The Adani Carmichael coalmine will not receive federal funding from the Northern Australia Infrastructure Facility for a vital rail line, a Turnbull government minister has said.

The announcement by Karen Andrews on Sunday is a major blow to Adani, which has sought a $900m concessional loan for rail to link the Carmichael mine to port – and could spell the end of the project entirely if it can’t secure private finance.

The Labor leader, Bill Shorten, stepped up the opposition’s rhetoric on the Adani mine last week, first refusing to rule out stopping the project on Tuesday and then on Friday threatening the mine’s licence in a bid to boost the party’s environmental credentials for the Batman byelection.

Before its re-election last year, the Queensland Labor government promised to veto Adani’s application for a loan from the Naif.

Federal Labor, which has already ruled out providing a public subsidy or loan to the Adani mine, is now looking at further measures to block it.

Andrews, the assistant minister for vocational education and skills, said that since “all the approvals are already in place for the Adani mine” it was now “just a financing issue for Adani” whether the mine goes ahead.

“Let’s be clear, though, given the position that the Labor state government took to the last election and their election, there won’t be financing from the federal government,” Andrews told Sky News.



Asked to confirm there would not be federal financing, she said: “No – it won’t be proceeding. For there to be money available from the Naif, that would require the support from the Queensland Labor government”.

“So the advice I’ve been given from the resources minister is the financing won’t proceed.”

Nevertheless Andrews talked up the benefits of the mine, labelling it “very important for employment and jobs in northern Australia” and said she would like to see it proceed.

The shadow infrastructure minister, Anthony Albanese, told Sky News there were “ongoing concerns” about the mine and he had “never thought that it was automatically going to go ahead because it hasn’t been able to get its finance in order”.

He said the economics of the project did not stack up because the thermal coal market was in decline and India has said it wants to stop imports of thermal coal.

In contrast to Shorten’s statement that Labor is “increasingly sceptical” about the mine, Albanese said that Labor had been “sceptical from the beginning”.

“I, for a long time, have had this an issue … You won’t find statements from me saying the project is going to go ahead.”

Albanese said Adani had “simply been unable to finance the project” which is why it had appealed for taxpayer funding.

“The company has said the project would fall over if [the loan] didn’t occur. It’s not occurring – Queensland has said they won’t cooperate.”

Albanese said that suggestions from senior Nationals in the government about giving public money to build a coal plant were an “odd proposal” that “seems to have dropped off the agenda”.