After news broke last month that Austal had issues with a shipment of Chinese aluminium, the company announced on the ASX this week that it has begun talks to sell its joint venture stake in Aulong Shipbuilding to Guangdong Jianglong Shipbuilding Company (Jianglong Shipbuilding) of Zhuhai, China.
The shipment was due to be part of the $350 million Evolved Cape Class program for Defence. The metal had gone through a number of checks before it hit the Austal yard in WA but stringent quality assurance frameworks picked up the issue before it was used in a ship.
“A letter of intent has been executed by the parties targeting completion of the negotiations by 31 October 2021,” the ASX statement from Austal said.
“Austal will update shareholders of future developments. Aulong was established in June 2016 with the aim of pursuing commercial passenger and non-military vessel opportunities in mainland China.
“Austal (with 40 per cent ownership) has licensed a number of its proven, commercial aluminium vessel designs for marketing throughout mainland China and construction at Jianglong Shipbuilding’s established facilities in Guangdong province. Jianglong Shipbuilding (with 60 per cent ownership) brings local shipbuilding infrastructure, experience and expertise, with close to 1,000 employees across two shipyards supporting the joint venture.”
Since 2016 Austal has run Aulong Shipbuilding as a JV, which constructs "commercial passenger and non-military vessel opportunities". Austal has licensed a number of its "proven, commercial aluminium vessel designs" for marketing through mainland China.