Minister for Defence Industry, the Hon Christopher Pyne MP, today announced that Defence will enter into negotiations with Thales Australia, trading as Australian Munitions, for the continued management and operation of Australia’s munition factories at Mulwala and Benalla (Victoria)

Minister Pyne said the Turnbull Government recognises the importance of the Defence- owned munitions factories that produce ammunition for the Australian Defence Force.

“With both facilities employing over 640 highly-skilled workers, this announcement provides certainty for workers that both factories will remain open for the long term”, Minister Pyne said.

“Under the existing contract, employment across the Benalla and Mulwala sites has increased by over 80 employees in 2017, generating vital job opportunities in regional Victoria and New South Wales.

“The Thales Australia supply chain includes 130 local small-to-medium enterprises, providing a wide range of goods and services to the Benalla and Mulwala sites.

“The negotiations with Thales will see a new strategic arrangement for the management and operation of the factories, improving price competitiveness and increasing export potential for Australian-manufactured ammunition and explosive products.

“This long-term, performance-based arrangement will provide a greater degree of certainty for Thales as the principal tenant and operator of the facilities and will enable seamless transition from the current contract when it expires in mid-2020.

“Drawing on the depth of engineering and manufacturing skills resident in these factories, the decision to commence negotiations with Thales builds on the well-established relationship between Thales and Defence.

“This announcement enables Defence to continue to capitalise on the more than $1.8 billion in investment it has made since the mid-1990s.

“The 1030 hectare Mulwala factory is the only remaining manufacturing site for propellants and high explosives in Australia, and the new propellant factory is arguably the most modern propellant manufacturing plant in the world,” Minister Pyne said.

Welcoming the move Federal Member for Farrer Sussan Ley noted that “support for Australia’s defence industries is a key policy for our Government, and to see this support flowing through to the Mulwala plant is a really important confidence booster for our region”.

The future arrangement will also see underutilised areas of the facilities sub-leased as additional precincts to other munitions companies, subject to maintaining high safety and security standards, either where Defence identifies a requirement for a particular product, or where a commercial or export opportunity exists.