In the latest development, Mitsubishi Corporation has been chosen for a $6.5 billion contract to construct warships in Australia.
In a historic move, Mitsubishi Heavy Industries (MHI) has secured a significant contract worth approximately $6.5 billion to supply 11 advanced Mogami-class frigates to Australia. This deal marks Japan's largest-ever postwar defense export and the biggest defense industry agreement between Japan and Australia to date.
The contract, announced by Australia's Defense Minister Richard Marles on Tuesday, will see the construction of a fleet of 11 naval vessels that will replace Australia's ageing ANZAC-class ships. Three of these frigates will be built in Japan, with the first scheduled to be operational in Australia in 2030. The remaining eight will be constructed in Australia.
This deal is highly significant as it represents Japan's first major export of warships since before World War II and is only its second major defense export overall. It also marks Tokyo's first construction of a major surface warship overseas, signaling Japan's strategic aim to expand its defense industry footprint globally.
The Mogami-class frigates are stealthy, equipped with 32-cell vertical launch systems capable of firing long-range missiles, and are tailored to meet Australia's capability and strategic defense needs. These vessels have a range of up to 10,000 nautical miles (18,520 kilometers), providing Australia with the necessary reach to protect its interests in the Indo-Pacific region.
The contract was fiercely competitive, with MHI's Japanese design beating Germany's Thyssenkrupp MEKO A-200. Despite the German bid being cheaper and from a more experienced exporter to Australia, Australian authorities judged the Mogami-class as the "clear winner" based on cost, capability, and timely delivery schedule, fitting within a broader AU$55 billion budget for the navy’s surface combatant fleet over the next decade.
Strategically, the deal strengthens the security partnership between Australia and Japan amid growing Indo-Pacific regional tensions. It reflects Australia's commitment to accelerating delivery of a larger, more lethal surface combatant fleet to transform its defense forces. Japan considers Australia a semi-ally and has sought to deepen bilateral military cooperation amid ongoing regional tensions in the South China Sea.
In summary, MHI's winning of this multi-billion-dollar warship contract is historically and strategically significant for Japan-Australia defense relations, Japan’s defense export ambitions, and Australia's naval modernization plans. This defense industry agreement between Japan and Australia is the biggest ever struck between the two countries, marking a significant milestone in the defense exports of Japan.
- The defense industry agreement between Japan and Australia, with a worth of approximately $6.5 billion, is the largest ever recorded between the two nations, signifying a new milestone in Japan's defense export ambitions.
- This significant contract, involving the construction and supply of advanced Mogami-class frigates to Australia, also extends to the finance sector, as it will be backed by a $55 billion budget for Australian naval modernization over the next decade.
