The Australia Institute has criticised the Queensland Government’s deal to subsidise the Adani coal project via a royalty deferral deal.
The long-running negotiations between Adani and the Queensland Government will allow the coal mine to ‘dig now, pay later’ at a secret, but certainly discounted, interest rate.
- The royalty deal has been reported in The Australian as a $5m cap on royalties for 5 years.
- This reported royalty deal rate has never been contested by the Queensland Government.
- Based on current mine plans, coal prices and exchange rates, this would see Adani defer royalty payments of $271 million.
- The interest rate and term for this loan are unknown, but will be certainly subsidised compared to commercial rates.
“Yet again we see Adani being given a free ride and a secret deal,” said Rod Campbell, Research Director at The Australia Institute.
“Queenslanders are essentially giving Adani a discounted loan of around $271 million based on leaked details of initial deal.
“Subsidising new coal is the last thing Queensland should be doing as global coal demand declines in the wake of the pandemic and in response to climate action.
“Subsidising Adani is not only bad policy, it is bad politics. Australia Institute polling has shown that 59% of Queenslanders oppose subsidies for Adani, while just 19% support.”
Methodology for royalty deferral calculation can be found here: https://www.tai.org.au/content/palaszczuk-breaks-promise-adani-subsidy-twice