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Carmichael mine project: Political cloud over Adani's hope for $684-mn loan

The left-leaning Labour party is on track to win the Queensland state polls, dashing Adani's hopes for a loan

Reuters  |  Sydney 

People protesting against Adani's Carmichael coal mine project, at Bondi Beach in Australia. 	Photo: Reuters
People protesting against Adani's Carmichael coal mine project, at Bondi Beach in Australia. Photo: Reuters

India's Enterprises Ltd faces a likely block on an A$900 million ($684 million) loan to help build a giant coal mine in Australia, with the left-leaning Labor Party on track for re-in a state poll.

Queensland state premier Annastacia Palaszczuk, who originally supported Adani's application for the federally funded loan to build a rail coal haulage line, said three weeks ago her would veto the concessional loan.

The Labor party, which faced a strong challenge to return to power, was leading after three-quarters of votes were counted following Saturday's poll, according to Broadcasting Corp.

The mine's location 400 km (250 miles) from a Pacific Ocean shipping terminal means the challenge of financing infrastructure costs has been at the forefront of the debate over the project's economic viability.

"The coal mine could be complicated by a position taken by Labor during the campaign to block any financing of related infrastructure," & New Zealand Bank said in a note on Monday.

The loan amounts to only a fraction of the overall A$16.5 billion cost of constructing the Carmichael mine but was seen as a first step in reaching financial close on a project that has been delayed for years by environmental opposition.

was not immediately available for comment.

Palaszczuk, who supports and its promise of 10,000 mine and construction jobs, amended her party's position in the run-up to the to oppose the taxpayer-funded loan under the A$5 billion Northern Infrastructure Facility

Although the funds would come from the federal government, Queensland state retains the power of veto over applications made for projects inside the state.

is also seeking A$2 billion in outside financing to construct the first stage of the mine and was in talks with China Machinery Engineering Corp (CMEC)

A number of lenders, including Deutsche Bank and Commonwealth Bank of Australia, have publicly said they will not provide funding, given opposition to investment in fossil fuels.

"If the loan is blocked, it is a signal to potential investors that Adani's mega-mine is very, very risky, both politically and economically," said Maggie Mckeown, a campaigner for the Mackay Conservation Group, which is opposed to the mine.

($1 = 1.3163 Australian dollars)

 

First Published: Mon, November 27 2017. 10:20 IST
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