Defence has signed a new $1.1 billion, 10-year agreement with Thales Australia for the continued management and operation of Australia’s munition factories in Benalla (Victoria) and Mulwala (NSW), and a separate 10-year contract with NIOA Munitions for a tenancy at Benalla.
According to Defence, the new agreements underpin the renewed strategy of multi-tenancy at the Benalla and Mulwala factories and ensure access and support to other companies.
Minister for Defence Linda Reynolds said that the contracts will allow both companies to work together on supplying munitions to the ADF.
“This contract will establish NIOA as a tenant alongside Thales Australia, where together they will provide opportunities for domestic manufacturing while enhancing supplies of key munitions for Defence," Minister Reynolds said. “It’s vital that we continue to enhance the readiness of the ADF and ensure we have the necessary sovereign depth for sustaining key capability and materiel such as the surety of supply of munitions.
“Mulwala and its sister facility in Benalla are the home of munitions manufacturing in Australia."
Thales says the contract will allow it to secure more than $450 million in export and non-ADF orders over the coming decade.
Minister for Defence Industry Melissa Price said the Government had identified munitions and small arms as a critical capability for a sovereign defence industry.
“We’ve developed and implemented a plan to grow munitions and small arms capability in Australia, as one of our Sovereign Industrial Capability Priorities,” Minister Price said. “It’s about identifying critical capabilities for the ADF, strengthening our defence industry, and creating new opportunities.
“Thales Australia has an excellent track record of working with local small businesses and I have no doubt they’ll continue to utilise the skills and ingenuity of small businesses right around Australia.”
Minister Price also highlighted NIOA's forthcoming manufacturing facility in Maryborough, built with joint venture partner Rheinmetall Waffe Munitions.
In-depth coverage of this story will be available on Thursday in the next edition of Defence Week.