The Queensland government has announced it will not act as a “middle man” to funnel federal infrastructure funding to support the Adani Group’s proposed coalmine.

The premier, Annastacia Palaszczuk, has also confirmed the Indian mining group would have to pay “every dollar” of state royalties for the proposed mine, a significant departure from a previous deal to give the company a “royalties holiday”.

The state government on Saturday provided further detail on its financial support for the $16bn Carmichael coalmine in the Galilee basin.

Palaszczuk said her government would play no role in helping to facilitate a $1bn loan to Adani from the Northern Australian Infrastructure Facility – a federal government agency that hands out concessional loans for infrastructure development.

Adani is seeking the loan to build the rail link between its proposed mine site and the Abbot Point coal port.

The NAIF traditionally relies on state governments to administer such loans to the project proponents

The deputy premier, Jackie Trad, said the funding would now have to be provided and administered directly by the commonwealth.

“Our position is that the federal government should be funding Adani from the NAIF directly and not using Queensland as a middle man,” she said.

The new royalties scheme will allow the company to defer a proportion of its payments to the state government until the fifth year of the mine’s operation. But any deferred royalties would need to be paid back with interest, Palaszczuk said.

Palaszczuk and Trad would not give further details of the amount of royalties that could be deferred, or the rate of interest that Adani would be subject to, saying the details would be central to the government’s commercial negotiations with the company in coming days.

“But let me make it very clear, I am not going to budge from the decision that I have made, that we have made as a cabinet, because this is the best decision for Queenslanders,” Palaszczuk said.

“All royalties will be paid, and they will be paid with interest. That is our principle and that is the bottom line.”

Asked whether Adani was aware of the government’s new position, she responded: “They are now.”

The Queensland Conservation Council coordinator, Tim Seelig, welcomed the decisions by the state government.



“While we do not believe any new coal mines, including the Adani mine, should proceed given global warming trends and the imperative of carbon emissions reduction, we still welcome these announcements,” Seelig said.

“These are big, important decisions, consistent with previous election commitments.”

The announcement represents a significant departure from a previous deal reportedly struck with the company to cap its royalty payments, meaning Adani would only pay $2m annually over the first seven years of the mine’s operation, giving the miner a $320m loan.

That proposal had sparked internal tensions within the Labor party, led chiefly by Trad and the left faction, who argued the deal broke an election promise.

A cabinet meeting on Friday resolved to move away from any royalty holiday deal.

The Lock the Gate Alliance, an anti-mining group, has warned that the government, through its deferral of royalties, is still allowing Adani incentives using taxpayers’ money.

Its spokeswoman Carmel Flint told Guardian Australia on Saturday that the state government still appeared to be offering Adani a huge loan using taxpayers’ money.

The group has previously warned that the Adani and Glencore mines would be a “recipe for disaster” for food production and put 110,000 hectares of farmland at risk on the Western Downs.

“As far as we can see, there’s still a deferral, so they’ve changed their language, they’re calling it a deferral in royalties,” Flint said.

“It’s still a massive loan to Adani using taxpayers’ money,” she said.

Flint wanted to see the full detail of any deal with Adani on royalties, demanding that the government does not strike something in secret with the company.

The Australia Institute said, regardless of the announcement, the state government was still supporting new coalmines at a time of climate change and mass bleaching of the Great Barrier Reef.

“I think that’s the big picture, that a Labor government in a time of climate change is subsidising new coal,” Rod Campbell, the institute’s research director, told Guardian Australia.

“I’m just concerned that people will see this as some sort of win, or some sort of compromise, when in it’s not,” Campbell said.

Adani released a statement on Friday night saying it would “pay every cent of royalties”.

“Adani confirms again that it will pay every cent of royalties to the state as was always the case,” the company said.

It was quick to defer a decision on its final investment, set down for a board meeting on Monday, when the cabinet failed to follow through on the so-called “royalties holiday” deal this week.



Palaszczuk on Saturday denied there had been any backflip on the state government’s deal with Adani or that she had broken a promise to the company.



The Queensland Resources Council chief executive, Ian Macfarlane, told a Mackay audience earlier on Friday previous governments had burdened the industry through significant increases in royalties.



“It is vital that any changes to the state’s royalty system improve the competitiveness of the resources sector,” he said.

“Queensland’s royalty regime is uncompetitive by global standards so we look forward to seeing the government’s proposal.”

A ReachTel poll released on Friday showed significant opposition to the state government’s financial support for Adani.

A majority – 58.8 per cent – of the 1618 Queenslanders polled were either opposed or strongly opposed to such support.



The LNP leader, Tim Nicholls, criticised the government for delaying the mine’s go-ahead with its infighting, saying the last week had been marked by “crazy leaking” from all factions, and he doubted the hardline stance would stick next week.

“[It’s] a party that’s at war with itself, a government that can’t come up with a policy on Friday and stick to it by Monday,” he said.