Australian govt will not finance rail link for Adani's $16 bn project

In a blow to the Adani group, the Australian government today said it would not finance a vital rail-link project that supports beleaguered Indian energy giant's 16.5 billion dollars Carmichael coal mine.

Adani has sought a 900 million dollar concessional loan for rail to link the Carmichael mine to port. The announcement by Minister Karen Andrews could spell the end of the project entirely if it can't secure private finance.

Andrews, the assistant minister for vocational education and skills, said that since "all the approvals are already in place for the Adani mine" it was now "just a financing issue for Adani" whether the mine goes ahead.

"Let's be clear, though, given the position that the Labor state government took to the last election and their election, there won't be financing from the federal government," Andrews was quoted as saying by Sky News Australia.

Asked to confirm there would not be federal financing, she said: "No it won't be proceeding. For there to be money available from the Naif (Northern Australia Infrastructure Facility), that would require the support from the Queensland Labor government".

She further clarified that the advice she has been given by the resource minister and given the position the Labor government took to last year's state election there won't be financing from the federal government for this rail line

Nevertheless Andrews talked up the benefits of the mine, labelling it "very important for employment and jobs in northern Australia" and said she would like to see it proceed.

There was no immediate reaction from the Adani group.

The Labor leader, Bill Shorten, stepped up the opposition's rhetoric on the Adani mine last week, first refusing to rule out stopping the project on Tuesday and then on Friday threatening the mine's licence in a bid to boost the party's environmental credentials for the Batman byelection.

Before its re-election last year, the Queensland Labor government promised to veto Adanis application for a loan from the Naif.

Federal Labor, which has already ruled out providing a public subsidy or loan to the Adani mine, is now looking at further measures to block it.

The Carmichael project, expected to create hundreds of jobs in Australia, has been facing opposition from environmentalists and indigenous groups.

The Adani Group has for over five years battled the opposition to any expansion of the Abbot Point port, saying it will cut into the Great Barrier Reef World Heritage Area.

The Adani group entered Australia in 2010 with the purchase of the greenfield Carmichael coal mine in the Galilee Basin in central Queensland, and the Abbot Point port near Bowen in the north.

Adani Australia currently employs over 800 people and has invested over 3.3 billion dollars in Queensland, which is the biggest investments by an Indian company in Australia, the company said on its website.