several analysts weighed in on this proposal. They expressed their belief that this change could have helped UTE save money and prevent the construction of unnecessary structures.
In addition, Tether has also cleared rumors of leaving Uruguay because of a $4.8 million debt problem with one of the state-owned electricity firms. In a statement to a media platform, Tether contested these reports, noting that it is still weighing the best way to progress in Uruguay and the broader region. The firm also argued that while some news platforms suggest that they are leaving the country, their claims did not truly reflect the reality of the situation.
The company also acknowledged the debt issue and noted that the local firm responsible for managing the crypto mining operations has been engaged in discussions with the government to resolve the existing problem. “Tether supports these efforts and aims for a positive solution that shows our long-term commitment to sustainable opportunities in the area,” It added.
