*

Australia to establish domestic manufacture of artillery

ammunition and guided rocket systems

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Partnerships with Thales and Lockheed Martin ( LMT ) to boost

weapons

stockpiles and exports

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Australia's missile defense and long-range strike

capability

enhanced amid US-China competition

By Kirsty Needham

SYDNEY, Oct 30 (Reuters) - Australia said it will

establish domestic manufacture of artillery ammunition with

France's Thales, and guided rocket systems with

Lockheed Martin ( LMT ), to boost its weapons stockpiles and

export to security partners including the United States.

Minister for Defence Industry Pat Conroy said in a speech on

Wednesday that Australia was boosting its missile defence and

long-range strike capability.

"Why do we need more missiles? Strategic competition between

the United States and China is a primary feature of Australia's

security environment," he told the National Press Club in

Canberra.

China test fired an Intercontinental Ballistic Missile in

September that travelled over 11,000km to land in the Pacific

Ocean to Australia's north-east.

Conroy did not mention the Chinese test in his speech, but

said the Indo Pacific was on the cusp of a new missile age,

where missiles are also "tools of coercion".

"They pose a threat night and day, regardless of when or

whether they are actually launched," he said.

Australia has previously said it would spend A$74 billion

($49 billion) on missile acquisition and missile defence over

the next decade, including A$21 billion to fund the Australian

Guided Weapons and Explosive Ordnance Enterprise, a new domestic

manufacturing capability.

"We must show potential adversaries that hostile acts

against Australia would not succeed and could not be sustained

if conflict were protracted," Conroy said in the speech.

Australia will spend A$316 million to establish local

manufacture of Guided Multiple Launch Rocket Systems (GMLRS), in

partnership with Lockheed Martin ( LMT ), to produce the rapidly

deployable, surface-to-surface weapons for export, from 2029.

The factory will be capable of producing 4,000 GMLRS a year,

or a quarter of current global production, Conroy said.

France's Thales will establish Australian

manufacturing of 155mm M795 artillery ammunition, used in

howitzers, at an Australian government-owned munitions facility

in the small Victorian city of Benalla.

It will be the first dedicated forge outside of the U.S.,

with production starting in 2028, and the capacity to scale up

to produce 100,000 rounds a year.

The war in Ukraine was using 10,000 rounds of 155-millimetre

artillery shells a day last year, outstripping European

production, he said.

"In a world marked by supply chain disruption and strategic

fragility, Australia needs not only to acquire more missiles,

but to make more here at home," he said.

In August, Australia said it would jointly manufacture

long-range Naval Strike Missiles and Joint Strike Missiles with

Norway's Kongsberg Defence in the city of Newcastle on

Australia's eastern coast, the only site outside of Norway.

Earlier this month, Australia announced a A$7 billion deal

with the United States to acquire SM-2 IIIC and Raytheon

SM-6 long-range missiles for its navy.

Australia's navy will also have Tomahawk missiles, with a

range of 2,500 km (1,550 miles), by the end of the year,

increasing the fleet's weapons range 10-fold.

($1 = 1.5228 Australian dollars)

(Reporting by Kirsty Needham; Editing by Lincoln Feast.)