New Delhi: The Adani group may walk away from its $16.5 billion Carmichael coal project if the confusion regarding royalties payments is not resolved by the Queensland state government, Bloomberg News reported, citing Australian Federal Resources Minister Matthew Canavan.
Adani’s approval for the project “is contingent on the Queensland government coming to a decision on their royalties policy,” Canavan told Bloomberg. “You can’t expect Adani to make a multi-billion dollar decision if they don’t know what tax they will pay. The ball is now in the Queensland government’s court,” Canavan added.
The Carmichael coal project, Australia’s largest, was first mooted in 2010 and still has not been closed due to concerns on its environmental impact, royalties payments and financing concerns.
Bloomberg reported that an earlier royalties deal proposed by Queensland in March would see Adani pay less in the early years of the project, but the same overall amount over the 60-year life of the project.
Adani will likely pay AUD $100 million to AUD $150 million a year in royalties producing 25 million tons a year of coal, with the final payment dependent on the prevailing coal price.
Adani was due to take a final decision later this year on the mine, but has reportedly deferred it on uncertaintly on the royalty payments issue.
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