Matt Canavan has praised the $73m Adani deal with the troubled Whyalla steelworks for the Carmichael coal rail line, suggesting the government could look favourably on the company’s $1bn loan application.
The monopoly deal involves Whyalla providing 56,000 tonnes of steel for the 400km railway line from the mine to the Abbot Point port.
Adani has applied to the Northern Australia Infrastructure Fund (Naif) for a $1bn loan for the railway and the board, established by Canavan, will assess the loan before making recommendations to the minister for final approval.
“It is government policy, as I said, to try and support Australian procurement and Australian industry and so I will obviously be looking to make sure we do maximise Australian involvement in projects that we fund through the Naif,” Canavan said.
Asked if the Whyalla deal would make the government look more favourably on the $1bn Adani loan, Canavan said the government was happy to see investors maximise Australian products.
“The Naif is an independent body but, in terms of the government’s position, we’re happy to see investors use and maximise the amount of Australian product in their projects,” Canavan told ABC radio.
The deal is reportedly not dependant on securing the government loan but Adani could not confirm that.
The deputy prime minister, Barnaby Joyce, who will unveil the Adani-Whyalla deal on Thursday, has previously said the government loan was a “tipping point” to get the mine going.
Under its rules, Naif will only fund projects that are “unlikely to proceed, or only at a much later date, or with limited scope, without Naif financial assistance”.
It is understood the steel deal is contingent on Adani receiving financing for the mine. Adani’s Australian chief executive, Jeyakumar Janakaraj said a decision on the project would be made in the next month.
Whyalla went into administration in April last year owing nearly $3bn. Canavan said the $73m deal to protect Australian jobs depended on the Carmichael mine going ahead.
“[Adani] won’t buy steel to produce modern art, they are building a coalmine so we need to project to go ahead,” Canavan said. “They are making that decision soon.”
Canavan said he was not involved in commercial negotiations but he encouraged the Indian-owned company to look for ways to maximise Australian involvement in their project.
He said the government was concentrating on keeping Australian jobs and investment rather than saying “there’s too many frogs or birds or trees”.
He called on Labor to support the Adani mine and jobs at Whyalla, given Adani’s plans to build Australia’s largest coalmine already had federal and state government approval.
Bill Shorten has said he supports the Adani coalmine but said the case had not been made for government to provide a $1bn loan.
“If Adani stacks up environmentally and commercially as I hope it does then we look forward to it going ahead,” Shorten said on Tuesday.
South Australian Greens senator Sarah Hanson-Young said it was a cruel trick to pass off a one-off steel order as a lifeline for Whyalla.
“To say a one-off order of 56,000 tonnes of railway line would save the Whyalla steelworks is nothing more than a cruel trick to a community doing it tough,” Hanson-Young said. “It’s the equivalent of 1% of Arrium’s output over the term of the contract.
“It’s about time we got a Southern Australia infrastructure fund, so we could progress our state with projects like a solar thermal plant, and expanding our public transport network – projects that will keep the lights on and the fires burning in Whyalla for a long time to come.”
