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House of Assembly - Fifty-Fifth Parliament, First Session (55-1)
2025-09-04 Daily Xml
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Northern Water Project

Mr PATTERSON (Morphett) (15:08): My question is to the Premier. Is the Northern Water project at risk? With your leave, sir, and that of the house, I will explain.

Leave granted.

Mr PATTERSON: Fortescue and Origin Energy, once mooted as potential water customers who agreed to contribute to a $200 million feasibility study with BHP and the state government, have now pulled out of the project.

The Hon. A. KOUTSANTONIS (West Torrens—Minister for Infrastructure and Transport, Minister for Energy and Mining) (15:08): The short answer is no. The long answer is: as the member knows, the amount of money that these companies were projecting to supply for the prefeasibility was small in comparison with the commonwealth government's, the state government's and BHP's contribution to prefeasibility.

Prefeasibility is about making sure we can unlock the Gawler Craton primarily for copper production. Ancillary offtakers are welcome but, more importantly, this project will only proceed if BHP are able to negotiate with the state government a water offtake that is suitable for them, suitable for us and, of course, allows them to build their second stage smelter to unlock their mining-concentrated growth program at Olympic Dam, to expand Carrapateena, to make Prominent Hill a longer-life mine and, ultimately, to develop Oak Dam.

This project is about mining first and foremost. South Australia is blessed to have some of the world's largest copper reserves. We have a stable regulatory regime, a regime that is the envy of not only the nation but most Western developed countries. You have seen the pressure that other countries are putting on BHP to develop their copper mines. You are seeing pressure in Chile, you are seeing pressure in Argentina and you are seeing pressure in the United States. The truth is, though, that South Australia has probably the most secure, stable regulatory framework of any jurisdiction anywhere in the world for long-term copper mining.

BHP and Western Mining and other explorers have been drilling into Olympic Dam since it was discovered and still are yet to find the bottom. If you look at the projections from BHP, this is now a mine life of over 100 years. What we need is to make sure that we can limit the offtakes from the Great Artesian Basin for those environmental benefits. The deal that was done in the 1980s to give BHP unlimited access to the Great Artesian Basin might have been suitable in 1982 but it is not suitable in 2025. The people who are saying that the loudest are BHP themselves. So an alternative water source for mining is absolutely important.

The opportunity for other offtakers is always going to be there, but the success or otherwise of the Northern Water project will hinge on the ability of BHP to invest that money in South Australia. That is what will drive the success of that one way or another. We know the best thing about Olympic Dam and the best thing about what is occurring at OD is not just the copper mining but the copper metals that are being made, because we are going up the value chain.

It was an inspired decision by Roger Goldsworthy, as we just discussed in this place. For this copper concentrate with these uranium levels, there would only be a few refineries around the world that would take that level of uranium in its concentrate to process it. Processing it here means we go up the value chain. A second-stage smelter will allow BHP to mine the ore body as it arrives rather than try to find different parts of the ore body to mine that can be mixed in the one-stage smelter that they have.

This is something that the state government is very excited about. We are working very, very hard to make sure the prefeasibility comes in in a way that allows us to go out for a request for tender to go to the next stage of the project, where we actually go out and have two entities fighting it out for the right to build this.

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