Sideways,"The governing factor will be the total relative cost...

Sideways,

"The governing factor will be the total relative cost of upgraded fuel versus the cost of available higher ranking coal"

The ECT / Neyveli presentation back in 2012 gave figures for processed Coldry product including royalty figure of Rs 1000 which is AU$18 ....two things I did notice of the article is that they based the comparative thermal coal figure at around $90 to $95 dollars per tonne...personally I'd be running of a slightly lower grade thermal out of Indonesia at GAR 4800 at around $84 per tonne as showing for that grade on coalspot for this months as a more accurate comparison IMO as that's where it would mostly likely be sourced from.

The other thing I noticed, that on the jcoal article from late 2012 a processing cost breakdown in China gave a figure of $20 processing cost per tonne which included royalty, however there was another cost which based on mining cost, the cost of mining per tonne of lignite of a similar grade to NLCs lignite was another $8 per tonne with 1.76 tonne required...so that would mean you would have to put another $14 per tonne IMO on that 'processing cost' which in turn would give a figure of $32 per tonne of Coldry produced and comparing to an Indonesian coal of $84 per tonne

IMO that would give the likes of Neyveli at least a $50+ per tonne saving on imported thermal....might also sort some logistical issues from port to boiler too.

That relative cost of comparing upgraded fuel to thermal seems very positive IMO ; price of coal is expected to track back up into around $100 per tonne over the next couple of years as demand hots up.

$50 at least per tonne over big tonnages adds up fwiw

http://www.ectltd.com.au/wp-content/uploads/120213-Presentation-IPS-New-Delhi.pdf

http://www.jcoal.or.jp/coaldb/shiryo/material/Prof.Mochida.pdf