No Aussie state loan for Adani’s mine; shares take a hit
Gautam Adani has been seen as grappling for finances to fund the Australian coal mine project. The latest decision dents the chances of the $16.5 coal mine project from taking off
The newly sworn-in state government of Queensland has vetoed the $1 billion federal government loan to Gautam Adani’s Carmichael coal mine in the state, carrying out the election campaign promise that is said to have turned the last month’s vote in their favour. In the wake of Palaszczuk announcement, Adani Enteprises shares fell by 3.70 per cent to ₹149.90 over Monday’s evening closing price of ₹153.30.
Australian Labor Party’s (ALP) Premier Annastacia Palaszczuk on Tuesday wrote to Prime Minister Malcolm Turnbull, saying that “financial assistance should not be provided to Adani for the North Galilee Basin Rail Project.”
Palaszczuk had on Friday assured the voters in her victory speech that vetoing the billion dollar loan would be first official decision she would make after being re-sworn in as Queensland leader.
The crucial loan would have been used to build a rail link from the Carmichael coal mine to the Abbott Point Coal Terminal, which is a total distance of 388 km.
The Labor leader, like the federal government, had initially backed Adani’s loan application, that had been lodged with the Northern Australia Infrastructure Facility (NAIF).
A series of heckling incidents in the lead-up to the November 25 vote, however, is said to have prompted a course change on part of Palaszczuk, who on November 10 announced that her government would veto the loan if it got back in power.
The surfacing of the role of Palaszczuk’s partner Shaun Drabsch, a consultant at PricewaterhouseCoopers, in helping the Adani Group prepare a loan application had been given as the reason behind Palaszczuk’s U-turn.
Political analysts, on the other hand, say that reversing her support for the controversial mine project helped the re-elected Labor Premier convince the progressive minded voters in the cities to vote for the party, which eventually turned out to be difference between winning and losing in a tightly-contested election.
Australia’s Federal Resources Minister Matt Canavan from the ruling coalition government, which have backed Adani’s mine project all along, had conceded last month that Queensland Labor government’s veto would keep the mine from going ahead.
Last week, Canavan had blamed the Queensland premier’s anticipated move to veto the federal loan on “xenophobia” and “racism.” The allegations were rubbished by Labor’s national leader Bill Shorten.
The decision further dents the chances of the $16.5 billion coal mine project from taking off. Gautam Adani has of late been seeing as grappling for finances after major Australian banks refused to lend money for the coal mine in the wake of environmental concerns.
Adani met China’s Ambassador to India, Luo Zhaohui, on December 6, after it was reported that two major banks, Industrial and Commercial Bank of China (ICBC) and the China Construction Bank, had refused to fund the Australian project.
Two weeks ago, Adani Group stocks had dropped by as much as 4.2 per cent to ₹146.85. Shares of Adani Ports & SEZ had then fallen by 1.7 per cent.
- Gautam Adani
- Annastacia Palaszczuk
- Carmichael coal
- Australian Labor Party
- North Galilee Basin Rail Project
- Abbott Point Coal Terminal