(Adds missile export comments; paragraphs 5-11)
Australia said it would jointly manufacture long-range Naval Strike Missiles and Joint Strike Missiles with Norway's Kongsberg Defence in the city of Newcastle on Australia's eastern coast, the only site outside of Norway.
Defence Industry Minister Pat Conroy said the Australian government will contribute A$850 million ($574 million) to establish a manufacturing facility with Kongsberg at the Newcastle Airport precinct later this year, with production to start in 2027.
The anti-ship cruise missiles would be used by the Australian Defence Force and also exported by the U.S. security ally, he said. It will be one of only two facilities in the world capable of producing the missiles, and the only site outside Kongsberg, Norway.
Australia has said it will establish guided weapons manufacturing under a defence overhaul to boost the Australian Defence Force's long-range precision strike ability, amid rising tensions in the Indo-Pacific.
"There is huge global demand and constraints on the supply chain around the world. So not only is it cost-competitive to build them here, it will actually deliver the missiles faster than if we were relying on a production line overseas," Conroy said at a press conference in Newcastle. "There is huge export opportunities for these missiles as well."
The Naval Strike Missile is being used by the U.S. Marines to equip land-based trucks for anti-ship capability, Conroy said.
"We will have the capacity not just to sustain and refurbish our missiles; we can potentially do that for United States forces who might be positioned in the Indo-Pacific," he said.
Around 2,000 U.S. Marines have a rotational presence in northern Australia for six months of the year.
The Joint Strike Missile is the only strike missile able to be carried in the weapons bay of the F-35 fighter jet.
Australia has two F-35 stealth fighter squadrons, based at Williamtown near Newcastle and at RAAF Base Tindal in northern Australia, which is being upgraded by the United States to also host U.S. bomber aircraft.
In the Indo Pacific region, Japan and South Korea have F-35 squadrons while Singapore has ordered the fighter jet.
Australia is also developing a hypersonic missile with the United States, and will start co-manufacturing guided missiles with the United States next year.
($1=1.4815 Australian dollars)
