Malaysian power, more than a bargain for Sarawak
One reader asked how cheap was Sarawak’s power and another very knowledgeable reader replied. It’s VERY VERY cheap.
Cost of power in Sarawak for OM Holdings is 13.8sen/KWH = US$0.03c/KWh Amount of power used to produce one tonne of ferro silicon is 9,000KWh making a total cost of US$270 .
In China however the power costs are double at US$0.06c/KWh taking the cost of power to US$500/tonne, which is 50% for the cost of production. The raw materials are cheap its the considerable power that used which is expensive. This is where OM Holdings is the lowest cost producer in Asia.
The power sold to OM Holdings is very cheap by world standards, its interesting to see however the profit that Sarawak Energy is making on the 20 year contract with OMH, as they only pay half the amount that they charge.
“Sarawak Hidro, the developer and manager of the Bakun hydroelectric power project, sold power at 6.25 sen per kW, with a 1.25% annual increase, to Sarawak Energy, “
OMH Price at posting:
62.0¢ Sentiment: Buy Disclosure: Held
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