Australia rules out royalty exemption to Adani for Carmichael coal mine

Marco Green
May 29, 2017

If Adani agrees to the deal, they'll be instructed to pay royalties from the first year of production, Deputy Premier Jackie Trad said.

Following a Cabinet meeting, Queensland Premier Annastacia Palaszczuk said that an agreement was reached unanimously that Adani will pay full royalties for its Dollars 21.7 billion Carmichael coal mine in central Queensland. Taking note of the development, an Australian media report commented, "Prospects for the controversial Adani coal mine have dimmed further after the government said it wanted no role in any federal loan to support the project".

If the NAIF does provide funds for the 388 kilometre, $1 billion-plus rail link to support the proposed Carmichael mine, it will do so without the support of the state government. The Queensland premier was quoted as saying, "If Prime Minister Malcolm Turnbull wants to spend his money in this way, that's his decision".

"If Queensland is not a part of any agreement for NAIF funding, then, in our view, Adani's railway line can not receive NAIF concessional loans under the current legal framework".

Fairfax understands the cabinet agreed on a capped payment for the first six years of $5 million annually. "The Adani Carmichael mine will pay every cent of royalties in full", Palaszczuk said.

Adani reiterated that "it will pay every cent of royalties to the state as was always the case, and that it also remains committed to regional Queensland and generating 10,000 direct and indirect jobs".

Adani has applied to the Federal Government's Northern Australia Infrastructure Facility for a $1 billion loan to half fund the construction of the rail line linking the Galilee Basin to the Abbot Point port - but the NAIF can not grant a loan without the backing of the State Government.

Cabinet's approval of the new plan brought a week of warring among Labor factions, which was sparked when details of Ms Palaszczuk's original agreement with the company surfaced. In March, Gautam Adani, the chairman of the company, said it could start mining coal in 2020.

Adani said this week its board had deferred a final investment decision that had been expected by the end of May because the government had yet to sign off on a royalty regime.

Other reports by Click Lancashire

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