Thales to supply strategic munitions to the ADF. Credit: CPL Craig Barrett / © Commonwealth of Australia, Department of Defence.

Thales has signed a long-term contract with the Australian Government for the production and supply of strategic munitions.

The ten-year Strategic Domestic Munitions Manufacturing (SDMM) contract is worth A$1bn ($686.7m).

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Under the contract, the Australian manufacturing industry will provide the required supplies for the Australian Defence Force (ADF).

Further, it will generate hundreds of jobs opportunities in regional New South Wales and Victoria.

The long-term partnership will ensure the development of Australia’s Sovereign Industrial Capability in munitions and small arms.

Thales Land and Air Systems executive vice-president Christophe Salomon said: “Everything is about trust. Especially when it comes to Defence. This historic contract with the Australian Government builds on our trusted partnership with Defence for the long term supply of essential equipment.”

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Last year, Thales invested A$113m ($77.6m) with its Australian suppliers for munitions and small arms that provided 414 direct jobs.

Over the next decade, Thales’ share is expected to be valued at A$450m ($309m) in export and other non-ADF contracts.

Additionally, Thales has invested A$20m ($13.7m) in research and development and A$25m ($17.1m) in capital infrastructure at the Benalla and Mulwala facilities in the last decade.

Thales Australia Chris Jenkins CEO said: “We have worked closely with Defence to manufacture munitions for more than 20 years, using our deep technical expertise to provide urgently required munitions to the Australian Defence Force whilst on operations.”

In February this year, Thales and defence company MKU agreed to co-develop the ELFIE night vision device (NVD) for armed forces in India and the world.