The Queensland government has quietly granted the Adani mining company a year-long extension to pay $18.5m for a water extraction licence, citing Carmichael coalmine “project timetable delays”.

The extension was branded “another special deal” by environmental groups, who said the government had consistently defended granting water access to Adani in the middle of a drought by stating the company would be made to abide by strict conditions.

Adani had been given a deadline of 1 July to pay the balance owing for the licence to extract 12.5bn litres of water from the Suttor river in central Queensland.

The Queensland mines minister, Anthony Lynham, confirmed an extension had been granted less than a month before the due date. Lynham told parliament in a written response to a question on notice from the Greens MP Michael Berkman that the payment was now due in 2019.



“Several legal challenges have contributed towards project timetable delays. It would not have been appropriate for the project to progress and take this water while these particular challenges were under way. As a result, the department decided it was appropriate to amend [the licence],” Lynham said in the statement.

“The water licence dealing ... is still conditioned to ensure that no water may be taken until the balance of the purchase price has been received by the Department of Natural Resources, Mines and Energy.”

Adani said in a statement it had requested the extension after legal challenges to the Carmichael project.

Carmel Flint, the national coordinator of the Lock the Gate Alliance, said Adani retained a caveat over the water and had been given “a free run to hold the water licence without paying the money for another year”.

“To us it looks like Adani trying to have its cake and eat it too,” Flint said.

“As far as we can see, the fact they hadn’t paid the government meant the government had powers to start a process to cancel it. It’s certainly insulting to graziers and landholders in the region that, in the middle of this drought, Adani can come in and get a massive licence and then not pay for it.

“The government’s main argument when challenged about this licence has been that it has all these conditions. But this is what happens when Adani fails to meet the timeline and pay.”

With large parts of Queensland in drought, water access has become an increasingly important front for groups campaigning to stop the Carmichael mine.

Last month Guardian Australia reported 70% of voters – including most supporters of conservative parties – supported cancelling Adani’s water licences to safeguard water for farmers.

Adani has made some apparent progress on its Carmichael project in recent months, announcing it was close to securing finance, and unveiling cheaper plans for a rail link and port expansion.

The Australian Financial Review reported last month that engineering firm AECOM was owed $16.9m by Adani and had submitted a claim for arbitration to the Queensland Building and Construction Commission.

Tim Buckley, the director of energy finance studies at the Institute for Energy Economics and Financial Analysis, said Adani’s Australian operation was structured so it was “actually insolvent”, with debts owed to the Indian parent.

Buckley said that structure created an “all-or-nothing scenario” that meant Adani was likely to defer making payments or committing large amounts of money, such as for the water licence, as long as possible while still trying to obtain finance and progress the Carmichael project.

“If they exit, they won’t be holding all of the financial burden,” Buckley said.