Matt Canavan has attempted to revive a plan to give a $320m royalty concession to the Adani Carmichael mine, arguing it would be akin to a “rent free” period when a tenant moved into a new commercial building.

The resources and northern Australia minister said there was a “serious question mark” over the Adani Carmichael coalmine because the Queensland government has deferred a plan to give it a royalty concession.

The Queensland government reportedly considered offering Adani a royalties pause worth up to $320m in which Adani would pay a discounted $2m a year rate on exported coal in the mine’s early years but a decision was put off after criticism from the deputy premier, Jackie Trad.

Adani, which was due to decide on whether to build the $22bn Carmichael mine at a board meeting next week, indefinitely postponed the decision.

Canavan likened a reduction in royalties – the price of extracting Australian resources – to lease incentives regularly received by commonwealth departments such as “rent-free periods when they go into a new building”.

“Commercial operators provide that all the time, to the private and public sector,” he told Radio National on Tuesday. “We’re going into a new coal basin here, it will be the first opened up in Australia for nearly 50 years. If you like, Adani are the first tenant to get into there.”

Canavan said the Queensland government’s backflip on royalties meant there was “a serious question mark over it now that wasn’t there a week ago”.

“It’s a remarkable and embarrassing situation for Queensland that they don’t even have a tax regime in place,” he said. “This project has been a consideration for nearly seven years now, the Palaszczuk government has been in power for more than two years.

“At the 11th hour, to not even be able to tell Adani what tax they’ll pay less than a week before they were going to take it to their board – it’s a shocking condemnation of chaos that exists within the Palaszczuk Queensland.”

Canavan said the $320m figure was derived from “leaks and innuendo”, rejected the characterisation of the concession as a “royalty holiday” and said he understood the plan was to ramp royalties up over the life of the project.

Asked if the project was viable without the concession, Canavan said it was “a matter for Adani” and that whether the concession could make the difference depended on its terms.

He said if the mine earned about $100m in royalties a year, the $300m tax break would amount to three years of royalties for a mine that would stay open for 60 years.

“If the mine’s not developed we’re not giving them anything, of course, because we won’t have any royalties.

“It’s the hypocrisy and inconsistency of those opposed to this mine: that somehow ... they want to say you’re giving a concession by not taxing somebody.”



Canavan said if the mine didn’t go ahead Queensland would miss out on $6bn of royalties, describing that as “giving a $6bn concession away”.

In addition to the royalty concession, Adani is seeking a $900m concessional loan from the Northern Australia Infrastructure Fund for a rail line from the Galilee Basin to the Abbot Point port.

On Monday, Infrastructure Australia officials told Senate estimates that it had not identified the rail line as a priority and it has not consulted the Naif.

Canavan has been one of the Adani mine’s staunchest supporters in the Turnbull government, attacking Westpac for changing its environmental policy in a way that precludes lending to Adani and supporting its application for a $1bn government loan.