Adani coal project boast may scupper $1b loan

Adani coal project boast may scupper $1b loan

A potential $1 billion federal government loan to Indian conglomerate Adani for its proposed coal mine has been called into question because comments by the company appear to conflict with infrastructure funding guidelines.

Public finance for ‘s biggest open-cut coal pit has become the latest political battleground, as alarming new footage emerged of the environmental damage done to wetlands bordering Adani’s Abbot Point coal terminal in Queensland by cyclone Debbie.

Research by the independent Parliamentary Library, passed to Fairfax Media, found statements by Adani on the financial viability of the Carmichael project in Queensland’s Galilee Basin could render it ineligible to accept funding for a mine-to-port rail line from the $5 billion Northern Infrastructure Fund.

In December, Adani spokesman Ron Watson confidently declared that access to the $1 billion concessional loan through the infrastructure fund was “not make or break” for the $16 billion project moving to production. “It’s not critical,” Mr Watson said of the loan at the time.

Under the infrastructure fund’s investment eligibility criteria three, loans should only be extended if “financial assistance is necessary to enable the project to proceed, or to proceed much earlier than it would otherwise”.

According to the Parliamentary Library: “Mr Watson’s statement may well have ruled the project ineligible for funding under the NAIF. His statement points to the possibility that criteria three will not be met.”

As the political heat over Carmichael rose on Wednesday, Adani shifted position, telling Fairfax Media the loan facility was critical to making the rail line financially feasible because of requests by the Queensland and federal governments that competing coal projects in the Galilee share the line.

“That has increased our costs,” Mr Watson said, adding it would require “expansion of line capacity, maybe additional loops and so forth”.

“The cost of providing access to potential other users is significant. I think it requires the NAIF input to make it feasible.”

A spokeswoman for the Minister for Resources and Northern , Matt Canavan, would not comment on whether eligibility criteria could be tweaked to facilitate the loan, which Deputy Prime Minister Barnaby Joyce has already said should be approved.

But she did back the company’s stance that the multi-use nature of the 390-kilometre rail line was a significant factor in funding and feasibility.

“Adani has always said the rail line would be open access and the government has always said multi-use access would be a condition of any application being considered,” she said.

Mr Joyce sought to ratchet up pressure on Bill Shorten over the loan on Wednesday, claiming the Opposition Leader “no longer seems to believe in blue-collar workers”.

“Mr Shorten should start backing in labourers and the union movement who actually want these jobs and the National Party in this instance is standing with the CFMEU and the AWU to try to make sure we get these jobs moving,” he said.

Mr Shorten again gave his backing to the Carmichael project, but on the basis that it “stacks up” financially.

“I haven’t seen the case made for the taxpayer to underwrite a billion-dollar loan, underwritten by n taxpayers, to build a rail line,” he said.

Prime Minister Malcolm Turnbull, who met billionaire Adani Group founder Gautam Adani during his visit to India, has insisted the loan will be “assessed scrupulously independently”.

Pictures and video footage taken from a helicopter and a drone above the Abbot Point terminal, which will handle Carmichael’s output, has led to renewed warnings by conservationists about destruction of the onshore environment and Great Barrier Reef if the coal expansion goes ahead.

Images show black sludge throughout the wetlands, home to the endangered wading bird the n painted snipe, and what appear to be coal lumps on the adjacent beach, a turtle nesting ground.

n Conservation Foundation president Geoff Cousins said the area “looks trashed”.

“It’s a tragic and shocking picture of what the future of the reef coast looks like if we don’t stop digging up coal,” he said.

“The Adani companies have proven they can’t be trusted with the environment and the climate. The idea that we’d spend public money propping up their operations beggars belief.”

The Queensland Labor government has been treading a fine line on Carmichael between environmental issues and the need for mining jobs.

Behind the scenes, the pervading belief in Queensland has been that Adani would not get the finance necessary to break ground.

But that belief has started to shift, according to a Queensland government source, who said a “scaled back” project could go ahead.

“If it starts smaller, Adani don’t need as much funding to get going … if the government puts in $1 billion, it is even less and they can still expand it down the track if necessary.”

Follow us on Facebook