Australia Awards South Korea Defence Contract

South Korea’s biggest defence company Hanwha Aerospace has beaten Germany’s Rheinmetall to win an Australian contract worth up to A$7 billion for building 129 infantry fighting vehicles.

The deal, which Defence Industry Minister Pat Conroy described as one of the largest projects in the history of the Australian army, will have a value of A$5 billion to A$7 billion.

“The state-of-the-art vehicles will come with the latest generation armour, cannon, and missiles, providing the protection, mobility, and firepower needed by soldiers in close combat,” Conroy told reporters.

The new vehicles, to be built in Australia at Hanwha’s facilities in Victoria state, will replace the M113 armoured personnel carriers that first entered service in 1964.

Report says Australia has been upgrading its defence capabilities, citing the changing strategic environment in the Pacific region, where China is looking to increase its influence.

Conroy said the government will speed up the process so that the first vehicle can be delivered in early 2027, two years earlier than planned, and the final vehicle by 2028.

Meanwhile, Hanwha said the deal would further boost ties between Australia and South Korea and had “significant implications” for defence and economic cooperation.

Rheinmetall did not respond immediately to a request for comment.

The decision to pick Hanwha’s Redback as Australia’s new infantry fighting vehicle comes two weeks after a trip by Prime Minister Anthony Albanese to Germany, where he signed an in-principle agreement to export 100 Boxer armed carriers made in Australia by defence contractor Rheinmetall back to Germany.

REUTERS/Christopher Ojilere