BlueScope steel will be used to build one of Australia’s new naval ships, the country’s defence department has revealed.
The steel, produced at BlueScope’s Port Kembla steelworks, will be sent to Spain by the end of the year.
Spanish shipbuilding company Navantia, which was last year awarded the contract to build two replacement replenishment ships, had flagged the potential use of Australian-made steel.
Confirmation came during a Senate estimates hearing of the foreign affairs, defence and trade legislation committee this week.
Peter Croser, director general of specialist ships acquisition with the Department of Defence, told the hearing the Spanish shipbuilder had been in discussions with BlueScope Steel.
“Navantia have this month confirmed that they have raised a letter of commitment to BlueScope Steel for the supply of 4500 tonnes of Australian steel in raw form, to be supplied to Navantia in Spain,” Mr Croser said.
The win for BlueScope was revealed in response to a question about a Navantia contract with an Australian steelmaker.
Labor Senator Kim Carr, the party’s industry spokesman, also asked when the contract would be filled.
Mr Croser said the contract would be signed by mid-year, but stressed Navantia’s letter was a “commitment to contract”.
BlueScope’s 4500 tonnes would only form part of the steel used to build one of the two new ships.
“It’s not a complete vessel, there are some forms of steel we can’t manufacture in Australia,” Mr Croser said.
The first ship is being built using European steel from Navantia’s usual mill.
The hearing also heard there had been a delay in ship production, with the process adjusted to “take into account the use of Australian steel”, Mr Croser said.
Both ships would typically be built side-by-side, but Navantia was due to start cutting steel for the first ship in mid-June, he said.
Cutting for the second ship, using BlueScope steel, would follow, with the build to start in 2018.
“They [BlueScope] are intending to supply the steel by the end of the year, to be transported to Spain,” Mr Croser said.
“After that there’s some post-processing that has to occur, a blast and paint, in preparations for cutting in the first quarter of next year.”
The country’s current supply ships – HMAS Success and HMAS Sirius – are being replaced with a single class of Auxiliary Oiler Replenishment ship.