Australia has signed a $716.5 million (A$1 billion) defense deal with South Korea aimed at boosting Seoul’s ability to grow its military exports.
Under the terms of the deal, South Korean defence company Hanwha Corp will build 30 self-propelled howitzers and 15 armoured ammunition resupply vehicles for Australia.
“It’s an important further chapter in the defence industry story for Australia as we continue to build our sovereign capability and (South) Korea is an important partner in that journey,” said Australian Prime Minister Scott Morrison.
The deal positions Hanwha as a frontrunner for Australia’s planned A$30 billion contract to build infantry fighting vehicles for its army.
With the news reaching the market, Hanwha’s shares were up by 3%.
Both countries have agreed to work closely to help ensure supplies of critical minerals from Australia continue to remain steady for South Korea’s tech sector.
In recent months, countries around the globe are moving to reduce their dependence on China following growing concerns of Beijing having a tight control over the critical minerals sector.
South Korea needs critical mineral supplies, having pledged to become a global battery manufacturing powerhouse by 2030 as part of its plan to be carbon neutral by 2050.
Australia supplies around 40% of South Korea’s critical mineral imports, which are crucial for many of the components needed to drive the world’s economies to net zero emissions by 2050. ($1 = 1.3957 Australian dollars)