Australia and the UK have formalised the industrial team that will build the future AUKUS nuclear-powered attack submarines (SSN) that will form the next generation of SSN capability for the Royal Australian Navy.

Announcing on 21 March the formal selection of UK defence prime BAE Systems and Australia’s ASC Pty to build Australia’s new fleet of SSNs, the deal is the latest step in the ongoing AUKUS trilateral security pact between the US, the UK, and Australia.

Australian Deputy Prime Minister, Richard Marles, and UK Defence Secretary, Grant Shapps, announced the news in Australia, marking the next step required for Australia to build and operate its own nuclear-powered submarines.

As previously outlined, under the AUKUS agreement, Australia and the UK will operate a common SSN design, based on the UK’s next generation design being led by BAE Systems, a platform once known as the SSNR.

The new AUKUS-SSN will replace the in-service Astute-class submarines in the Royal Navy, and Australia’s future Virginia-class boats, of which up to five will be acquired from the United States in the coming years.  

The UK is expecting to begin replacing its Astute class from the late 2030s, with Australia bringing online its own AUKUS-SSNs in the early 2040s. The UK’s submarines, and, potentially, early boats of Australia’s requirement, will be built at the BAE Systems submarine yards at Barrow-in-Furness.

BAE Systems and ASC Pty will ultimately establish a “long-term, incorporated joint venture” to drive the Australian AUKUS SSN requirement forward, BAE Systems stated in a release.

“We’re already making good progress on the design and development of the next generation submarine in the UK where we have more than 1,000 people working on the SSN-AUKUS programme and major infrastructure investment underway,” said BAE Systems chief executive, Charles Woodburn.

Australia invests in UK’s nuclear naval industry

In October 2023 the UK Ministry of Defence awarded BAE Systems almost £4bn ($5.7bn) for the next phase of the SSN-AUKUS programme in October 2023, covering development work through to 2028 and enabling the detailed design phase of the programme and procurement of long-lead items.

BAE Systems stated that the award is also funding “significant infrastructure investment” in Barrow, which will see the site’s facilities double in size from 80,000 to 160,000 square-metres by the late 2030s. The company has increased its UK submarines workforce to 13,500 with plans to grow to around 17,000 at its peak to support AUKUS-SSN in the UK, as well as the Astute and Dreadnought programmes.

Fellow UK defence prime Rolls-Royce also welcomed the news, stating in its own release on 21 March that work was underway to double the size of the Rolls-Royce Submarines site in Raynesway, Derby, in support of the AUKUS programme.

The Australian Government confirmed its planned investment into the UK’s nuclear infrastructure upgrade plans, with Rolls-Royce to provide all the nuclear reactor plants that will power the AUKUS-SSN boats, both in service with the UK Royal Navy and Royal Australian Navy.

UK and Australian investment into Rolls-Royce’s facilities at Raynesway will enable the company to provide nuclear reactor for both nations’ AUKUS submarines. Credit: Rolls-Royce

Rolls-Royce Submarines president Steve Carlier welcomed the funding commitment, stating that the move demonstrated the “trust Australia places on our nuclear expertise and our ability to deliver”.

In March 2023 it was confirmed that Rolls-Royce Submarines would provide all the nuclear reactor plants that will power the AUKUS-SSN as part of the tri-lateral agreement between Australia, the UK and US. Rolls-Royce is currently supporting the existing UK Astute and Dreadnought boat build programmes through the delivery of reactor plant and associated components.