Adani will have to provide financial assurance of more than $1.5 billion for the rehabilitation of the Carmichael mine proposed for central Queensland, a new report has suggested.

Environmental group Lock the Gate Alliance has analysed rehabilitation costs based on the Queensland Government's financial assurance calculator, which it argues is a conservative figure.

It concluded the initial financial assurance for the mine would be between $1.5 billion and $2 billion, based on estimates over five to 30 years of operation.

Rick Humphries from Lock the Gate Alliance said it was a significant finding.

"That would make it the largest financial assurance claim in the state," Mr Humphries said.

"It's essential the Government gets this right. It's a huge mine, it'll have a huge footprint.

"If the Government doesn't get the financial assurance right and doesn't enforce the new progressive rehabilitation requirements on Adani then the state could be left with a massive clean-up bill."

Adani's proposed $16.5 billion Carmichael mine project would be Australia's biggest coal mine if it goes ahead.

The proposed mine will be the largest in Australia if it goes ahead. ( ABC News )

The energy finance director at the Institute of Energy, Economics and Financial Analysis said at this stage, the company does not have financial institutions willing to bankroll the project.

"Adani's Carmichael proposal has a multitude of obstacles to get into financial close," Tim Buckley said.

Mr Buckley, a critic of the Adani coal mine, argued the project was not viable and the energy landscape in India was changing dramatically.

In terms of the financial assurance for rehabilitation, Mr Buckley said Adani does not have to put up hard capital but needs to find a financial institution to go guarantor on the project.

"I think Adani is going to struggle to find anyone willing to go guarantor on a multi-billion-dollar, multi-decade rehabilitation liability."

Report offers 'very realistic assessment'

Dr Gavin Mudd, an associate professor at RMIT University's School of Engineering, said rehabilitation costs were often underestimated.

"If you look at mining in Australia we've often underestimated I think the true, full cost of rehabilitation. But I think we have also underestimated the standards the community are expecting," Dr Mudd said.

"The scale at which we are operating, or we're proposing projects now, is unprecedented and that's really what presents the challenge.

"I think this report is a very realistic assessment and I think the industry and government need to get past the historic practice of generally treating things like bonds and the cost of rehabilitation as very commercially sensitive."

The Queensland Government is proposed reforms to mining rehabilitation to include progressive rehabilitation and financial assurance designed to protect taxpayers from the risks of abandoned mines.

Environment Minister Steven Miles previously said Adani would have to comply with the reforms.

"These reforms will apply to both existing and new operations so if a project like that one gets off the ground in the coming years these reforms will ensure that the state is protected, that we have sufficient financial assurance and that rehabilitation occurs progressively," Mr Miles said.

Adani has postponed a final investment decision over the Carmichael mine while the Queensland Government decides on the royalties arrangement.

The ABC revealed last week the Palaszczuk Government was considering a royalty holiday of up to $320 million.

Katter's Australian Party MP Rob Katter said the State Government should not be afraid to give Adani a royalties holiday if it guarantees major investment.

He said it was a small price to ensure the Carmichael mine goes ahead in the Galilee Basin.

"We know what it means to our future prosperity," Mr Katter said.

"I don't think Adani and Glencore and all these mining companies are the best in the world but we still them to invest somewhere and you've got to balance the ledger out somewhere."

He said the region was desperately needing the thousands of jobs on offer should the mine goes ahead.

"I would love to see us take the opportunity of having it."

Queensland's Cabinet is yet to decide whether it will give the Indian miner a royalty reprieve.

Adani said it would comply with all rehabilitation requirements now or in the future.