Tamworth is set to be the centre of a world-first technological innovation that would produce water using nothing but air and renewable energy.
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Llewellyn Owens, managing director of Vesi Water Group, said the patented nanotechnology was born of necessity.
"It was born here," he said.
"It came about because there's a few engineers in town, we were about to run out of water, there was the drought situation, so we started to work on the issue."
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Using solar power, the technology can harvest more than 200 litres of clean water per day from thin air.
The company is currently developing the technology, and aims to have a demonstration project within a year.
The University of New England (UNE) will help provide the company a pilot production facility in Armidale.
The facility will produce the cutting-edge graphene oxide material the technology requires.
The technology operates "like a water generator" providing a continuous supply of drinking water, initially at a scale suitable for a home, Mr Owens said.
The company has plans for community-sized products, but once the technology is proven it could be used for large-scale industrial users like Baiada.
UNE Vice Chancellor Brigid Heywood said she hopes the solution would prove translatable to solve water crises in countries all over the world.
"There is an ambition here into looking at the scaling of it, addressing the power cycle that needed for scaling both of the device and its utility," she said.
"We have all the possible laboratory sites where those pilots can be explored.
"We can do it in parallel with other industries in the region - they're also looking at renewable energy support - in a whole range of different configurations."
UNE Professor Trevor Brown said the university facility would be the only one in the world to produce the graphene oxide the technology requires for the purpose of extracting water.
The invention of graphene, which is a one-atom deep sheet of carbon, earned the 2010 Nobel Prize.
Mr Owens said the approach was so old the Aztecs once used it, but the technology to run it is novel.
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