Adani dealt another blow to Qld coal mine

Freight rail company Aurizon will withdraw an application for a federal government loan to build a rail line in Queensland's Galilee Basin Source: AAP

Rail operator Aurizon has backed away from plans to build a line linked to the controversial Adani mine coal project in Queensland's Galilee Basin.

Adani has suffered another major setback to its controversial central Queensland coal mine after rail operator Aurizon withdrew plans to build a freight line key to the $16.5 billion Carmichael project.

Aurizon on Friday pulled its application for a taxpayer funded loan from the $5 billion Northern Australia Infrastructure Facility after failing to strike contracts with proposed mines in the coal-rich Galilee Basin.

The plan to build a line that could be accessed by Adani, and other miners, to the Abbot Point port became a focal point for environmental activists after the Queensland government's veto of a NAIF loan to the Indian mining giant late last year.

Aurizon chief executive Andrew Harding said while there was not enough buy-in at this point, discussions would still continue with several Galilee Basin mine proponents.

"If market circumstances change and our discussions with potential customers progress to commercial arrangements, we will look at all possible financing arrangements to develop the rail solution," he said.

A Queensland government spokesperson said it was up to Adani to decide how to proceed in light of Aurizon's decision.

Adani says it is not impacted and remains focused on pushing ahead with early works.

While he agreed Aurizon was justified in backing away from its plans, Queensland Resources Council chief executive Ian Macfarlane called on Premier Annastacia Palaszczuk and her cabinet to stand up for Adani.

"Recent Queensland government statements regarding the development of the Galilee Basin and Adani have been confusing," he said.

"Premier Palaszczuk and her ministers need to be categoric and emphatic in their support of the Queensland resources sector and its potential for expansion, including the Adani mine."

In Gladstone, federal Opposition Leader Bill Shorten, who last week changed his previous non-committal stance to say he was "increasingly sceptical" of the project, again questioned Adani's ability to deliver on the employment and economic benefits it had promised.

"I don't think anyone now can guarantee a whole lot of the commercial arrangements," Mr Shorten said.

"What we need to do is just make sure we have a Plan B, a plan beyond Adani."

But he denied his criticisms of Adani amounted to an anti-mining stance.

Liberal National Party deputy leader and shadow treasurer Tim Mander accused the state government of actively working to block projects from going ahead.

"Instead of partnering with proponents and the NAIF, Labor has constantly put up roadblocks," he said.

"We're continuing to see the cost of those roadblocks, with billions of dollars of investment and thousands of jobs gone begging."

Conservationists who claimed victory after the Adani NAIF veto before turning their attention to Aurizon said they would continue their stop-Adani campaign.

"We haven't won until either the state government or the federal government clearly state that they're not going to allow coal mining in the Galilee Basin," Greens activist Ben Pennings said.

"We believe federal Labor is moving closer to that point, state Labor are less so, but there's a vast majority of Australians who don't want this."

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