Australia to Spend $3.2 Billion to Build Up Aukus Shipyard

(Bloomberg) — Australia plans to pour more funds into a government-run shipyard in preparation for building nuclear-powered submarines as it moves to build up its navy and expand its domestic shipbuilding capacity.

The government will spend A$4.6 billion ($3.2 billion) on the Osborne Naval Shipyard in South Australia, Defense Minister Richard Marles announced on Friday. This comes on top of the A$3.9 billion announced in February.

The money will go towards new infrastructure and training for workers who will eventually build submarines, under the Aukus agreement with the US and UK.

According to South Australian premier Peter Malinauskas, the planned submarine construction site will be 10 times the size of the existing shipyard, which currently builds surface ships for the navy.

“This investment is another important step in building the sovereign capability Australia will need to build, operate, maintain and sustain our future submarine fleet,” Marles said in a statement.

“The work now underway at Osborne shows that Aukus is on track and happening now, while creating opportunities for Australian industry and workers for decades to come.”

Aukus is designed to check China’s military advances in the Indo-Pacific as Beijing grows in military power as well as economic power. The agreement, agreed in September 2021, has two prongs: Australia’s purchase of conventionally armed, nuclear-powered submarines; and tripartite sharing of advanced capabilities, including quantum computing, hypersonic and autonomous weapons, and artificial intelligence.

Australia is in the midst of an unprecedented peacetime military expansion; It is spending money on new ships, missiles and other weapons, while also investing in local capacity to manufacture and maintain these systems.

As part of this, the government announced last September that it would invest A$12 billion in a separate shipyard near Perth, aiming to increase capacity there to build surface ships.

Austal Ltd. has a shipyard at the complex where it plans to build eight heavy landing ships for the military and later build capacity to build more complex warships such as the Japanese Mogami frigate. The shipyard will also be used for the maintenance and repair of submarines, including three second-hand nuclear-powered boats that Australia plans to purchase from the US before the Aukus ships are ready.

(Updates with more details.)

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