Adani has declined to say whether it can build Australia’s largest coalmine without a royalty “holiday” from the Queensland government, which now appears in doubt after it was thwarted by an internal Labor revolt.
But the Indian miner’s next investment move will come after the state makes “a decision [on royalties] that we can live with”, a spokesman for its Australian arm said.
Adani would also face another crossroads in the future if its bid for a $1bn taxpayer-funded concessional loan from the Northern Australia Infrastructure Facility foundered, the spokesman said.
The Queensland government’s senior figures – the premier, Annastacia Palaszczuk, the treasurer, Curtis Pitt, and the deputy premier, Jackie Trad – will broker a new arrangement to replace an ill-fated proposal that reportedly allowed Adani to defer up to $320m in royalty payments during the mine’s early years.
But it was scrapped after opposition from the left-faction majority in Labor’s cabinet, including Trad, who declared the deal would break a 2015 election promise of “no royalty holiday or subsidisation of taxpayer funds for Adani”.
The entire cabinet will now have to sign off on its replacement, a new overarching royalties scheme for all miners in three undeveloped regions, the Galilee and Surat basins and the north-west minerals province.
Whether or not any royalties pause will be offered to Adani and other miners hinges on whether enough left-faction ministers support any concession.
The issue highlights the political divide the Palaszczuk government is walking between disparate support bases – those in the regions who support the 1,400-plus jobs the project would create, and those in the state capital who oppose the mine on environmental grounds.
A government source said the deal would likely take its final shape in negotiations among the leadership before coming to cabinet.
Adani announced on Monday it would postpone what it calls its “final investment decision” on the Carmichael mine after the company was told by the premier’s office there was no cabinet ruling on its royalties offer.
That decision had been slated by the board of its Indian parent company by the end of next week. Adani had flagged then investing $100m to $400m from the parent company in preconstruction works.
But the deadline for the real final investment decision – the point of financial closure, when Adani clinches necessary investor backing for the $16bn project – was slated for the start of 2018.
The Adani spokesman said the board’s investment decision would come after a state government decision on royalties – “a decision that we can live with”.
Asked if Adani could proceed without any royalties pause, he said: “Let’s wait and see what the government comes back with.”
It was possible that Adani may also have to postpone its financial closure deadline, depending on how long the government takes to make its decision on a royalties offer, the spokesman said. “It can affect a number of the preconstruction stage works,” he said.
The status of Adani’s Naif bid did not affect its board investment decision because it was “part of the funding arrangements which flow after”, he said.
“So we get [a final investment decision] and we get all our banking components in place; if we get Naif, we’re right.
“If we don’t get Naif, we have to make another assessment.”
Adani considered its royalties deal to be the final outstanding matter before the Indian board could rule on investment, the spokesman said.
He said federal Labor had told the company it would support amendments on native title laws to safeguard its land access deal with traditional owners.
That deal continues to be contested in courts by some of the Wangan and Jagalingou traditional owners.