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The Australian government announced on September 14, 2025, that it will spend $8 billion to upgrade shipyard facilities for its future fleet of nuclear-powered submarines.

The investment will be spread over a decade to transform the Henderson Defense Precinct near Perth, Western Australia, into a hub for shipbuilding and maintenance.

Defense Minister Richard Marles said the development is critical to supporting Australia’s military commitments under the AUKUS security pact with the United States and the United Kingdom.

“Henderson is very much an AUKUS project. It is where we will do sustainment and maintenance of our future submarines,” Marles told reporters. “I have no doubt this decision will be welcomed in the United States, as it will be welcomed in the United Kingdom, because it is another step down the AUKUS path.”

Strengthening Long-Range Strike Capabilities

The shipyard expansion is part of a broader military restructuring designed to enhance Australia’s long-range strike capabilities amid China’s growing military presence in the Pacific.

Australia plans to acquire at least three U.S.-made Virginia-class submarines within 15 years and eventually manufacture its own AUKUS-class submarines in partnership with the U.S. and UK. Currently, the country has no infrastructure to service nuclear-powered submarines, making the Henderson project a priority.

Marles emphasized that the decision was based on Australia’s assessment of the “strategic landscape” and the defense force it requires “to meet that moment.”

The government said Henderson will be fitted with high-security dry docks capable of maintaining nuclear-powered submarines. It will also include facilities for building landing craft and eventually Japanese-designed Mogami-class frigates.

The U.S. is also expected to use Henderson for maintenance of its own submarines when operating in the region. Total costs for developing the precinct could eventually reach $17 billion, officials said.

Expanding the Naval Fleet with Frigates

The shipyard announcement follows several other large-scale defense projects. In August, Canberra confirmed it would acquire 11 Mogami-class frigates from Japan’s Mitsubishi Heavy Industries in a deal worth $6.7 billion over the next decade.

The first three frigates will be built overseas, with the remainder to be produced in Western Australia. The frigates are expected to help Australia expand its major warship fleet from 11 to 26 over the next ten years.

In addition to the submarine and frigate programs, Australia recently unveiled plans to deploy a fleet of underwater attack drones known as “Ghost Sharks.” The program, valued at $1.1 billion, is expected to deliver its first operational drones in January.

The AUKUS submarine program is the centerpiece of Australia’s defense strategy, though questions have been raised about its cost and feasibility. Estimates suggest the program could reach $157 billion over 30 years.

Some U.S. critics have warned that Washington may not be able to supply enough submarines for both its own navy and Australia’s fleet. President Donald Trump’s administration is currently reviewing the pact to ensure it aligns with his “America First agenda.”

Despite these concerns, Canberra remains confident in AUKUS. The Washington Post reported that U.S. Secretary of State Marco Rubio privately assured Marles earlier this month that the agreement would continue.

Marles declined to comment on that report but told the national broadcaster that in all his discussions with U.S. officials, “there has been an enormous sense of positivity about the role that AUKUS can play for the United States.”

Additional defense spending commitments

The government said that since May 2022, it has committed an additional $47 billion in defense spending over the next decade, including the new shipyard investment. Officials said the Henderson project will not only strengthen Australia’s naval capabilities but also create thousands of local jobs.

“This is about being able to sustain and maintain Australia’s future submarines, but it is very much a facility that is being built in the context of AUKUS,” Marles said in a separate interview. “I would expect that in the future this would be available to the U.S.”

The AUKUS pact, signed in 2021, is a cornerstone of Australia’s defense strategy and a symbol of its deepening security ties with the U.S. and UK. It commits the three nations to collaboration on advanced defense technologies, including nuclear-powered submarines, artificial intelligence, and cyber warfare.

Under the agreement, the U.S. will supply Virginia-class submarines to Australia beginning in the next decade. Britain and Australia will also co-develop a new class of submarines specifically designed under AUKUS.

While critics continue to debate its cost and sustainability, Australia’s government maintains that the submarine program, along with expanded naval shipbuilding, will be central to safeguarding its national security in an increasingly contested Indo-Pacific region.