Queensland Premier Annastacia Palas­zczuk urged to back $175m Olive Downs coalmine loan

A $175m federal loan given to the Olive Downs coalmine will be need to be approved by the Palaszczuk government.

Olive Downs mine is located near Moranbah, north-west of Rockhampton.

A $175m federal loan given to the Olive Downs coalmine in Queensland’s Bowen Basin will need to be approved by the Palaszczuk government, which vetoed a similar loan to build a rail line to the Adani coalmine in 2017.

Premier Annastacia Palas­zczuk is not expected to veto the loan for the Opal Downs mine, which her government approved on the eve of last year’s state election, but federal Resources Minister Keith Pitt said Queensland had a poor track record when it came to ratifying loans given through the Northern Australia Infrastructure Facility.

Adani was set to receive a similar loan for its Carmichael coalmine rail line in 2017 but it was controversially scrapped by Ms Palaszczuk during the middle of the election campaign after facing two weeks of anti-coal protests.

At the time, Ms Palaszczuk said she was acting in response to a conflict of interest because her then partner was involved with Adani’s loan application. For constitutional reasons, a loan from the federally-funded NAIF must be approved by a state ­government.

“The government has consistently supported the Olive Downs project in the Bowen Basin,” a spokesman for Ms Palaszczuk said on Thursday. “This NAIF loan will be considered by the government through the normal processes.”

Mr Pitt said the mine would provide hundreds of jobs and urged the government to quickly sign off on the loan. “Unfortunately, Queensland has a bad track record when it comes to making decisions on NAIF loans,” he said. “On average, it takes the Premier more than 260 days – which is the longest of any state or territory.

“If the Premier really is serious about supporting the mining sector and regional Queensland, and given she announced the project during last year’s state election campaign, I expect state Labor to provide approvals quick smart.”

Pembroke Resources’ $900m Olive Downs metallurgical coalmine – used for steelmaking – was given final government approval on September 29, a week before the start of the Queensland election campaign. It followed urging from lobbying firm Next Level, run by former Labor state secretary Cameron Milner, who advised Ms Palaszczuk on strategy for her re-election campaign.

The approval for the mine came despite it also facing a legal action in the form of a judicial review – a situation Ms Palaszczuk has said precluded her from approving the expansion of the New Acland thermal coalmine near Toowoomba.

Mr Pitt said the loan would support the mine’s first stage of ­development, which includes rail, and transmission lines, water pipelines, access roads and a coal handling preparation plant.

Pembroke Resources chairman Barry Tudor said the company welcomed the loan for the mine which would provide local employment and procurement opportunities.

“Olive Downs will contribute between 500 and 700 jobs during construction and more than one thousand jobs once at peak production,” Mr Tudor said. “The benefit to the Queensland economy and the central Queensland region is significant, with the project contributing more than $10bn over the life of mine.”

The Australian Conservation Foundation criticised the loan, saying it was “irresponsible” to use public money to support a coal project in 2021. “It seems investment in Olive Downs would not hold up for other investors, yet the minister and the NAIF decided it is an acceptable use of public money,” a spokeswoman said.