Mitsubishi Heavy Industries lands Australia's largest naval order since AUKUS pact

Japan has finalised a historic A$10 billion (US$6.5 billion) agreement to supply advanced warships to Australia, marking Tokyo's most significant arms export since lifting its military export ban in 2014. 

Under the agreement, Mitsubishi Heavy Industries (MHI) will construct three state-of-the-art Mogami-class multi-role frigates in Japan, with deliveries scheduled to begin in 2029, Caliber.Az reports, citing foreign media.

An additional eight vessels will be assembled in Australia, in partnership with local shipbuilder Austal.

The frigates, designed for anti-submarine warfare, surface strike capabilities, and air defence, feature a high degree of automation that allows operation with only 90 crew members—half the size required for Australia's current Anzac-class ships. These new warships will be central to Australia’s efforts to protect maritime trade routes and its northern approaches in the Indian and Pacific Oceans, where China's military presence is growing.

Australian Deputy Prime Minister Richard Marles emphasised that the vessels will significantly enhance the Royal Australian Navy’s ability to project power, calling it a crucial step in meeting the country's evolving strategic needs. Defence Industry Minister Pat Conroy noted that the Mogami-class ships will quadruple the navy's air defence missile capacity—from 32 to 128—while offering greater range and combat versatility.

Beyond bolstering Australia's fleet, the deal is a strategic milestone for Japan. It signals Tokyo's intent to broaden its security cooperation beyond its traditional alliance with the United States. Analysts say the move helps cement Japan and Australia’s emerging quasi-alliance and sends a clear signal to Beijing of their deepening military collaboration.

The success of MHI’s bid marks a turnaround in bilateral defence ties. In 2016, Australia rejected a Japanese-led submarine proposal in favour of a French design, only to abandon that project in 2023 after joining the AUKUS alliance to develop nuclear-powered submarines with the US and UK.

Speaking in Tokyo, Japanese Defence Minister Gen Nakatani said the lessons of 2016 were taken seriously and credited the new agreement to the technical superiority of MHI’s proposal and the strong cooperation between the Japanese government and industry.

The initial three frigates represent the most significant Australian naval procurement since the AUKUS pact. The remaining eight ships are slated for construction by Austal in Western Australia. Following the deal announcement, MHI’s shares rose 5.7% in Tokyo, while Austal stock jumped nearly 8% amid growing confidence in its future shipbuilding workload.

MHI Chief Financial Officer Hiroshi Nishio said the company is now focused on setting up support and maintenance operations in Australia and has begun outreach to local firms. However, since the company has limited experience with managing international defense programs, Nishio noted that MHI would rely on other internal divisions to ensure the success of the project.

Before the contract is officially finalized early next year, both governments must resolve issues related to cost, long-term maintenance, and the transfer of production capabilities to Australia.

The Mogami-class frigate beat out the MEKO A-200 design from Germany’s Thyssenkrupp Marine Systems during deliberations by Australia’s national security committee.

By Tamilla Hasanova