23/05/2017 9:44 AM AEST | Updated 23/05/2017 9:44 AM AEST

Adani Carmichael Coal Mine Project Hangs In The Balance

It may not be protests, but taxes that kills it off.

AAP Image/POOL/Mick Tsikas
Prime Minister Malcolm Turnbull met India's Adani Group founder and chairman Gautam Adani in New Delhi.

CANBERRA -- After almost seven years, intense negotiations, government approvals, significant sweeteners and growing environmental protests, the controversial $21 billion Adani Carmichael coal mine project has come to a screeching halt over a State Government brawl over around $300 million in royalty payments.

Environmentalists describe the situation as Adani "blackmail," while Federal Resources Minister Matthew Canavan is tearing his hair out that one of the world's biggest coal mine projects has come down to a fight over tax relief.

"There is a serious question mark over it now that wasn't there a week ago," the Minister told the ABC's RN Breakfast.

"I think it is a remarkable and embarrassing situation for Queensland that they don't even have a tax regime in place. This project's been under consideration for nearly seven years now. The Palaszczuk Government's been in power for more than two years.

"And at the eleventh hour to not even be able to tell Adani what tax they will pay less than a week before it was going to take it to their board is just unbelievable."

The Indian mining giant Adani already has a clutch of serious sweeteners for the Galilee Basin project including a $1 billion concessional loan to fund a railway to a coal port, unlimited access to groundwater, and a promise from Prime Minister Malcolm Turnbull that any native title issues relating to the mine will be "fixed".

But it stunned mine watchers by cancelling and indefinitely postponing its final investment decision on the Central Queensland project which environmentalists say threatens the world heritage listed Great Barrier Reef, but proponents insist will create thousands of jobs and bring investment to Queensland.

(Note: Adani's own expert estimates the real job figure for this project is less than 1500.)

The Adani board was due to meet in India next week, but it is seeking clarity from the Queensland state government over lower or deferred royalties, seen as an incentive for mining companies and often referred to as a "royalty holiday".

If it went ahead, it would be money Queensland taxpayers won't be receiving.

The Greens' Adam Bandt is claiming Adani is trying to bully the Queensland Government, but such deals are major problem for Queensland Labor's left faction which is lead by Deputy Premier Jackie Trad.

The Queensland Cabinet on Monday deferred a decision on a royalties arrangement with Adani after Trad declared any "royalties holiday" for Adani would break Labor's election pledge of no taxpayer subsidies for the mine.

Premier Annastacia Palaszczuk -- who recently travelled to India to meet Adani's leadership -- heads the right faction and has previously said Adani would pay what it owes.

The Queensland Government is currently trying to sort this internal brawl out.

The royalty holiday, or concessions, could last as long as nine years.

"If they can't come up with a policy," Canavan told RN Breakfast, "Annastacia Palaszczuk needs to go to an election to give the Queensland people a chance to elect a government that actually do have a plan."

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