Queensland’s government will spend millions on a railway linking a huge coal mine to a port.
The government has approved a 300km rail line to be built by Indian mining giant Adani. The line will link the enormous Carmichael Galilee Basin mine to the Abbot Point terminal in August.
The massive mine will be the largest in Queensland, which is Australia’s biggest coal-producing state, exporting almost half the country’s total last year.
The government signed a deal to help fund the railway on Tuesday morning.
Deputy Premier Jeff Seeney is keeping financial details secret for now, but says the state will stump up a significant amount.
“I have to approach this task in a very professional commercial way, I’m not my hand before we get into those commercial negotiations,” he told reporters.
He said the one of the key provisions of the deal was that Adani would have to share the railway with other miners in the Galilee Basin.
The government also announced a new policy of taking on short-term, financial stakes in the rail, port or road infrastructure to try to create jobs.
The stakes will be funded by the government’s $37 billion asset leasing program.
Mr Seeney said they would take minority stakes in the infrastructure, meaning the government could foot up to 49.9 per cent of the bill.
Adani Australia CEO Jeyakumar Janakaraj said the deal would give confidence to investors.
The company signed a memorandum of understanding with the Bank of India to create $1 billion credit facility to develop the Carmichael project on Monday.
Australian Conservation Foundation energy analyst Tristan Knowles said the government was “subsidising an unviable project”.
He claimed the Indian firm had millions in liabilities and still needed at least $8 billion to develop the mine.
“In reality this deal is a bit of a subsidy for Adani,” Mr Knowles told AAP.
“They can’t afford to build this mine and railway.”
He also said the project would clear 10,000 hectares of land, including one of the few nature refuges in the area, and lead to a huge increase in carbon emissions.
But the Queensland Resources Council praised the government’s vote of confidence in the project, calling the deal a “combination of hard-headed commercial investment and a visionary approach to securing long-term benefits for the state”.