Meanwhile, another environmental group, Lock the Gate, wants the government to force Adani to pay up front the $1.5 billion it says it will cost to rehabilitate the Carmichael site once the mine operation has ceased.
After almost seven years, intense negotiations, government approvals, significant sweeteners and growing environmental protests, the controversial $21 billion Adani Carmichael coal mine project has come to a screeching halt over a State Government brawl over around $300 million in royalty payments.
"Adani is advised that the Queensland cabinet did not consider any submission or make a decision on royalties for the Adani project", the news agency quoted Watson.
The federal government, led by Deputy Prime Minister Barnaby Joyce, signed a Memorandum of Understanding with Arrium earlier this month.
"We are in there batting for them, we are in Whyalla to make sure this project goes ahead", he said.
"I'm very happy with the progress that is being made to develop the policy framework that will open up these [mining] ares across Queensland", she said.
"The order represents around 2% of the Whyalla Steelworks' production, we produce over a million tonne of steel a year here".
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The group has so far invested Australian dollar 3.4 billion on the Abbot Point port and preparatory work for the Carmichael coal mine.
Arrium was contacted but did not comment on the postponement of the project.
The government of Queensland had previous year given Adani the permission to mine coal reserves estimated at 11 billion tons.
If the Adani project "is a commercial success then it doesn't need the taxpayers to underwrite a billion dollar loan to a multi-billion dollar coal company", Shorten said at a press conference on Wednesday.
It has sparked internal divisions within Labor and the opposition has been quick to accuse the state government of being in a "civil war" with the Left and Right factions bickering over the proposed deal.
Environmentalists describe the situation as Adani "blackmail", while Federal Resources Minister Matthew Canavan is tearing his hair out that one of the world's biggest coal mine projects has come down to a fight over tax relief.
Mr Davies said neither the fund nor the Export Finance and Insurance Corporation had consulted IA over the project. Activists alleged that the project would stoke global warming and could damage the Great Barrier Reef.