An obscure government agency plans to indirectly support Adani’s controversial mega-coal mine by financing a business that will supply the project, it has emerged.
The Export Finance and Insurance Corporation, which provides loans to exporters, is also considering inquiries from other Adani suppliers, and held discussions with Adani representatives as recently as last month.
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| The Adani Carmichael project has encountered strong public opposition. Photo: AAP |
EFIC did not respond to Fairfax Media’s questions over what firms would receive or had applied for funding, the level of funding provided or the implications for the loans if the mine did not proceed.
The $16.5 billion project planned by the Indian mining giant would be Australia’s largest coal mine and would open coal reserves in Queensland’s Galilee Basin to further development.
But the proposal has struggled to secure private sector backing. Adani’s bid for a concessional loan of around $900 million under the Northern Australia Infrastructure Fund to build a rail line servicing the mine, was also vetoed by the Queensland government, leaving the company to “look at other funding options”.
Labor leader Bill Shorten is under pressure to reveal what his party's policy is on the Adani coal mine, with the government saying he's playing both sides.
At a Senate estimates hearing late on Thursday night, Export Finance and Insurance Corporation general counsel John Hopkins confirmed the agency was supporting businesses supplying the Indian mining giant.
“We have helped support some SMEs [small to medium enterprises] who’ve been involved in the supply chain to Adani, so not directly to Adani itself but small [enterprises] who may have provided services to that entity,” he said.
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| Adani's application for a public loan to fund a rail line from the mine to its Abbot Point coal terminal was thwarted by the Queensland Labor government. Photo: Glenn Hunt |
“They would come to us seeking funds, they would show us that they have a contract to supply certain goods and services, they need working capital or they need a loan to help them provide those services and given that the end result would [mean] an export for Australia we are able to fund them,” he said.
One company supplying the Carmichael project is expected to receive funding, and several other Adani suppliers have made inquiries.
The corporation was founded with taxpayer money but is now self-funded. The government can direct EFIC to lend money if it is in the “national interest” and must reimburse the corporation for any losses. The organisation's national interest loan facility recently received a $3.8 billion funding boost for defence exports and it is unclear what funds would be available for Adani should it make an application.
Also at the estimates hearing, EFIC chief executive Swati Dave confirmed it had “fielded some inquiries from Adani representatives” in mid-February, when “two or three people from each side had a chat”.
Ms Dave did not detail the conversation, but said it broadly covered “what our function is”. Adani had not applied for finance, she said. Adani confirmed on Monday it did not intend to apply.
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| Adani opponents say the mine will add to global warming and worsen coral bleaching on the Great Barrier Reef. Photo: Gary Cranitch |
Tom Swann, researcher at progressive think-tank the Australia Institute, said providing financial help to Adani suppliers was “another way for the federal government to support the [Carmichael] project.” He called on Mr Ciobo to rule out government support for the mine, saying the world was promising action on climate change and the "last thing we should be doing is subsidising the world’s biggest new export thermal coal mine".
Mr Ciobo said EFIC “has not been asked to finance the Adani Carmichael coal project” but Adani was entitled to seek funding.
The agency’s commercial account provides finance up to about $150 million, and lending decisions are at EFIC’s discretion. Under its national interest account, finance is uncapped.
Federal Labor says it will only support the Carmichael mine if it stacks up financially. In February, Opposition Leader Bill Shorten reportedly told a Townsville crowd: "If they want to use EFIC or any other form of government funding body to get the money - no, no, no".
Links
- Shorten Says Talk About Adani Mine 'Dumbing Down Climate Debate'
- Bill Shorten Says There's A 'Role For Coal' And Adani Mine Just 'Another Project'
- Could A Future Labor Government Really Stop The Adani Mine?
- Labor Pushes For Federal Investigation Into Adani
- Adani Coalmine Won't Get Federal Rail Funding, Liberal Minister Says
- Big Surge In Opposition To Adani, New Polling Reveals
- Shorten Hails Cheap Wind And Solar, But Will He Stop Adani?
- Adani Parts Ways With Mining Services Company Downer Over Proposed Carmichael Mine
- Qld Premier Annastacia Palaszczuk Seeks To Veto Adani Loan
- Another Blow For Adani As Chinese Backers Pull Out
- NSW Coal Mines In The Pipeline Are 'Bigger Than Adani', Lock The Gate Says
- Queensland Election: How Adani Helped Undo The LNP's Push To Regain Power
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