Setback for Adani as Aurizon withdraws loan request for rail line

Rail freight company Aurizon has withdrawn itsapplication for federal funding to build the Galilee Basin rail line, in a further blow to the prospects of the Adani coalmine.

The move also relieves pressure on the Queensland Labor government to veto a second Northern Australia Infrastructure Facility (Naif) funding proposal, after killing off Adani’s hopes of a $1bn federal loan during the November state election campaign.

In a statement released on Friday, the chief executive of Aurizon, Andrew Harding, said that while the company supported developing the Queensland mining site there were no clients to build the rail line for.

“We believe Aurizon can play a key role in helping facilitate a multi-user, open access rail solution for the various new mines in the region,” he said.

“However, while we are in ongoing discussions with several Galilee Basin mine proponents, we have not yet progressed to definitive contractual arrangements with any proponent.

“Our Naif application, is, in part, predicated on having customer contacts secured. Given this is unlikely to occur in the near future, we believe it is prudent to withdraw the Naif funding application.

“If market circumstances change and our discussions with potential customers progress to commercial arrangements, we will look at all possible funding arrangements to develop the rail solution.”

The Palaszczuk Labor government had been under pressure from activists to announce it would also veto any Aurizon Naif funding deal, amid an intensifying campaign to prevent Adani’s Carmichael coalmine from going ahead.

The rail line is seen as crucial to opening up the remote Galilee Basin to development – GVK Hancock and Clive Palmer have also shown interest in the region.

At the federal level, Labor has begun shifting its position on Adani’s Queensland mining interest, following Guardian Australia’s story that the mining group is suspected of altering a laboratory report in a current environmental pollution case with the Queensland department of environment.

The mine is yet to receive financing for its Queensland project, which remains delayed despite having received approval.

A Naif spokesman confirmed that Aurizon had formally withdrawn its application on Friday. “As such, Naif will no longer be considering that Aurizon request for financial assistance,” he said.