The Queensland government has offered Indian mining giant Adani a deal that would result in it paying just A$2 million a year in royalties on its proposed Carmichael coal mine project in Australia, according to a media report.
The so-called "royalties holiday" for the proposed A$21 billion Galilee Basin facility would expire after seven years and could cost taxpayers A$320 million in lost revenue, ABC News reported.
However, rejecting the claim, Adani Australia spokesperson said no such agreement with the state was signed so far.
The ABC report claimed that the agreement between the state and Adani Australia would see the company pay just A$2 million a year in royalties on the start of the project and will later increase after several years.
Queensland has a system for coal mines in which a smaller amount is paid at the start which increases as production at the mine increases.
ABC said that state Premier Annastacia Palaszczuk and Treasurer Curtis Pitt have been negotiating the deal with Adani.
It said that Palaszczuk, who neither confirmed nor denied the royalty agreement, said, "What we know about this project is that it is vital for regional jobs."
The report further claimed that Adani was seeking a total royalty holiday from the start of production that would have seen the company pay nothing.
Shadow treasurer Scott Emerson has slammed the plan, saying the government needs to explain why taxpayers' money is being used to benefit just one mining project.
"Labor said previously, heading into the election, they would never give taxpayer funds to one company," Emerson said on Thursday.
"I think this is an extraordinary situation to see this government doing a secret deal behind closed doors to favour one company."
Adani Australia, however, said it would pay all royalties and taxes and also generate 10,000 direct and indirect jobs in Queensland.
Meanwhile, a latest report released by an independent body Climate Council of Australia on Thursday warned against the project stating that the Carmichael mine posed serious risks to the environment, public health and North Queensland tourism.
The project, one of the world's largest, is set to start construction this year after being given the green light by the federal and Queensland state governments.
The project involves dredging 1.1 million cubic metres of spoil near the Great Barrier Reef Marine Park, which will then be disposed of on land.