Australia awards Rheinmetall $77.2M contract for artillery ammunition

March 21 (UPI) -- The Australian government has awarded Rheinmetall of Germany a a contract worth roughly $77 million to supply ammunition, fuses and propelling charges.

The order is part of the Land 17 Phase 1C.2 Future Artillery Ammunition project and includes options for additional five-year periods. The first lots will be shipped this year, with a second delivery scheduled for 2019. In addition, Australia will also receive war reserve stocks of the ammunition.

In a company release Tuesday, Rheinmetall said the order represents a significant success for Rheinmetall and its Assegai ammunition.

"It will enable the group to establish itself in coming years as Australia's sole supplier of artillery ammunition," the company said. "In addition, it is the first time a M777A2 field howitzer user nation has opted for the Assegai family."

The Canadian and United States armed forces are among countries that also deploy the M777A2.

Rheinmetall's partner NIOA, headquartered in Brisbane, Australia, will supply the ammunition.

NIOA is the largest supplier of ammunition and weapons systems to Australia's military and law enforcement agencies.

Last week, the Australian government announced a $3.3 billion contract to purchase Rheinmetall's Boxer multipurpose wheeled armored vehicles under Australia's Land400 Phase 2 program. A total of 211 Combat Reconnaissance Vehicles are to be built for the Australian military, with first delivery in 2020.