Berlin orders €4 billion of tank munitions from Rheinmetall

Rheinmetall has received a munitions order worth up to €4 billion from the German government as the country rushes to shore up diminishing inventories to supply Ukraine with military equipment.

Germany’s largest defence contractor on July 13 said that an existing agreement worth more than €550 million for 120 million tank ammunition, including the type fired by the main gun of the Leopard 2 tank, had been expanded “to close gaps that have arisen in the stocks [of the German military]," Financial Times reports.

“The framework contract also provides for the supply of a significant amount of tank ammunition for the Ukrainian Armed Forces,” the company said, adding that the Bundeswehr (German federal army) had retrieved an initial round of ammunition worth €309 million “as soon as the contract was signed”.

Rheinmetall said that the order would “secure ammunition supply in the long term” not only for the Bundeswehr but also “partner countries . . . as production processes can be planned better and existing capacities can be optimally exploited”.

The deal is the latest in a series of orders the company has unveiled recently. Earlier this week, the company announced an order of assault vehicles from Germany and the Netherlands worth €1.9 billion.

It followed a deal worth €285 million for military trucks two weeks ago. The company has been a leading beneficiary of the surge in defence spending by German and allied governments as they rush to increase and modernise defence capabilities after Russia’s invasion of Ukraine.

As recently as last year the Düsseldorf-based company had been struggling to finance some of its projects.

However, anticipation of increased government defence spending and the spate of new orders have boosted Rheinmetall’s share price, which has soared more than 150 per cent in the past 18 months.

Germany last year allocated €100 billion to a new special military fund, when chancellor Olaf Scholz unveiled a historic change for the country to play a more active role in Europe’s defence strategy. Rheinmetall said the latest deal included multipurpose programmable ammunition, increasing the effectiveness of the artillery.

The order also includes various types of training ammunition that have a reduced range and offer price advantages, but otherwise have comparable ballistic properties, said the company.