BHP and state government name Mullaquana Station site for Northern Water project desalination plant

A $5bn desalination plant and pipeline project, poised to triple BHP copper mining volumes, has reached a major milestone with the announcement of the sites location.

A sheep station near Whyalla is slated to house a desalination plant for the $5bn Northern Water project and two consortia have been short-listed for the next phase, critical to unlocking BHP’s multi billion-dollar copper expansion.

The mining giant’s chief, Mike Henry, met on Friday with Premier Peter Malinauskas to finalise the Mullaquana Station site, about 20km south of Whyalla, ahead of Cape Hardy, about 30km northeast of Tumby Bay.

Mullaquana was chosen after a “multi-criteria analysis” assessed “regional industrial opportunities” and social, environmental and economic factors.

Importantly, Mullaquana would shave almost 200km off a previously projected 600km pipeline to BHP’s Olympic Dam copper smelter.

BHP chief executive officer Mike Henry at the firm’s annual general meeting in Melbourne. Picture: Supplied

Mr Henry said BHP was “pleased to become a foundation commercial customer to the Northern Water project”.

“This is a compelling example of national strategic infrastructure. It will enable multi-industry regional economic growth, including a potential doubling of South Australia’s copper production,” he said.

“Led by state government, with federal government support, this project represents the best of government and business working together to create investment and South Australian jobs.”

Mr Malinauskas said the agreement was “a massive milestone” for Northern Water and, potentially, Whyalla, because the new water supply was “poised to become the next big opportunity for the Upper Spencer Gulf region”, including Whyalla’s steelworks.

“South Australia is home to almost 70 per cent of Australia’s proven copper deposits, and there is a generational opportunity to maximise the benefit of this critical mineral for our entire state,” he said.

“If green-lit, Northern Water will support South Australia’s strategic mineral industries, including magnetite for steel production and copper expansion at Olympic Dam, Oak Dam and Carrapateena.”

BHP asset president Copper SA Anna Wiley, Premier Peter Malinauskas and BHP chief operating officer Edgar Basto, pictured underground at Olympic Dam in October. Picture: Brett Hartwig.

A final investment decision for Northern Water is expected towards the end of 2026, but the desalination site selection kickstarts project planning, procurement and statutory assessment.

The government says the project cost would be recovered by future commercial offtake agreements with industrial customers, primarily BHP.

The two short-listed consortia, WaterConnector and Watermark, will provide detailed bids outlining plans to design, build, operate and maintain the proposed Northern Water desalination plant and pipeline.

BHP in October announced it would pour almost $1bn into game-changing projects at Olympic Dam, having in late August formally started an application and assessment process for the planned smelter and refinery expansion, for which a final investment decision on phase one is scheduled for 2027.

A Northern Water project business case summary, released in February, 2024, forecast the project, estimated to cost more than $5bn, would create more than 4200 jobs and deliver an average annual $5.2bn boost to the state’s $134bn economy.

It found the project would kickstart a tripling of copper mining volumes, generating $9bn in extra royalties for the state’s coffers.

Originally published as BHP and state government name Mullaquana Station site for Northern Water project desalination plant