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Austal tacks to steel as part of ‘transformational’ US defence deal

Austal boss David Singleton says a new agreement with the US Department of Defence is transformational for the ASX-listed shipbuilder, opening up a vast area of work as it develops steel shipbuilding capabilities for the first time.

The spending, part of the US stimulus response to COVID-19, includes $US50 million ($73 million) from the Department of Defence which is likely to be matched by Austal.

Austal will develop steel shipbuilding capability in the US thanks to a large investment from the US government.

Austal will develop steel shipbuilding capability in the US thanks to a large investment from the US government.

The cash will be used to construct and equip new build sheds at the company’s Mobile, Alabama shipyards. Steel ships are much heavier than aluminium vessels, so the sheds will have heavier cranes and stronger floors capable of carrying greater weight. Austal will also need to construct paint and blast facilities because steel ships, unlike aluminium vessels, are painted.

“It’s transformational for us as a group. We’ve spent 30 years fundamentally building aluminium ships. Our future both here in Australasia and in the United States will include steel ships. I’m sure of that and that opens up the market for a much broader set of programs than we currently have access to,” Mr Singleton told The Age and The Sydney Morning Herald.

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