Image Credits : A design for the Cape Hardy desalination plant on South Australia's Eyre Peninsula.(Supplied: South Australian government)| Visual for illustration purpose
3 minutes read

SA government to spend $100m on ‘pre-feasibility study’ for Northern Water desalination plant and pipeline network

The South Australian government will spend $100 million on a feasibility study to help it decide whether to build a desalination plant on Eyre Peninsula. 

Mining giant BHP will also contribute $77 million to the study.

It is estimated the proposed Northern Water desalination plant and pipeline would cost taxpayers more than $5 billion and support 4,200 jobs.

Premier Peter Malinauskas said the project would be the biggest infrastructure investment in the state’s history.

“We have spent a lot of money on hospitals, we have spent a lot of money on roads, but never before have we contemplated a piece of infrastructure that is exclusively for the economic benefit of our state,” he said.

If approved, the 260 megalitre desalination plant at Cape Hardy, and 600 kilometres of pipeline, would provide a sustainable water supply for the mining and agricultural industries in the state’s north.

The project would increase the ability of BHP and other mining companies to produce copper.

BHP’s asset president for copper in South Australia Anna Wiley said the project would support its “growth ambitions”.

“Global demand for copper is growing fast, and the opportunity for South Australia is significant,” Ms Wiley said.

It could also be a boost for the state’s planned hydrogen industry near Whyalla.

The business case for the project estimates it would generate $5.2 billion in economic activity annually and increase royalties for the state by $9 billion by 2050.

‘We need water’

Mr Malinauskas said it would also help position South Australia to capitalise on the green transition.

“In South Australia we’ve got what the rest of the world wants and needs [to decarbonise],” he said.

“We’ve got the copper that’s critical to magnification, we’ve got the magnetite that’s required for green iron production, we have the renewable energy that the rest of the world longs for that we could potentially supply them in the form of hydrogen.

“In order to be able to unlock those opportunities we need water, and we need water in a dry part of our state.”

BHP says the project would support its “growth ambitions”.(ABC News: Eugene Boisvert)

The premier said if BHP walked away from the proposal, taxpayer money could be recouped.

“In the event that the pre-feasibility study establishes that the Northern Water Project is economic and that it is in the state’s interest to pursue, and then BHP, in turn, decides to walk away from that opportunity … then that $100 million contribution the state government has made is at risk to BHP,” he said.

South Australia has a desalination plant at Lonsdale that is owned and operated by SA Water, and part of its costs are passed on to customers.

The premier said that if the government moved ahead with a plant on the Eyre Peninsula, it would not result in higher water bills.

“It isn’t going to be built, owned and operated by SA Water, which means it won’t have any impact on peoples’ SA Water bills,” Mr Malinauskas said.

“Instead, it would be a state government piece of infrastructure underwritten by the commercial offtake agreements we would enter into with potential users such as BHP.”

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