Rio Tinto says it may be forced to build a second, $400 million desalination plant for its Pilbara iron ore operations after traditional owners demanded the government halves the amount of groundwater extracted in the region.

The Yindjibarndi Aboriginal Corporation dropped a bomb on the country’s major iron ore and gas exporters last week, when it formally asked the Western Australian Environment Protection Authority to limit groundwater extraction in the West Pilbara to 4 billion litres a year.