Uzbekistan has granted tax holidays to miners at Besqala Mining Valley until 2035.
The Republic of Uzbekistan is taking a serious step towards institutionalizing mining. The country's authorities have exempted residents of the specialized mining zone Besqala Mining Valley, located in the Republic of Karakalpakstan, from paying all fees for carrying out activities until January 1, 2035.
This measure is not just a local benefit, but a well-thought-out strategy to attract capital. The exemption from fees directly increases the profitability of operations for zone participants, which is critical in the context of volatile equipment and electricity prices. In effect, the state is creating an "oasis" for industrial mining, stimulating an influx of foreign investment into a region that has traditionally not been the focus of global crypto investors.
Besqala Mining Valley is essentially becoming a unique jurisdiction within Uzbekistan. Residents operating on its territory gain a long-term planning horizon without a tax burden, allowing them to reinvest saved funds into scaling capacity and modernizing equipment. This is particularly relevant against the backdrop of tightening mining regulations in many other countries.
My analysis: Such long-term preferences are a powerful signal to the market. Uzbekistan is not just legalizing mining, but actively competing for hashrate, offering better conditions than, say, Kazakhstan or some regions of the USA. If infrastructure projects in Karakalpakstan are implemented properly, we could see a significant shift of capacity to this zone. However, investors should carefully study the stability of the local energy system and political risks — benefits do not eliminate the need for reliable electricity supply.