The Malinauskas Labor Government has reached agreement with the private sector to fund further studies, planning and negotiations to inform a final investment decision on the Northern Water project – a critical, sustainable supply of water for South Australia’s north.
If progressed, Northern Water would see construction of a 260 megalitre a day desalination plant on the Eyre Peninsula, and a 600-kilometre pipeline to transport desalinated water to the Far North.
A comprehensive business case has found the project has the potential to generate more than $5 billion in annual economic benefit and 4000 ongoing jobs by facilitating further development of industries crucial to the global decarbonisation effort, including copper, hydrogen and green iron, along with defence, pastoral, and community uses.
The Premier Peter Malinauskas today joined representatives from major companies who have agreed to co-fund with Government the critical next stage of investigations, ahead of a Final Investment Decision on the project in the first half of 2026.
BHP, Origin Energy, Amp Energy and Fortescue Energy are among private sector companies to contribute to the expected pre-FID costs of approximately $200 - $230 million.
The State Government and BHP have also agreed that BHP would cover the state’s costs to a maximum value of up to $100 million if the company withdraws from Northern Water before FID, or elects not to proceed with a water offtake agreement.
The amount would depend on the timing of any withdrawal and the amount of money spent up until that point.
Investigations in the lead up to the Final Investment Decision, include a range of project planning, design and assessment activities to provide a comprehensive understanding of expected project impacts, opportunities, costs and benefits. This will include:
*Evaluation of the overall environmental, social and economic impact of the project via an Environmental Impact Statement.
*Formal tender process and development of agreed contract terms with a preferred contractor to design, build, operate and maintain the plant and pipeline.
*Progression of required project approvals including Native Title, development approval and other land access agreements for the plant and pipeline.
*Ongoing engagement with stakeholders and the community to ensure risks and opportunities are properly understood and addressed.
*Other activities required to provide Government and project partners with clear understanding of the risks and opportunities associated with the project.
Capitalising on the state’s natural advantages in renewable energy and critical minerals, essential in the global effort to decarbonise, Northern Water aims to provide a sustainable water source, reducing reliance on the Great Artesian Basin, which is non-renewable and climate-change sensitive.
A summary of the Northern Water Business Case is available here, while an indicative fly-through of the project is available here.
For more information or to provide comment go to northernwater.sa.gov.au or yourSAy.sa.gov.au/NorthernWater.
Quotes
Attributable to Peter Malinauskas
The announcement today signals a new era for the State as we lay the groundwork for the sustainable industrialisation of South Australia.
We have all the ingredients the world economy needs as it takes the necessary steps to decarbonise – copper, magnetite, a burgeoning hydrogen industry, the world’s best coincident wind and solar resource, and already world-leading renewable energy penetration.
The missing ingredient is water.
The commencement of formal studies marks the next step towards a long term and committed relationship between industry and government.
We look forward to progressing this important work ahead of a final decision on Northern Water in the first half of 2026.
Attributable to Anna Wiley, BHP Asset President, Copper South Australia
The Northern Water Supply Project is strategic infrastructure with the potential to benefit multiple sectors and businesses. We are pleased to partner with government and others in industry to progress further studies as we work towards a commercially sound, multi-user water project.
Global demand for copper is growing fast, and the opportunity for South Australia is significant.
BHP has created an integrated copper province that we hope will bring the scale required to economically and sustainably produce and process more copper here in SA and deliver it to global customers. The Northern Water Supply Project will support our South Australian copper operations and growth ambitions.
Attributable to Fortescue Energy CEO Mark Hutchinson
Partnering with Government on this desalination project lets us continue with the early scoping phase of our proposed Integrated Port Bonython Hydrogen project.
Fortescue Energy will work with the Government as it commences this next critical phase of work.
