Australia’s largest rail freight operator withdrew an application for a A$1bn state-backed loan on Friday to build a rail line to support development of the Galilee Basin, one of the world’s largest untapped coal reserves.
The decision by Aurizon represents a blow to Indian mining groups, Adani and GVK Hancock, which are seeking financial backing to push ahead with developing coal mines in the basin. The freight operator said it was withdrawing its loan application to the Northern Australia Infrastructure Facility, a state body, as it was unable to agree a contract with the miners.
“Our NAIF application is, in part, predicated on having customer contracts secured. Given this is unlikely to occur in the near future we believe it is prudent to withdraw the NAIF application,” said Andrew Harding, Aurizon managing director and chief executive.
“If market circumstances change and our discussions with potential customers progress to commercial arrangements we will look at all possible financing arrangements to develop the rail solution,” he said.
The move was welcomed by environmental groups which oppose the Indian companies’ plans to develop new thermal coal mines in the Galilee basin, which they claim would pump 700m tonnes of CO2 into the atmosphere every year for over half a century.
Adani says it is pushing ahead with its plan to build the A$16.5bn Carmichael coal mine in the Galilee basin. But its application for a A$1bn loan from NAIF to co-finance a railway line to the basin has been blocked by the Queensland government, which insists the project should not be supported by public funds.
Annastacia Palaszczuk, premier of Queensland state, accused Adani this week of missing deadlines for development of the long-delayed mine due to its failure to raise financing.
"It all hinges on getting the finance — so it is up to the company to get the finance,” said Ms Palaszczuk.
"That project needs to stack up financially, just as every other resource company investing in Queensland needs to stack up."
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