A dedicated mining zone, Besqala Mining Valley, will be established across the entire territory of the Republic of Karakalpakstan, following a presidential decree signed on April 17.
The project aims to attract foreign investment, generate new jobs, and promote the efficient use of renewable energy. To oversee operations, a dedicated Directorate is being formed under the Cabinet of Ministers of Karakalpakstan. This body will grant companies "resident status," while the National Agency for Perspective Projects (NAPP) is required to issue the necessary permits without further bureaucratic hurdles.
Residents of the zone will enjoy a total exemption from all taxes and fees related to mining operations until January 1, 2035. In lieu of taxes, companies will pay a monthly fee equivalent to 1% of their revenue to the Directorate. All net profits generated by the Directorate will be funneled directly into the Karakalpakstan state budget.
Mining will be permitted for legal entities utilizing electricity from the national grid, as well as power generated by solar, wind, or hydrogen sources. Companies drawing from the national grid will be subject to a higher tariff, and illegal connections will carry heavy penalties. Any cryptocurrency earned must be sold or traded via national or foreign crypto-exchanges, with the resulting proceeds mandatory to be deposited into Uzbekistani bank accounts.
The decree strictly prohibits individuals with criminal records or suspicions related to economic crimes, money laundering, or corruption from holding management positions. Furthermore, anonymous mining and the use of anonymous crypto-assets are banned. Notably, the decree encourages a "circular economy" by allowing residents to build greenhouses on agricultural land, utilizing the heat generated by mining servers as a heating source.
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