Australia to invest billions of dollars in nuclear submarine shipyard

SYDNEY (Reuters) - Australia said on Wednesday it would invest billions of dollars over the next two decades to expand a shipyard in Western Australia that would become the maintenance hub for its nuclear-powered AUKUS submarine fleet.

The government will make an initial investment of A$127 million ($85 million) over three years to upgrade facilities at the Henderson shipyard near Perth, Defence Minister Richard Marles said in a statement.

"The Defence Precinct at Henderson will optimise Australia's shipbuilding and sustainment industry while supporting continuous naval shipbuilding in Western Australia and Australia's nuclear-powered submarine pathway," Marles said.

The facility will also build the new landing craft for the Australian army and the new general-purpose frigates for the navy, he said.

The shipyard "will underpin tens of billions of dollars of investment in defence capabilities" over the next 20 years and create about 10,000 local jobs, Marles said.

The AUKUS defence pact signed in 2021 between Australia, Britain and the U.S. will see Australia buy up to five nuclear-powered submarines from Washington in the early 2030s before jointly building and operating a new class, SSN-AUKUS, with Britain, roughly a decade later.

AUKUS will be the first time Washington has shared nuclear-propulsion technology since it did so with Britain in the 1950s though the submarines would not be nuclear armed. The deal is expected to cost Australia up to about A$368 billion ($245.8 billion) by 2055, according to government estimates.

($1 = 1.4975 Australian dollars)

(Reporting by Renju Jose in Sydney; Editing by Raju Gopalakrishnan)