New desalination plant proposed for Point Lowly near Whyalla

The project unveiled by Oz Minerals, BHP, SA Water and the state and federal governments would ease pressure on artesian-basin water supplies in the outback.

Point Lowly is described as being among sites to be considered in the Spencer Gulf region with the impact on its cuttlefish breeding ground to be looked at in a business case.

The developers say other coastal and inland options for the site will be considered.

"We are investigating what the viable options are and when we have narrowed this down, we will consult with those communities," a spokesman said.

If it goes ahead, the project could support up to 8000 construction jobs and up to 6000 ongoing jobs once operating.

The governments hailed the project as "historic and state-building", saying it will boost South Australia's economy, create jobs and provide a long-term water source in the north.

The business case for what will be known as the Northern Water Supply Project will be funded by $15 million from the governments.

The plant would reduce reliance on water from the Great Artesian Basin and the River Murray.

Federal Grey MP Rowan Ramsey said the expansion of the resources industry in the north of the state was a reality and not "some dream in the far-off future".

"South Australia already relies heavily on the resources industry and water is an essential ingredient to mine, concentrate and process our product," he said.

"Today, this water is sourced from either the Great Artesian Basin or the Murray River and trying to extract more from these sources is not environmentally sound.

"We are well aware of the long-term issues with the Murray and the Great Artesian Basin is a national treasure which is vital to our traditional grazing industries and small communities that continue to thrive in our harsh environment."

"While we know the basin replenishes, it is an incredibly slow process and maintaining the pressure in the basin is of paramount importance. Simply, we cannot continue to grow the resources industry without finding a new source of water.

"It is encouraging that our two biggest players in the industry, BHP and OZ Minerals, recognise the need and are part of the agreement. Desalination would seem the obvious answer, but there will be a whole lot of community concerns which will need to be addressed along the way. This project will do that."

BHP Asset President, Dr Jennifer Purdie, said BHP was happy to be involved in a project that has the potential to support industry and agriculture in rural and regional South Australia by improving water stewardship and creating opportunities for future investment and jobs.

"This is a positive step forward in BHPs commitment to make our Olympic Dam operations more sustainable. We are taking action to reduce water use across our operations, and partnering with others in the communities and regions where we operate to help achieve this," she said.

"South Australia has an important role to play in producing the high-quality copper the world needs to grow and decarbonise, and these types of projects can help us deliver more sustainably now and into the future."

OZ Minerals Chief Executive, Andrew Cole, said the company was keen to play a part in collectively exploring a sustainable way forward that creates value for regional communities and industries.

"Water is an essential consumable for our operations and a critical resource for our stakeholders, particularly for the communities in which we operate, so we recognise the need to responsibly consume this water.

'"Although OZ Minerals does not draw from the Great Artesian Basin, we support this project for reducing consumption of groundwater and securing sustainable water sources for the future.

"Our South Australian Assets, Prominent Hill and Carrapateena, are in arid areas and use saline groundwater to sustain operations. Both assets use hypersaline water drawn from aquifers that do not compete with demand from natural systems or other land-connected people, and one of our aspirations as a modern mining company, is to strive to minimise water use and add value when we do."

SA Water Chief Executive David Ryan said the corporation was happy to support the initiative aimed at securing South Australia's water future.

"In the face of a changing climate it is critical that we think ahead to ensure fit-for-purpose water is secured for the long term," he said.

"Collaborating with private sector partners in an investigative process like this promotes the diverse thinking that will ensure all sources, delivery and service options are considered."

The South Australian Chamber of Mines and Energy congratulated the state government on working with the resources sector to progress a major economic development initiative.