A desalination plant is being proposed in the Tumby Bay District Council area for the Siviour graphite mine 15 kilometres west of Arno Bay.
Renascor Resources managing director David Christensen said the company had not yet determined a set location for the desalination plant and it could be at "a number of locations along the coast".
However council chief executive officer Trevor Smith said a site off of Wharminda Boundary Road on a road reserve on Tumby Bay District Council land was the most likely location for the plant and pipeline.
Renascor is proposing a plant that produces 2.2 gigalitres of treated water a year, transferred to the mine site through a 12-kilometre pipeline.
Mr Christensen said the mine's intended output of 825,000 tonnes of ore a year would require fresh water.
"Our plan is to mine ore that contains on average about 7.5 per cent graphite and then put the graphite-containing ore through a process plant to convert it to about 95 per cent graphite," he said.
"...water is needed in a flotation process where graphite floats to the top of large tanks.
"This flotation process generally requires fresh water, which is not available in sufficient amounts at the proposed mine site."
Mr Smith said he was briefed about the major project status of the mine and the associated infrastructure it would have but it was up to the Department of Planning, Transport and Infrastructure to approve the build.
"We might be invited to provide comment and conditions," he said.
However Mr Smith said if the company found appropriate underground water reserves the desalination plant would not need to be built.
"If they build a desal plant that's where they'll build it," he said of the council land.
Renascor plans to begin construction of the Siviour mine and desalination plant in 2020.