Queensland state Premier Annastacia Palaszczuk on Saturday, May 27, said that Adani Enterprises will get no exemption or discounted rates on royalties it has to pay to develop its Carmichael coal mine project in Australia. Ministers from the centre-left state government made the decision on Friday, May 26, putting an end to speculation that the Indian company would be offered concessions on royalties during the early years of coal production.
Earlier in the week, the Indian company had deferred their investment awaiting the verdict on the royalty payment. The long-delayed project in Queensland, could now further be postponed due to the verdict. The Carmichael Mine, which would give a projected 25 million tonnes of coal a year, is an important source for jobs in the region. The royalty payments are key to promote jobs and investment in a state that has been hammered by the commodities slump over the past five years. The labour government has said, ”At the end of the day, it’s all about jobs, and that’s what Queenslanders want.”
The imposition of royalties saves face for the government. In the run up to the decision the labour party had faced both opposition from within its ranks, who were adamant that no taxpayer money would be used to subsidise the controversial Carmichael project in the untapped Galilee Basin. The other opposition comes from ecologists and environmentalists who have argued the coal exports would stoke global warming and that the project would require a port expansion that could damage the Great Barrier Reef.
“Under this new policy, the Adani Carmichael mine will pay every cent of royalties in full,” said Palaszczuk said on Saturday. “There will be no royalty holiday for the Adani Carmichael mine.”
Deputy Premier Jackie Trad said that Adani would be allowed to defer payment of royalties provided interest was paid and a security of payment was in place. The state government ruled out the use of public money to subsidise the controversial project or any directly associated infrastructure.
The port expansion is no longer needed as the company has shrunk the first phase of the mine to 25 million tonnes from 40 million tonnes a year, as it looks to make the mine and rail project more affordable at around $4 billion, instead of more than $10 billion.
With this development the ball is now in Adani’s court, and the future of the project hangs in the balance.
(Inputs from Reuters and UNI)