Federal government frontbencher Karen Andrews told Sky News yesterday that given the state had said it would veto a requested Northern Australia Infrastructure Fund loan application for almost A$1 billion from Adani: "there won't be financing from the federal government".

However rail freight operator Aurizon has applied for NAIF funding to build the railway to link Carmichael to the port, sister publication Australia's Mining Monthly reports.

Aurizon's application has put the Queensland government in a difficult position and it is yet to state whether it would extend the veto to the Aurizon application, The Guardian reported on Friday.

Potential lenders including Westpac and Commonwealth Bank of Australia last year effectively ruled out providing funding for the controversial project, with Westpac launching an updated climate change action plan with "tighter criteria for financing any new coal mines".

Meanwhile construction has started at the A$16.5 billion (US$12.5 billion) Carmichael project and Adani said it now had a workforce of 800 people.

The project, which is set to be Australia's largest coal mine when completed, has been dogged by protests over feared environmental damage.