Australia to invest $8 billion in nuclear submarine shipyard

SYDNEY (Reuters) -Australia said on Saturday it would spend A$12 billion ($8 billion) to establish defence facilities in Western Australia to help deliver submarines under the AUKUS nuclear submarine deal.

The AUKUS pact, agreed upon by Australia, Britain and the U.S. in 2021, aims to provide Australia with nuclear-powered attack submarines from the next decade to counter China's ambitions in the Indo-Pacific region. President Donald Trump's administration is undertaking a formal review of the pact.

Defence Minister Richard Marles said the planned precinct was "critical to Australia’s shipbuilding and sustainment industry while supporting continuous naval shipbuilding in Western Australia and Australia’s nuclear-powered submarine pathway".

The centre-left Labor government continues "to increase defence spending to record levels to deliver the capabilities Australia needs", Marles said in a statement.

It made an initial investment of A$127 million ($84 million) last year to upgrade facilities at the Henderson shipyard near Perth, saying billions of dollars would be spent over the next 20 years to transform it into the maintenance hub for its AUKUS submarine fleet.

The precinct will also build the new landing craft for the Australian army and the new general-purpose frigates for the navy, supporting around 10,000 local jobs, the government has said.

Under AUKUS - worth hundreds of billions of dollars - Washington will sell several Virginia-class nuclear-powered submarines to Australia, while Britain and Australia will later build a new AUKUS-class submarine.

The Republican and Democratic heads of a U.S. congressional committee for strategic competition with China in July stressed their strong support for AUKUS, amid the review of the deal by Elbridge Colby, a top Pentagon policy official and public critic of the pact.

Australia, which the same month signed a treaty with Britain to bolster cooperation over the next 50 years on AUKUS, has maintained it is confident the pact will proceed.

($1 = 1.5044 Australian dollars)

(Reporting by Sam McKeith in Sydney; Editing by William Mallard)