Indian-based Adani has indefinitely deferred its final investment decision on whether to proceed with the Carmichael project, creating a political stir in Queensland.
The final decision on the $21.6 billion project – to be developed in Queensland’s Galilee Basin – was put on hold by Adani until the state government provided more “clarity” over the royalty payments, according to the ABC.
Federal resources minister Matt Canavan said the decision thrust the project into uncertainty and called it “embarrassing” that the Queensland Government did not have a tax regime in place for it.
“The premier [Annastacia Palaszczuk] says she wants to put in place a consistent royalty regime to attract investment in minerals and coal in Queensland. That’s great, but why isn’t it in place?,” he told ABC Radio National.
A final investment decision had been imminent, following comments from Adani Group chairman Gautam Adani that he was confident that the project would be approved.
No clear government policy has been given to Adani despite Palaszczuk travelling to India to visit several Indian businesses, including Adani in March this year.
When questioned over the Adani mine potentially receiving a “royalty holiday” – which could see Queensland losing around $300 million in royalties – Canavan said he could not confirm or deny the details.
“My understanding is that it will be a ramp up and the royalties will be the same paid over the life of the project. But be that as it may. I don’t have all the full detail,” he said.
“When the Adani mine, if it were to get going and produce 25 million tonnes of coal per annum, that’s its first stage, it would pay about $100 to $150 million a year in royalties to the Queensland Government, depending on the price of coal of course.
“So even if those figures you’ve quoted from the media are true, we’re talking about less than three years of royalties for a mine that will last for 60 years. So over those 57 years, if that’s the case, you’re looking at about $6 billion for the Queensland people.”
He added that if the mine was not developed it would result in a loss of $6 billion, as well as thousands of jobs in the state.
When questioned over whether the project is viable if contingent on a possible $300 million concession, Canavan said it was a matter for Adani to decide.
“Now, whether or not the project stacks up, of course it’s a venture that’s risky because it’s in a new area, it’s in a new coal basin, and I’m sure when Adani go and sit down and think about where they’re going to spend $21 billion over 60 years, they take a lot of factors into account,” he said.
“It would be obviously a decision that is finally balanced given the costs and benefits of doing so and the risks of putting $21 billion dollars of capital at play.”
The Adani mine has faced opposition from environmental groups, traditional owners, business groups and celebrities over its development, which have led to years of delays and litigation issues.