Richard Marles found out the US greenlit South Korean companies to build submarines on US soil via a Trump social media post, as an update on Hanwha's bid to increase its Austal stake continues to be delayed.
Richard Marles says he found out the US had greenlit South Korean companies to build nuclear submarines on US soil via a social media post by Donald Trump, as an update on the decision for Hanwha to increase its stake in Austal continues to be delayed.
Speaking on the ABC today, Mr Marles said he learnt of the deal when it was announced publicly by Donald Trump on his Truth Social page last week.
He went on to say he had 'absolute confidence' the arrangement with South Korea would not impact the AUKUS agreement.
"We are supportive of America building capability with its allies, and that very much includes South Korea," he said.
"And you know, we have a very close relationship with the Korean government, as we do with the US government.
"I think what's really key, and we spoke about this with my American counterpart, Secretary Hegseth, all that the milestones that we are seeking to meet in terms of increasing American rates of production and sustain, in other words, more sea days for the US Virginia class fleet, all of that will continue, all of that will be met."
Asked whether there had been discussions with South Korean stakeholders on the potential for HMAS Stirling to be used to service the nation's submarines, Mr Marles said there hadn't.
"Oh it's a very early stage in terms of the relationship between the US and Korea and so, there's not been any conversations about that," he said.
"We're very focused on delivering AUKUS. We're very focused, as you've heard... on meeting the deadline for having the Submarine Rotation Force-West ready to receive American nuclear-powered submarines, Virginia class submarines at the end of 2027 and we're very much on track for that.
"You know, we're focused on the task ahead. It is a massive task for our nation, and we are meeting all of those milestones, and we're very confident about being able to achieve this great national endeavour."
Treasurer Jim Chalmers and the Foreign Investment Review board continue to drag their feet on Hanwha's application to increase its stake in WA shipbuilder Austal from 9.9 per cent to 19.9 per cent - a decision Dr Chalmers previously said would be made in September.
It comes after Austal shareholders, at the company's annual general meeting last week, voiced frustration over the delayed decision.
While the record forward guidance had shareholders grinning, concerns were raised about not only the ongoing delay to the FIRB approval, but also the broader implication of Hanwha's increasing ownership.
Austal chief executive Paddy Gregg shared investor frustration when addressing questions at the AGM.
"We are not privy to any more information than you. We saw the Treasurer make a commitment to make a decision in September, and we saw September come and go," he said.
"So no, we don't have any insights. We've asked Defence if they can give us any insight into timescales or the decision.
"The answer is, we'll find out when everyone else finds out - when the Treasurer makes a decision."
Austal chair Richard Spencer also weighed in on the potential ownership increase.
"From the minute they announced their investment in Austal, Paddy and I sat down and met with the president of Hanwha, who kept promoting the fact that he was after a partnership, we asked him to present us the value add that it will bring," he said.
"To day, we have still not received one document supporting the value add... And I want shareholders to know we are working for the value of the shareholders.
"We will explore everything we can. In the case of Hanwha, we have heard nothing."
Hanwha claims the US equivalent of the FIRB - the Committee on Foreign Investment in the United States - granted it clearance to increase its shareholding in Austal up to 100 per cent in June.
Austal disputes this claim however, and has subsequently sought independent verification of the CFIUS decision.
It's understood that verification has not yet been received.
It comes after the Australian government was issued a single sovereign share in a new Austal subsidiary in a move designed to protect the country's strategic interests should control of the group change.
Austal Defence Shipbuilding Australia was established as the government’s strategic shipbuilder after parent company Austal Limited finalised its strategic shipbuilding agreement (SSA) with the Commonwealth of Australia.
Under the SSA, Austal Defence Australia will be the prime contractor for the delivery of new vessels, starting with 18 medium landing craft, eight heavy landing craft and likely to be followed by eight frigates, all to be built at Henderson.
The Commonwealth will be issued a single sovereign share in Austal Defence Australia to “protect its interest in continuous shipbuilding and to preserve its right to ensure Austal Defence Australia continues to deliver Commonwealth programs”.
The Commonwealth will also hold a call option giving it the right to buy all shares in Austal Defence Australia plus Austal’s Henderson shipyard and associated assets for ‘fair market value’.
It can do this if a third party buys more than 20 per cent of Austal Limited, either directly or through a ‘synthetic’ interest.
