The Rheinmetall NIOA munitions factory in Queensland is producing some 40,000 155mm artillery shells per year, with ambitions to take that to 100,000, of which all go to Europe and not one to the Australian Defence Force (ADF).
Right now, 155mm shells are the most in-demand military consumable in the world, with some or maybe all Australian production finding its way to Ukraine.
Shells for the ADF are imported from South Africa under a longstanding contract with NIOA and Rheinmetall Denel Munitions, initially awarded in 2017, well before the Ukraine conflict placed soaring pressures on western stockpiles and production capabilities.
NIOA chief executive Robert Nioa said there was a general interest in Australia in transitioning imported supply of 155mm shells to domestic supply and NIOA was keenly interested in supporting that.
“Right now, the ADF has sufficient surety of supply with our current supply arrangements,” he told journalists visiting the Rheinmetall NIOA munitions plant in Maryborough, Queensland.
“I suspect that they are quite comfortable that all of the shells from here are going to support the European war effort. I think that’s an OK balance at the moment.
“Longer term I think Australian should have a larger capacity and more sovereign control of its supply chain because we don’t know what three, four or five years from now that environment will be, particularly if we end up in a contested region.”
NIOA’s interest in domestic artillery shell manufacture emerged from its success in winning the Future Artillery Ammunition contract to supply the ADF. Artillery shells had to be imported as Australia had lost the ability to forge an in-service artillery shell.
“We thought it was an important capability to bring onshore and we put proposals to the government which ultimately we managed to get supported, through a jobs initiative for a regional growth program,” Nioa added.
That wasn’t Defence money.
Funding came from a Commonwealth regional employment program, from the Queensland State Government and from joint venture partner Rheinmetall, which holds a 51 per cent stake.
Maryborough is home to the Nioa family, where Bill Nioa started out in 1973 in a service station with a sideline in sporting guns and accessories.
Following the 1996 changes to national gun laws, Robert Nioa made a conscious decision to pursue defence opportunities. The company is now Australia’s largest privately owned defence business.
As well as the Nioa family connection, Maryborough also features a high unemployment rate, especially youth unemployment. The munitions plant has so far created 120 fulltime equivalent positions.
Construction started in March 2020 with the initial pilot production lot of 500 DM121 shells produced in August 2023. DM121 is the standard German high explosive 155mm artillery shell.
Raw material is seven metre billets of square section tool steel imported from Germany and cut into shorter lengths.
Central to the production process is an large German-made forge which presses the steel bars into basic shape, after which they are machined, heat treated and checked for quality.
Testing for quality includes testing for hardness and balance to ensue ultimate accuracy on the battlefield. Once finished, these are painted and shipped to Europe.
This is far from a complete shell, still requiring filling with explosive and addition of a fuse.
Robert Nioa says the fact that the ADF had not placed an order for Australian-made shells was not really impacting his business.
“That said I think we could collectively do more. With some additional investment we could significantly increase output and we could do more to support the combined allied - even if Australia personally does not need more right now,” he said.
However, considerable additional investment would be required for domestic production of a complete artillery shell.
“Starting at the nose we are going to need fuse production - and in a perfect world you would actually want guided fuse production. If you have a guided fuse, you will use about one tenth of the artillery than for non-guided,” he said.
“All the intellectual property is available and the willingness of industrial partners to do that in Australia. It’s just a matter of getting a demand signal from the customer, the Australian government saying they want that to occur.”
Nioa said that should probably occur at a government facility. The obvious choice would appear to be the government-owned munitions plant at Benalla, Victoria.
That’s an entirely doable and critical next step, he said. Australia would also need to increase capacity to fill artillery shells - that is to add the explosive.
“If you want to be able to make over 100,000 shells a year, you have got to be able to fill them. That’s an additional filling plant,” he said.
“You also need the type of energetics Australia wants to take to war.”
Right now, Australia can make the explosive TNT at Mulwala, NSW, thought he Australian Department of Defence prefers insensitive munitions for warshots, he said.
Insensitive munitions are designed to explode when they are supposed to, not when exposed to, for example, fire or impact from a nearby explosion or vehicle accident.
For that, there should be investment in production of more energetics particularly insensitive munitions, which would mean an upgrade to Mulwala to produce high volumes and different types.
“We actually need to invest in making double-base propellants which is going to go into the charge systems. And we need to make combustible cartridges cases to put them in,” he added.
“The double base propellant is probably an upgrade to Mulwala capacity. The last thing is making the primer…. a bottleneck in the supply chain for a number of munitions.”
Disclaimer: The writer travelled to Maryborough as a guest of NIOA.