Melbourne: The Queensland government on Friday decided not to grant a royalty holiday to Adani's controversy- hit Carmichael mine project in Australia, a setback to the Indian energy giant which said it would review the Cabinet's decision.


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Following a Cabinet meeting, Queensland Premier Annastacia Palaszczuk said that an agreement was reached unanimously that Adani will pay full royalties for its $21.7 billion Carmichael coal mine in central Queensland.


"There will be no royalty holiday for the Adani Carmichael mine. The Adani Carmichael mine will pay every cent of royalties in full," Palaszczuk said.


In a statement released after the Cabinet's decision, Adani Australia said it will analyse the details of the Cabinet's decision once it was formally provided to them.


"Adani Australia will give urgent consideration of State Cabinet's decision on a royalties arrangement for the Carmichael coal mine project," the company said.


Adani reiterated that "it will pay every cent of royalties to the state as was always the case, and that it also remains committed to regional Queensland and generating 10,000 direct and indirect jobs".


Earlier this month, the ABC News reported that the state government was considering giving Adani a discount on royalties which could total up to 320 million Aus dollars in lost revenue to the state.


On May 22, Adani deferred a final investment decision on its much-delayed Carmichael coal mine project after the Queensland government failed to decide on royalties amounting to millions of dollars for the project.


Adani wanted the Queensland government to delay the start of royalty obligations on the coal mine it hopes to build in Queensland's Galilee Basin.


The Carmichael project, which is expected to create hundreds of jobs, has been facing opposition from environmentalists and indigenous groups.


The group has for more than five years battled opposition from green groups who are opposed to any expansion of the port, saying it will cut into the Great Barrier Reef World Heritage Area.


The Adani group entered Australia in 2010 with the purchase of the greenfield Carmichael coal mine in the Galilee Basin in central Queensland, and the Abbot Point port near Bowen in the north.


Australian Resource Minister Matthew Canavan on May 24 warned the Queensland government that India could look elsewhere for its coal requirements if it delays its decision on a royalty holiday deal with the Adani Group.


"India has a massive need for energy resources in the next couple of decades. A huge part of that will be increased coal use... We have the ability to produce the most environmentally sustainable energy resources for India," Canavan said.