Adani leans on China for Carmichael mine loan
After Australia’s big four banks ruled out their support Adani has turned to China to help finance its controversial project.
Adani has turned to China to help finance its $16 billion Carmichael coal mine in central Queensland after Australia’s four big banks ruled out lending to the controversial project.
As anti-Adani protesters continue to attempt to hijack the state election campaign with demonstrations, it has emerged that the Indian giant has been in negotiations with China’s state-owned banks.
While the mega-mine has secured state and federal approvals and overcome years of legal challenges from conservationists, it is now facing new delays in securing finance as it also seeks a Commonwealth concessional loan of up to $1 billion.
Adani’s previous deadline for financial close was December but earlier this month the company said the timing was dependent on if it gets the loan from the Turnbull Government’s Northern Australia Infrastructure facility.
The NAIF has stated it intends to make a decision by the end of the year for the loan, which will pay a component in rail line that will open to be used by other proposed coal miners in the burgeoning Galilee Basin.
The Carmichael mine is the biggest proposed coalmine in Australia and, at its peak, is forecast to produce 60 million tonnes a year to fuel Adani’s coal-fired power stations in India.
Adani this year secured an incentives deal with the Palaszczuk Labor government in which it will pay a flat rate of $5 million in coal royalties a year for five years, with interest to be paid on any royalties deferred.
Sources have confirmed that the Indian conglomerate is currently in negotiations with Chinese banks over finance for the project.
A spokesman for Adani today declined to comment.
But it follows a senate estimate’s hearing last week that revealed the Turnbull government has written to China to “dispel the misinformation” from the “radical left” about Adani’s proposed mine as it seeks to ease concerns of potential investors in the project.
Attorney-General George Brandis told Senate estimates the government has told China the planned project has the full support of the Australian and Queensland governments, despite a loud campaign against the mine from green groups and left wing protesters.
“The government has made representations to dispel the misinformation campaign of those from the radical left who want to stop the project,” Senator Brandis said.
“The Australian government has written to the government of China to confirm the project has received all necessary Queensland state government and Australian government environmental and mining approvals.
“The government has expressed support for the opening up of the Galilee Basin and the Adani mines capacity to unlock that development the Australian government’s support for that project.”
Senator Brandis added that any investment in the project would be subject to approvals by the Foreign Investment Review Board.
Department of Foreign Affairs and Trade secretary Frances Adamson said the department had not requested funding for the project from foreign lenders.
“It has not been DFAT’s role to seek finance for that project but as the Senator says we have explained the status of the project,” she said.
Asked under questioning from Greens leader Richard Di Natale if the letter was
sent at Adani’s request, Senator Brandis replied he didn’t know.
Department secretary Frances Adamson suggested it probably was generated from a
request from the Indian mining giant but she’d have to confirm later.
She denied claims Australian diplomats had been masquerading as financial
brokers seeking foreign backing for the project.
“It’s not DFAT’s role to seek finance for the project,” she said.
Ms Adamson insisted the volume of documents to be reviewed did not imply a
significant amount of departmental activity.
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