The government has signed a $72 million deal with Rheinmetall Nioa Munitions to stand up a new capability for forging 155mm shells at its plant in Maryborough, Queensland.
That supplants an earlier deal with defence company Thales to produce 155mm shells at its plant in Benalla, Victoria, announced in October 2024 then cancelled last September.
Defence Minister Richard Marles said the new forging capability for 155mm M795 projectiles would be established at the contractor owned, contractor operated forge in Maryborough, Queensland.
It will begin operating by the end of 2028 and is expected to produce an initial 15,000 rounds a year, with the capacity to scale up to higher volumes.
“The 155mm M795 projectiles manufactured at this facility will directly support the ADF, for use in military platforms including in the M777A2 Lightweight Towed Howitzer and the AS9 Huntsman self-propelled howitzer,” the Defence Minister said.
Minister Marles said this announcement meant that by the end of 2028, Australia would have two large shell calibre forging capabilities, ensuring a sovereign, reliable and modern manufacturing capability supporting Australian-made products for the ADF and providing export opportunities to international partners.
“Domestic forging also ensures Australia has control of the supply chain and will always have access to forged projectiles, reducing lead times and better equipping the ADF in times of conflict, in line with the 2026 National Defence Strategy and Integrated Investment Program’s focus on resilience and self-reliance,” he said.
The government also announced a $9.2 million investment in Thales Australia to modernise and refurbish the existing naval five-inch shell production line at Benalla.
Nioa chief executive officer Robert Nioa welcomed the decision.
He said the forge at Maryborough, a joint venture between Nioa and German defence giant Rheinmetall would be the first outside North America to manufacture the M795 ammunition.
It would be capable of producing an initial 15,000 rounds each year by 2028 with a surge capacity of 100,000.
“The factory is the most advanced of its kind in the world, using the latest technology to perform high tonnage forging operations, precision machining, nosing, heat treating, welding, phosphating and painting,” he said.
“Australia now has a true sovereign industrial capability for a critical munition, made right here in Maryborough, supporting the Australian Defence Force as well as allied supply chains.”
Currently, the ADF sources 155mm artillery shells from South Africa under a longstanding contract with Nioa and Rheinmetall Denel Munitions, initially awarded in 2017.
That spurred Nioa’s interest in standing up a sovereign shell manufacturing capability and the joint venture with Rheinmetall.
Construction of the plant at Maryborough started in March 2020, with the initial pilot production lot of 500 DM121 shells produced in August 2023.
The raw material comprises seven-metre billets of square section tool steel imported from Germany and cut into shorter lengths.
Central to the production process is an enormous German-made forge which presses the steel bars into basic shape, after which they are machined, heat treated and checked for quality.
Production now runs at 3000 per month.
DM121 is the standard German high explosive 155mm artillery shell. All Maryborough’s production was exported to Germany where shells were filled with explosives, fitted with fuses and then dispatched to Ukraine.
The DM121 is slightly different from the M795, the US standard 155mm artillery shell. The DM121 is a bit lighter and has longer range, though with the near identical explosive charges.
Nioa pitched for the Australian defence shell production deal but lost out to Thales.
Nioa said the government’s investment was a major vote of confidence in his team and regional manufacturing.
“With the government’s support, we’re expanding our production capacity, creating new local jobs and skills that stay in the community,” he said.
A spokesperson for Nioa said the M795 operation used the same primary forge that was already in operation in Maryborough.
"The forge can produce a wide variety of 155mm projectiles. We will also be adding some additional post forging equipment that is specific to the M795 shell and will potentially support additional US natures of ammunition," he said