Parties split over Adani loan proposal

The Australian Conservation Foundation, the Australian Youth Climate Coalition and 350.org rally in Melbourne on Monday urging Prime Minister Malcolm Turnbull to reject a deal on the Adani coal mine. Wayne Taylor.

• by
 
• Phillip Coorey
 
• Mark Ludlow
• The federal Nationals and the Queensland government are urging the Commonwealth to give Indian multi-national Adani a concessional loan to help finance a $2 billion rail link for its proposed coal mine, but the push risks sparking rows within the Coalition and between federal and state Labor.
  Queensland Premier Annastacia Palaszczuk has written to the Turnbull government requesting it give Adani a loan of up to $1 billion from its $5 billion Northern Australia Infrastructure Fund (NAIF) to help build the rail link, which would join the giant $16.5 billion Carmichael coal mine in the Galilee Basin to the Abbot Point port, near the Great Barrier Reef.
  Federal Nationals Senator and Minister for Northern Australia, Matt Canavan, is also arguing internally for the loan amid calls from within his party for the government to help create jobs in the depressed region of Central Queensland.

  One member of the Nationals said there were six marginal seats in the area and if South Australia could receive a $50 billion submarine contract to save its handful of marginal seats, as well as a $49 million loan for ailing steelmaker Arrium, then the government should help out central Queensland.
  On Monday, Queensland Mines Minister Anthony Lynham announced the Carmichael coal and rail project had secured its final major state and federal government approval, with the state Coordinator-General approving an application for the 31-kilometre section of the project's rail line into Abbot Point, Queensland, as well as a temporary construction workers' camp.
  "This is another key milestone for the project, which Adani has confirmed it will start construction on next year," Dr Lynham said.

  Contentious area

  Funding for the rail link, however, remains a key area of contention.

  Before the federal election, then Resources Minister Josh Frydenberg who had responsibility for the NAIF, was reluctant to give Adani a taxpayer-funded loan. He said it "wouldn't be a priority project" for funding and that Adani was "a commercial operation and it needs to stand on its own two feet".
  His comments came after coal company Glencore complained about subsidising new entrants, saying it would "materially increase the risk to existing coal operations".

  Mr Canavan said the decision on whether to give Adani a loan was in the hands of the independent board, which assesses projects for eligibility.

  "They're conducting further due diligence on the project now. That will take them a few more months," he said.

  "I can't direct the board, it's up to them."
  But he said the mine would be good economically for his home state and the country more broadly.

  "Providing India with its energy needs from Australian coal is good for the environment, because it burns at a higher rate and produces less emissions per kilowatt-hour," he said.

  Big-ticket project

  Adani Group chairman Gautam Adani met Prime Minister Malcolm Turnbull in Melbourne on Monday and, on Tuesday, he will join Ms Palaszczuk in Townsville. The company is expected to announce the North Queensland city will become the company's headquarters if the project ever gets off the ground.
  The Palaszczuk government, which faces an election in about a year, is desperate for the project to proceed because it is the only big-ticket project on the horizon in the state following the completion of the construction of the $80 billion gas export industry in Gladstone.

  Federal Labor also opposes giving Adani a taxpayer loan.

  "The project ought to stand up on its own," a senior source said.

  "If it doesn't do that, very quickly the resources industry becomes the car industry.
  "The next thing, Andrew Forrest will come knocking on your door."
  The project already has all primary approvals, including mining lease and environmental approval. The rail section approved this week will form part of the 389-kilometre standard gauge, heavy-haul railway line from the mine in the Galilee Basin to the coal export Port of Abbot Point.
  But the Carmichael rail and mine project is still stuck in the courts with three appeals – two before the full bench of the Federal Court over the Environmental Protection and Biodiversity Act and native title, while there is also a judicial review of Adani's port expansion at Abbot Point in North Queensland, which has been brought by local residents in the Whitsundays – before the project can be given the green light.
  Greens leader Richard Di Natale said the coal mine would accelerate the onset of catastrophic climate change and there should be no loan.
  http://www.afr.com/news/politics/parties-split-over-adani-loan-proposal-20161204-gt3va4