LNP trumpets Adani mine investment but remains coy on royalty deal

The news

Premier David Crisafulli has touted an end to state “hostilities” with the Indian-owned operator of the Carmichael coal mine amid a new $50 million investment promise from Bravus at the central Queensland site.

But Crisafulli and Treasurer David Janetzki have declined to reveal details of the deal struck by the former Labor government allowing the company formerly known as Adani to defer royalty payments, which continues.

It also remains unclear exactly how the government was able to reach the truce after its investigations into potential unpaid royalties led to the company taking court action to bring the matter to an end.

Why it matters

The then Labor government struck a confidential royalties deal with Adani ahead of the 2020 state election. At the time, treasurer Cameron Dick declared: “Adani will pay every dollar in royalties that they have to pay to the people of Queensland and the taxpayers of Queensland – with interest.”

After claims in early 2023 that the India-based conglomerate used corporate structures to avoid tax, the Queensland Revenue Office, which is part of Treasury and reported to Dick, put the company’s Australian arm on notice.

In a letter that emerged as part of the company’s legal action, the revenue office said it was investigating underpayments between July 2021 and April 2023, which would need to be repaid with interest plus “a penalty of 75 per cent of the shortfall”.

A summary of the case on the Queensland Courts website shows that in January this year, Adani filed to discontinue its judicial review of the matter, launched last May.

What they said

Crisafulli, Janetzki and Mines Minister Dale Last announced Bravus’s new investment of $50 million into the site over the next two years on location on Tuesday after travelling to Emerald for a community cabinet event.

The investment was said to “support an expansion of the Carmichael mine’s workers’ village, a new water dam, the construction of a rail network maintenance hub, additional mine site infrastructure, and engineering works”.

An expansion of production at the mine of about one-third “over the next few years” involving $500 million in extra capital investment and 600 new jobs, subject to approvals, was also touted by the senior LNP figures.

“I want to be very clear, there will be no additional royalty deferrals because they were negotiated and locked in by the former Labor government, and Bravus will be required to repay every cent to Queensland taxpayers – with interest,” Janetzki said.

Pressed for detail by the few reporters invited to travel to the media event, Crisafulli refused to say when the deferral would end, citing commercial confidentiality restrictions in the deal.

“I’m telling you that the deal that was signed is being honoured, with one change, and that change is, in order to end hostilities, they’re going to increase the size of this mine by a third and employ another 600 people. Now I’d call that a reasonable outcome,” Crisafulli said.

He also reiterated that there was no change to the government’s royalty rates. Speaking alongside the ministers on Tuesday, Bravus chief operating officer Mick Crowe said the 30 per cent expansion in capacity would push production at the mine beyond 16 million tonnes each year.

“It’s a big investment in the infrastructure that underpins the future. It’s a huge vote of confidence in the sector that ... can reverberate across all of the industry,” he said.

When asked by this masthead about the status and findings of the revenue office investigations and the slated penalty for underpayment, a spokesperson from the office said it was unable to comment on individual royalty payer matters due to confidentiality and privacy terms in tax and royalty laws.

Another perspective

Shadow treasurer Shannon Fentiman accused Crisafulli of signing a “secret sweetheart deal to provide Adani with a royalty holiday, even after allegations the multinational coal company is not meeting its conditions”.

“Considering Adani has made a combined loss of $800 million over the past two years, how can David Crisafulli guarantee that the millions of dollars in royalties owed to Queenslanders will ever be paid?”

Greens Maiwar MP Michael Berkman said: “What are Queenslanders getting out of this deal, and if it’s so great, why can’t we see the details?”

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