€2.8 billion UK deal gets Australia closer to a fleet of nuclear-powered subs

UK, US and Australian officials during a visit to the Osborne Naval Shipyard in Adelaide, Australia, Friday, March 22, 2024.
UK, US and Australian officials during a visit to the Osborne Naval Shipyard in Adelaide, Australia, Friday, March 22, 2024. Copyright Matt Turner/AAP IMAGE via AP
Copyright Matt Turner/AAP IMAGE via AP
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The UK's defence minister said the deal was expensive but necessary.


Australia is set to provide AUS$4.6 billion (€2.8 billion) to British industry to support the construction of nuclear-powered submarines and ensure its new fleet arrives on time.

The announcement from the two countries on Friday came a day after they signed a defence and security pact to better meet challenges such as China's increased activity in the South China Sea and South Pacific.

United Kingdom Defence Minister Grant Shapps said the submarine programme was expensive but necessary.

“Nuclear-powered submarines are not cheap, but we live in a much more dangerous world where we are seeing a much more assertive region with China, a much more dangerous world all around with what’s happening in the Middle East and Europe,” Shapps told the Australian Broadcasting Corporation.

“Countries need to invest in making sure that adversaries see we are serious about our security, defending freedom of navigation, for example,” he added.

The 10-year deal announced at an annual ministers' gathering will boost capacity at the Rolls-Royce factory in Derby, UK, to build the nuclear reactors that will propel the submarines to be built by BAE Systems in Adelaide, Australia.

The Virginia-class submarines will be primarily from a UK design and will have a US weapons system onboard.

Australian Defence Minister Richard Marles said the agreement showed that the nuclear submarines programme would be fulfilled and would create new production capability for the AUKUS partners, referring to the grouping of Australia, the UK and the US.

“These are big foundational decisions which demonstrate that the pathway to Australia acquiring a nuclear-powered submarine capability under the banner of AUKUS is happening, and the result of that right here is going to be the most advanced manufacturing in the nation and one of the most advanced manufacturing production lines in the world,” Marles told reporters on Friday at the Osborne shipyard in Adelaide.

Australia is acquiring at least three US nuclear submarines from the early 2030s under the AUKUS agreement.

"Australia, the United Kingdom, and the United States remain fully committed to this shared endeavour," a joint trilateral statement from Marles, Shapps and US Defence Secretary Lloyd Austin said on Friday.

“These steps to grow Australia’s submarine construction and maintenance capability are critical to the AUKUS partnership, expanding trilateral industrial capacity and building the collective resilience of AUKUS partners to produce and sustain conventionally armed nuclear-powered submarines for decades to come.”

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