A $6.7 billion Chinese mega mine coal project adjacent to the Adani venture in Queensland's Galilee Basin is in doubt after the company abandoned its bid for a mining lease.

Key points: China Stone, a mega mine planned next to the Adani venture, terminates its mining lease applications with the Queensland Government

China Stone, a mega mine planned next to the Adani venture, terminates its mining lease applications with the Queensland Government The company would not explain why but says "next steps are under internal discussion"

The company would not explain why but says "next steps are under internal discussion" The Queensland Government says the company assured them it is committed to developing the mine at "a later date"

The proposed China Stone open-cut and underground thermal coal mine was planned to be built 300 kilometres west of Mackay, promising more than 3,000 jobs.

The company will not explain why it abandoned the process, but analysts believe the project is no longer aligned with China's interests in coal and is financially "unviable" given the difficulty companies face obtaining finance for coal developments.

The project was on track to gain five mining leases after it was granted conditional approval from the Queensland Government late last year.

It is the closest mine to Adani's Carmichael coal project, with the sites just 30 kilometres apart.

The China Stone project has flown comparatively under the radar compared to Adani, but at peak production it would produce up to 38 million tonnes per annum for export to China, compared to 10 million tonnes from the scaled-down Adani mine.

The project is owned by MacMines Austasia, a 100 per cent subsidiary of the Meijin Energy Group, which claims to be China's top metallurgical coke producer.

A Queensland Department of Natural Resources, Mines and Energy spokesperson confirmed to the ABC the company had terminated the process after the application was officially abandoned in March.

"MacMines has voluntarily not progressed their five mining lease applications for the China Stone project," they said in a statement.

The ABC has been told MacMines's Brisbane office, at the address on its website, has been vacant for months. ( ABC News: Josh Robertson )

"The schedule associated with progressing a mining lease application are subject to the proponent's commercial decisions."

MacMines chief executive Russell Phillips declined to be interviewed, but confirmed the project's future is under discussion.

"The next steps with China Stone are under internal discussion. The company is not in a position to make any public statement at this time," he said.

The MacMines office phone numbers are disconnected and the company's Brisbane office, at the address on its website, has been vacant for months.

According to ASIC documents, MacMines changed its business address from Brisbane to a shared Darwin office in 2016.

'They have done due diligence'

The 20,000-hectare China Stone coal project was promoting it would contribute $188 million annually in royalties to the Queensland Government during its first 25 years of operation.

It appears Queensland Treasurer Jackie Trad became aware of MacMines decision overnight.

"This is a development that has happened overnight, I haven't been provided with all of the intimate details of it," she said on Thursday morning.

Ms Trad said like the Adani mine, the project needed to stack up both environmentally and economically.

"Clearly MacMines, after they have done their own due diligence, have made a commercial decision," she said.

"My understanding is they haven't made that decision to stand forever, this is a decision they have made at this point in time."

Premier Annastacia Palaszczuk said delays to the Adani approval process and subsequent intervention to try and speed the process up had had no impact on China Stone project investors.

"I don't think it has had any impact, our exports are growing. Our exports are at record levels," she said.

But Institute of Energy Economics and Financial Analysis financial analyst Tim Buckley said the project could not progress further without the lease.

"Obviously, by relinquishing it [the process], they're saying they don't think it has value, or it certainly doesn't have value in excess of the cost of developing," he said.

Exploration work has previously been undertaken at the MacMines site, pictured here in 2015. ( Supplied )

Mr Phillips said it was "definitely not being shelved" but would not comment further.

Sean Ryan, a senior lawyer from the Queensland Environmental Defenders Office, said he was surprised MacMines had backed away given they had been granted state approval.

"It is safe to assume they can't move forward now," he said.

"Certainly, it is highly unusual. It does step them back in the assessment process, they would have to resubmit an application."

Queensland Mines Minister Anthony Lynham said he has been assured the project will be resumed in the future.

"Like all private sector projects, final investment decisions are up to companies and their shareholders," he said.

"MacMines has advised that they are committed to converting the exploration authorities that underlie the area to a mining lease, and developing the coal deposit, at a later date.

"Since 2015, the Queensland Government has approved $20 billion in resource projects, creating 7,000 jobs for Queenslanders."

Finding financial backing is difficult: analyst

The exploration camp for MacMines in the Galilee Basin. ( Supplied: MacMines )

Mr Buckley said the move suggested the project was not aligned with China's changing interests in coal.

"China has made it very, very clear it wants to progressively reduce exposure to highly polluting coal fired power generation. That won't happen overnight, it will take decades to come," he said.

"But if you are moving in that direction, the last thing you want to do is introduce a whole lot more expensive imported thermal coal.

"So strategically, it's not aligned with the Government of China."

My Buckley said it validated his analysis the Galilee Basin more generally was "financially unviable".

"The inability to get financial backing for a project in the Galilee is key here for MacMines," he said.

"The four largest SOE (state-owned) banks in China all agreed not to finance mines nor infrastructure relating to Adani, hence the company eventually declared they would self-finance, an acknowledgement they could not find external finance."

Chief executive of the Queensland Resources Council Ian Macfarlane said changes in development timelines are "not unusual" and pointed out there are six potential mining projects in the region.

"Given the size and location of the Galilee Basin, it's not expected that all projects will develop all at once," he said.

"Resources areas are developed over long time frames, which is one of the reasons why they are so important to regional Queensland."

Adani rail line changes could be a factor

Adani's decision to scale down its project and planned rail line may have been a contributing factor to the viability of the China Stone venture, according to an energy researcher.

Adani originally planned to build a new standard-gauge link between the Galilee Basin and Abbot Point with the assistance of a $900 million loan, via the Northern Australia Infrastructure Facility.

Project site in relation to the Galilee Basin and the Adani mine. ( Supplied: MacMines )

But last November, Adani released a scaled-down version of its proposed mine, including plans for a smaller, narrow gauge rail line to connect to the existing Aurizon network, rather than build an entirely new corridor to the Abbot Point terminal.

"They were always planning to use Adani infrastructure, they needed Adani to build big rail lines," principal researcher at Energy and Resource Insights Adam Walters said.

An Adani spokesperson said its rail network will still be accessible to other mines within the Galilee Basin.

"[It] will have an initial design capacity of 40 million tonnes per annum, ensuring there is plenty of capacity for other mines to transport their coal, in addition to the 10 million tonnes per annum that the Carmichael mine will produce."

Mr Buckley said MacMines was not planning to build all the significant infrastructure on its own.

"If you don't have roads, railway, water and power, and a workforce, you've got a big deposit in the middle of nowhere," he said.

Work being undertaken at the MacMines exploration camp. Date unknown. ( Supplied: MacMines )

What happens now?

MacMines continues to hold an Exploration Permit for Coal and a Mineral Development Licence, but mining and other activities associated with mining cannot take place until a lease is granted.

MacMines can apply for mining leases in the future, but will have to begin the lengthy process again.

But no other companies are able to apply for a mining permit over that land while the exploration permit continues to exist.

Some of the conditions imposed by the Queensland Government include MacMines having to avoid, or mitigate and manage, any impact on the black-throated finch habitat, groundwater and surface water resources.

Federal environmental approval is also required before construction.