The Commonwealth has signed a $1 billion deal with Korean manufacturer Hanwha for the Project LAND 8116 Phase 1 protected mobile fires requirement for the Australian Army.
Signed in the presence of Prime Minister Scott Morrison and South Korea President Moon Jae-in, the deal will see 30 Hanwha AS9 Huntsman self-propelled howitzers (SPH), 15 AS10 armoured ammunition supply vehicles (AARV), and counter-fires radar acquired. The vehicles will be manufactured at a new Armoured Vehicle Centre of Excellence (AVCE) to be built in Geelong south of Melbourne, with work on the facility expected to commence in 2022.
LAND 8116 Phase 1 is a revival of the previously cancelled LAND 17 Phase 2 self-propelled artillery project which was originally proposed by the Howard Coalition government in the 2006 Defence Capability Plan (DCP), before being delayed and then cancelled by the Gillard Labor government in 2012 as part of wider-ranging defence funding cuts.
The signing of the contract marks the first major defence acquisition for Australia to be sourced from an Asian nation.
“The prime ability of the new vehicles is to fire and move quickly, avoiding enemy counter-attack,” Minister for Defence Peter Dutton said in a December 13 release. “This project will mean a significant increase in the level of firepower and security for Australian artillery capability.
“We are committed to keeping our region safe, while protecting our interests in a rapidly changing global environment,” he added. “The Self-Propelled Howitzer capability, including a strengthened industrial base, is one of several projects that will modernise the Australian Army, ensuring it continues to maintain a capability advantage now, and into the future.”
LAND 8116 Phase 1 was initially announced to be built in Geelong during the May 2019 federal election campaign, ostensibly in an effort to shore up support for the then Liberal member for Corangamite, Sarah Henderson, and to wedge the Labor member for the neighbouring seat of Corio and opposition defence spokesman, Richard Marles. Corangamite was subsequently won by Labor’s Libby Coker in the 2019 election, but is held by a slim margin of less than one per cent, and thus will likely be a seat the LNP Coalition will try to reclaim in the 2022 election.
The new facility will be the third armoured vehicle manufacturing plant to be established in Australia, after Thales Australia’s Bendigo facility in Victoria which builds Hawkei and Bushmaster protected military vehicles (PMV), and Rheinmetall Australia’s MILVECHOE near Ipswich in Queensland which builds the Boxer combat reconnaissance vehicle (CRV).
“Our Comprehensive Strategic Partnership with the Republic of Korea is underpinned by our joint commitment to defence and security cooperation,” Prime Minister Morrison said. “The contract with Hanwha demonstrates the value of industrial collaboration in supporting our countries in addressing mutual security challenges.
“We are partnering with Hanwha to create an Armoured Vehicle Centre of Excellence in the Geelong region, which will establish a further strategic defence industry hub and future export opportunities for Australian businesses,” he added.
Present at the ceremony was President and CEO of Hanwha Defense Corporation, Jaeil Son, and Managing Director of Hanwha Defense Australia, Richard Cho. “I am enormously proud for Hanwha to be part of such a significant occasion,” Mr Son said in a company statement. “To see the Korean President side-by-side with the Australian Prime Minister makes the grow.
“Both countries have much to gain from each other economically, but benefits are especially significant in terms of regional security,” he added. “The long-standing trust and friendship between Australia and the Republic of Korea is a great asset.”
If its bid for the Project LAND 400 Phase 3 infantry fighting vehicle requirement is successful, Hanwha is expected to also build more than 400 K21 Redback vehicles at the AVCE. Hanwha has also flagged the possibility of the AVCE becoming a second-source line of vehicle and spares for the Republic of Korea (RoK) Army.
“With Australia’s close proximity to Republic of Korea, and the strong bilateral relationship between the two countries, Hanwha’s Australian facility will also become a critical and important secondary line of supply back to South Korea,” Mr Cho said. “The Australian operation will also help Hanwha fulfil contracts in other parts of the world and deliver capacity to engage with Five Eyes nations.”
Interestingly, Prime Minister Morrison said at the signing ceremony that the LAND 8116 signing puts Hanwha in a “strong position” for LAND 400 Phase 3, saying South Korea is a “like minded” neighbour in the region.
If successfully delivered and integrated, it is expected a follow-on LAND 8116 Phase 2 which was announced in the 2020 Defence Strategic Review and accompanying Force Structure Plan will add additional protected mobile fires capability in the late 2020s, while a nascent Phase 3 will deliver a mid-life upgrade to the capability in the 2030s.