Adani has consistently sold coal from its Queensland mine far below market rates, according to claims made in new analysis, potentially reducing the royalties owed to the state government by hundreds of millions of dollars.The research director at the Australia Institute, Rod Campbell, calculated that Adani sold thermal coal from its Carmichael mine at an average of just over $A100 a tonne during the 2023 to 2025 financial years – its first three full years of operation.Sign up: AU Breaking News emailThe period saw huge coal price spikes after Russia’s invasion of Ukraine, with Australian benchmark prices surging above $A600/t in late 2022, before moderating.Even allowing for discounted prices for Adani’s lower-quality coal, Campbell said the difference between the “realised price and expected market price is huge”.“This discrepancy means that royalty payments were far lower than might have been expected.

”Adani has strongly rejected the findings,A spokesperson said the analysis assumptions “are wrong and rely on mismatched data, incorrect assumptions and back-of-a-napkin math”,“This is just the latest instalment in the anti-fossil fuel movement’s misinformation campaign to try to shut Australia’s coal export industry down,” the spokesperson said,The Australia Institute analysis argued that Adani would have potentially owed $625m in royalties over the 2023-25 financial years if its customer prices were closer to expected market prices, given higher royalty rates would have applied under the progressive system,Instead, it paid just under $230m in royalties during that time frame, according to its accounts, representing a near $400m differential.

According to the Australia Institute, the biggest discrepancy occurs in 2022-2023 when Adani customers would have been expected to pay about $A282/t.This includes a 30% discount to take into account Carmichael’s lower-quality coal.Instead, Adani’s customers paid an average of $A102 a tonne, according to Campbell’s analysis.The calculations are based on Adani’s own customer revenue figures as well as coalmine production figures published by the Queensland government to ascertain a price per tonne.The figures are an approximation given there is a three-month misalignment between the Indian and Australian financial years.

Adani does not publish its price per tonne figures.The coal, which is burned to produce electricity, is primarily exported to buyers in India and south-east Asia.Adani’s Australian operation, Bravus Mining and Resources, lists its customers as a mix of related parties and third parties – including Adani entities and other energy producers.In addition to mining, the sprawling Adani Group’s businesses include sea and airport management, electricity generation and transmission, natural gas, food, weapons and infrastructure.The Adani spokesperson said that the mine had paid all coal royalties owed.

“We’re proud to operate in regional Queensland and provide secure jobs and opportunities for local businesses that drive economic and social prosperity in the communities our people call home,” the spokesperson said.Sign up to Breaking News AustraliaGet the most important news as it breaksafter newsletter promotionPrices paid by coal buyers have a huge impact on royalties, which are payments made by miners to state governments calculated as a percentage of the value of the sold commodity.Queensland uses a tiered royalty system, with rates increasing as commodity prices rise.According to the analysis, Adani’s average annual coal prices did not move much above the $A100/t base rate during those three years, which largely attracts the base royalty rates.Queensland’s base 7% royalty rate is applied to coal sold up to $A100/t.

While one possible reason for the discrepancy could be that Adani had long-term contracts in place, Campbell – who previously provided expert evidence in court in a case involving Adani’s project approval – argued this was unlikely given the location of coal sales varied considerably over the years.The Queensland government recently secured a new royalty deferment deal with Adani, which builds on one struck under the former government.The details are confidential.While a deferment deal might result in Adani paying lower royalties than expected, it would not change the prices it sells its coal.The director of Climate Energy Finance, Tim Buckley, said the Australia Institute modelling was as “accurate as possible” for an external third party to conduct and that it should prompt the Queensland and federal governments to investigate.

Buckley is a former investment banker who has previously provided expert evidence in a court case involving Adani.The Australia Institute findings follow research by Guardian Australia that found the Indian conglomerate paid zero corporate tax from its Carmichael operations since opening in the 2021-22 financial year, raising questions over how beneficial the project is to the national economy.Adani pledged just over a decade ago to plough $22bn in taxes and royalties into the Australian economy, although the mine is smaller than once anticipated.Adani’s Queensland operations, whereby coal is sent through the Great Barrier Reef’s shipping channels, is among the most politically divisive projects in Australia.It started assembling coal for export shortly before Russia invaded Ukraine in early 2022, which sent prices surging amid concerns global energy supplies would be disrupted.