BAE Systems has secured a contract to build Australia’s nuclear-powered submarines, marking a significant phase in the Aukus military alliance between the UK, Australia, and the US. The contract, valued at £2.4 billion over ten years, is a partnership between BAE Systems and the Australian government-owned ASC. This union underscores Australia’s confidence in the UK’s defence sector, with Defence Secretary Grant Shapps highlighting the project’s economic benefits, including the creation of 1,170 jobs by Rolls-Royce in Derby and a total of 7,000 jobs within the UK.

The submarine program, based on UK designs and incorporating a US weapons system, will see its production peak at over 21,000 workers. Set to be delivered between the late 2030s and early 2040s, these vessels will replace Australia’s current fleet. The initiative also involves a collaboration aimed at advancing manufacturing capabilities and establishing leading production lines in Australia and globally.

Australia has committed AU$4.6 billion ($3 billion) to the project, reflecting its role in bolstering defence and addressing global security challenges, including China’s growing assertiveness in the South China Sea and the South Pacific. The UK’s enhanced production of submarine nuclear reactors, facilitated by the investment, will extend Rolls-Royce’s capacity in Derby, UK.

This strategic development follows the recent Defence and Security Co-Operation Agreement between the UK and Australia, signifying deeper ties and shared commitments to security amidst an increasingly volatile global landscape. Through the AUKUS partnership, Australia will also receive at least three US nuclear submarines in the early 2030s, reinforcing the collaborative effort towards long-term industrial and defence development.