Bitcoin Mining in South Africa: The Electricity Bill Is Only the Start
Eskom’s proposed R1.20 electricity tariff sounds attractive, but one mining machine could take years to pay for itself.
Crypto
Eskom’s proposed R1.20 electricity tariff sounds attractive, but one mining machine could take years to pay for itself. A machine that costs about R87,500 and leaves less than R900 a month after electricity is not an easy investment to justify.
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Eskom’s proposed R1.20 electricity tariff sounds attractive, but one mining machine could take years to pay for itself. A machine that costs about R87,500 and leaves less than R900 a month after electricity is not an easy investment to justify. That is the problem facing anyone considering Bitcoin mining in South Africa, even if Eskom’s proposed cheaper electricity tariff becomes available.
The numbers come from a MyBroadband analysis of the Antminer S21 XP, a machine built to mine Bitcoin. The calculation assumes the machine runs for 16 hours a day and uses electricity at R1.20 per kilowatt-hour.
The numbers behind one machine
“At an estimated R29 a day left after electricity, a machine costing R87,504 has a long way to go before it pays for itself.”
The Antminer S21 XP uses around 3.67kW while running. Over 16 hours, that works out to approximately 58.67kWh. At R1.20 per unit, the electricity costs about R70.40 a day. MyBroadband estimated daily mining revenue of R99.52, using a Bitcoin price of around US$77,000 in mid-September. After paying for electricity, that leaves R29.12 a day, or roughly R874 over 30 days.
That is before repairs, cooling, internet access and other operating expenses. The machine’s reported price was R87,504. At the estimated monthly margin, it would take more than seven years to recover that purchase price, assuming the figures stayed the same. They probably will not. Bitcoin prices move, mining difficulty changes and machines lose their competitive edge.
A small change in the tariff changes everything
The proposed R1.20 rate is important because electricity can quickly wipe out a miner’s earnings. Using the same machine consumption and estimated daily revenue, here is what the calculation looks like at different electricity prices.
| Electricity price | Daily power bill | Left after electricity |
|---|---|---|
| R1.20/kWh | R70.40 | R29.12 |
| R2.00/kWh | R117.34 | -R17.82 |
| R3.00/kWh | R176.01 | -R76.49 |
At R2 per unit, the machine would already be spending more on electricity than the estimated value of the Bitcoin it produces. These are illustrative figures, not a forecast of actual earnings. They show how sensitive the business is to electricity prices.
Not every miner will qualify for R1.20 power
There is another detail that could affect the calculation: Eskom has not introduced a general R1.20 tariff for anyone wanting to mine Bitcoin. The rate is a benchmark in a proposed two-year pilot being considered by the National Energy Regulator of South Africa (NERSA). It applies to a specific high-voltage customer category in the southern region. The proposal also limits when participating customers can use electricity at the discounted rate. Smaller operators cannot assume they will qualify. The full cost will also depend on the final tariff structure and any additional charges.
That matters for a business owner deciding whether to buy equipment now. The investment could look very different if the cheaper rate is unavailable or the final electricity bill is higher than expected.
The machine could become outdated first
Recovering the purchase price is only one part of the calculation. The machine also needs to remain competitive long enough to earn that money back. Bitcoin mining rewards depend on the price of Bitcoin and the amount of computing power competing on the network. A drop in the price can reduce the value of a miner’s earnings, while rising mining difficulty can reduce how much Bitcoin an individual machine earns.
The industry also faces a scheduled Bitcoin reward halving in 2028, which will reduce the block subsidy miners receive. The effect on an individual operator will depend on Bitcoin’s price, transaction fees and mining costs at the time. Repairs and downtime add further uncertainty. A machine that stops working still represents money tied up in equipment, and every day offline is a day it cannot earn mining revenue.
Is it worth starting a mining business?
For anyone considering Bitcoin mining in South Africa, the first step should be to calculate the cost using the electricity tariff they can actually obtain, rather than building a business plan around a proposed rate. The budget needs to include the machine, electricity, cooling, maintenance and the possibility of lower mining revenue. It should also test what happens if the Bitcoin price falls or electricity costs more than expected. Eskom’s proposal could make use of electricity that might otherwise go unsold. But for miners, cheaper power is only one part of the equation.
At the estimated R29 a day left after electricity, a machine costing R87,504 has a long way to go before it pays for itself. That is the calculation prospective miners need to examine before spending their money.
