Austal awarded landing craft medium design and build contract

Austal has been awarded a AU$1.029 billion ($680 million) design and build contract for the "landing craft medium" (LCM) project under the Strategic Shipbuilding Agreement (SSA) signed with the Australian Government.

The project comprises 18 LCM vessels at Austal’s Henderson, Western Australia, shipyard. Construction of the first LCM is scheduled to commence in 2026 with the 18th and final vessel scheduled for delivery in 2032.

The LCM, being built for the Australian Army, will be manufactured in steel and capable of projecting loads up to 80 tonnes.

“This landing craft medium design and build contract awarded to Austal Defence Australia is the first vessel construction program in the government’s commitment to delivering continuous naval shipbuilding at Henderson, Western Australia, enlivening decades of opportunity for individuals and businesses to engage, collaborate and invest in defence programs,” Austal CEO Paddy Gregg said.

"With these 18 LCMs and any further vessels planned as part of the Strategic Shipbuilding pilot program, we are developing the shipbuilding capability to build larger, more complex vessels, in Henderson into the future and delivering sovereign shipbuilding capability for Australia.”

Shares of the shipbuilder rose as much as 1.7 per cent to AU$6.04 after the announcement, before reversing course to trade down 0.4 per cent.

The Australian Government last week said that it would not oppose a proposal by South Korea's Hanwha to nearly double its stake in Austal to 19.9 from 9.9 per cent, but it would be constrained by strict conditions covering data access and security.

(Reporting by Nikita Maria Jino in Bengaluru; Editing by Subhranshu Sahu)