Historic billion-dollar defence contract with South Korea amid rising regional tensions

[DavidsSling]

Prime Minister Scott Morrison and South Korean President Moon Jae-in will discuss new low and zero-emissions technology partnerships in Canberra.(Twitter: @ScottMorrisonMP)


Australia's Defence Force will make history on Monday as it finalises a billion-dollar weapons contract with South Korea, in what is believed to be this country's largest-ever military deal with an Asian nation.

Key points:

• Australia has finalised a deal with South Korea defence giant Hanwha to build military tools in Geelong
• The $1 billion contract is Australia's largest ever defence contract with an Asian nation
• The contract will create at least 300 jobs, according to the plan first announced in 2019

The historic signing will occur during a four-day visit by South Korea's President Moon Jae-in, the first world leader to come to Australia since COVID-19 border restrictions were introduced last year.

Prime Minister Scott Morrison and Mr Moon will strike several other agreements when they meet in Canberra, including a new low and zero-emissions technology partnership.

Mr Moon is also expected to secure an agreement to help ensure supplies of Australian critical minerals exports for South Korea's tech sector.

This week's visit, which coincides with the 60th anniversary of diplomatic relations, will see Australian and Korean ties elevated to the status of a Comprehensive Strategic Partnership.

The federal government will use the occasion to formalise a $1 billion contract awarded to South Korean defence giant Hanwha to build 30 self-propelled howitzers and 15 armoured ammunition resupply vehicles for the army in Geelong.

As part of the project first announced during the 2019 federal election, Hanwha will partner with the Commonwealth to create an Armoured Vehicle Centre of Excellence in the Geelong region in a contract the government believes will create at least 300 jobs.

Hanwha is hoping the president's visit will bolster its bid for a much larger defence prize, a $30 billion contract to build new infantry fighting vehicles for the Australian Army.


Senior government figures believe the president's four-day stopover will send a timely message to regional neighbours, dispelling Chinese Communist Party propaganda that Australia is anti-Asian in its strategic approach.

Bill Paterson, a former diplomat who served as Australia's Ambassador to Seoul until 2016, says Mr Moon has calculated it is worth travelling to strengthen ties, despite possible repercussions from a rising China.

"At the end of his single five-year term and in the midst of the pandemic, it has to be quite important to signal a degree of support and comfort with Australia's membership of the Quad and the AUKUS agreement," he said.

"[The] Koreans have obviously taken a view that they want to send a positive signal to Australia both strategically and economically — and are prepared to take some measure of risk in this."

Recent outbreaks of the Omicron variant of COVID-19 have forced a scaling back of the president's travelling party and itinerary, and senior sources say a possible postponing of the trip was even discussed.

During their visit, the president and first lady will lay wreaths at the Australian War Memorial and the nearby Australian National Korean War Memorial, commemorating the shared sacrifice of both nations during the Korean War.

Mr Moon will also receive a ceremonial welcome from the Governor-General and in Sydney will meet Opposition Leader Anthony Albanese and New South Wales Premier Dominic Perrottet.

South Korea is Australia's fourth-largest trading partner, receiving over $25 billion worth of goods and services in 2020, including $18 billion worth of iron ore, coal, natural gas and beef.

Australia signs historic billion-dollar military deal with South Korea

The federal government finalises a $1 billion contract with South Korean defence giant Hanwha, making it Australia's largest military deal with an Asian nation.

www.abc.net.au