Work is set to start on Adani's controversial $16 billion Carmichael coal mine in northern Queensland despite the Indian mining giant still needing to find $2.5 billion in funding.
The company’s chairman, billionaire businessman Gautam Adani, announced on Tuesday he had signed off on the Galilee Basin mega mine.
“I am proud to announce the project has Final Investment Decision (FID) approval which marks the official start of one of the largest single infrastructure – and job-creating – developments in Australia’s recent history,” Mr Adani said in a statement.
Pre-construction work on the project, which will be the biggest in the southern hemisphere when finished, is expected to begin in the September quarter.
Federal Resources Minister Matt Canavan and Queensland Premier Annastacia Palaszczuk lauded Adani’s investment decision as beneficial to the entire state.
“It is the first time we have opened up a coal basin in 50 years and if we can get it going, it will open more projects,” Mr Canavan said at the opening of Adani’s Townsville offices.
Opponents were quick to highlight the company’s significant debts and warned it still needs to secure billions of dollars in funding for the project.
Australia’s big four banks are yet to offer funding for the project, while the company has applied for a $900 million concessional loan from the Northern Australia Infrastructure Facility for a rail line to Abbot Point.
Federal Opposition Leader Bill Shorten welcomed the prospect of more jobs but criticised the coalition’s financial support for the mine.
“I welcome the jobs but like all viable jobs the business should stand on its own without the commonwealth taxpayer taking the risk,” he said in Brisbane.
Queensland Greens Senator Larissa Waters said her party would establish a Senate inquiry to investigate the NAIF’s funding decisions.
“What we’ve seen is a $5 billion slush fund that now looks set to give $1 billion to Adani to build a rail line because the company can’t find their own money to do it,” she said.
Senator Waters said the state and federal governments were trading what remained of the Great Barrier Reef in favour of “holes in the ground” that would threaten thousands of reef jobs and harm the health of coal workers.
Her concerns are shared by indigenous land owners and environmentalists who fear the mine will further jeopardise the reef.
“Adani is yet to lure any financial institutions willing to bankroll the project, which is proving hugely unpopular with the Australian public,” Australian Conservation Foundation president Geoff Cousins said.
“If the federal government hands Adani $1 billion of public money … we will consider all avenues, including legal action, to stop it.”
The investment decision follows a major internal spat within the state Labor government over a plan to allow Adani to avoid paying royalties during the early years of the mine’s operation.
The government ultimately resolved a framework covering greenfield projects in the Galilee and Surat Basins and North West Minerals Province, that will ensure interest is paid on any deferred royalties.
Adani, which submitted its environmental impact statement more than six years ago, says the project will create 10,000 direct and indirect jobs, a claim challenged by opponents.