Australia stumps $4.6b to help UK build submarine parts

Australia will spend more than $4.6 billion on a submarine nuclear reactor factory in the United Kingdom to ensure a high-powered fleet arrives on time.

The 10-year deal will boost capacity at the Rolls-Royce factory in Derby and bankroll the design costs of a new class of boats that Australia will build.

Defence Minister Richard Marles and UK counterpart Grant Shapps will announce on Friday that BAE Systems will build Australia’s nuclear-powered submarines at the Osborne shipyard in Adelaide.

At least $2 billion has already been allocated to build a submarine construction yard at Osborne, while at least $30 billion will go into propping up Australia’s industrial base over the next three decades.

The Australian Submarine Corporation will work with American and British industry to bolster its ability to sustain and operate nuclear-powered submarines.

Australia will acquire at least three US Virginia-class nuclear submarines from the early 2030s under an AUKUS agreement that includes the UK.

The nations will then collaborate a new fleet of submarines.

“This is not a normal procurement, we are not going off to a shop to buy an item,” Mr Marles said.

“This is a partnership between three governments which is intended to last forever and a partnership which will involve the most developed industrial production line in our country.”

Mr Shapps defended the costs, saying the complicated program wouldn’t happen overnight and would create thousands of jobs over decades.

“Nuclear-powered submarines are not cheap but we live in a much more dangerous world where we are seeing a much more assertive ... China,” he said.

“We live in a much more dangerous world all around with what’s happening in the Middle East and Europe and countries need to invest in making sure that adversaries see that we’re serious about our security.”

Australia will build the submarines in Adelaide but the nuclear reactors used for propulsion will be built by Rolls-Royce in the UK.

The AUKUS-class submarines will stem from a UK design with input from all three nations, including the embedding of a US weapons system.

Pilot programs include non-destructive testing traineeships to boost the number of testing technicians, welding and fabrication initiatives and international placements.

The UK defence and foreign ministers are in the country for talks with their Australian counterparts at an annual AUKMIN meeting.

The two-on-two meeting will take place in Adelaide.

The Australian and British defence ministers have signed a treaty to allow their militaries greater access to each other’s nations.