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Australia gives UK $4.6b to boost AUKUS subs build

Australia will spend more than $4.6 billion on a submarine nuclear reactor factory in the United Kingdom to ensure its new nuclear-powered fleet arrives on time.

The 10-year deal will boost capacity at the Rolls-Royce factory in Derby and bankroll the design costs of the boats that Australia will build.

Defence Minister Richard Marles confirmed that BAE Systems, which will also deliver the navy's new Hunter class frigate fleet, will build the submarines at the Osborne shipyard in Adelaide.

He made the announcement alongside his UK counterpart Grant Shapps on Friday.

At least $2 billion has already been allocated to build a submarine construction yard at Osborne and at least $30 billion will go toward propping up Australia's industrial base over the next three decades.

The submarines will be built in Adelaide but the nuclear reactors used for their propulsion will be built by Rolls-Royce in the UK.

The submarines will be constructed from a UK design with input from the AUKUS nations and will have a US weapons system embedded.

Mr Marles said he remains confident the Virginia Class submarines will be ready by the early 2040s after visiting the Derby facility in 2023.

He defended the transfer of billions of Australian taxpayer dollars to UK industry, saying the bulk of the economic uplift of the complicated program would be seen at home.

"Indeed, we expect to spend about $30 billion through to the mid-2050s in terms of building our industrial base in this country and a very significant proportion of that will be happening right here in Adelaide," Mr Marles told reporters.

Officials under submarine
The Australian Submarine Corporation will work with American and British firms. (Matt Turner/AAP PHOTOS)

Australian Submarine Corporation will work with American and British firms to bolster its ability to sustain and operate nuclear-powered submarines.

The Australian government-owned builder said it is confident in its ability to maintain the nuclear fleet after successfully growing a workforce to sustain the conventional Collins Class fleet currently in service.

Australia will acquire at least three US nuclear submarines from the early 2030s under the agreement which includes the UK and US.

Mr Shapps said AUKUS was fundamentally about securing freedom of navigation in an increasingly dangerous world and in a region that includes an increasingly belligerent China

"It's about ensuring that the world's oceans are capable of being sailed freely, as they should be, including here in the Indo-Pacific, including in the South China Sea," he said.

Penny Wong, David Cameron, Richar Mares and Grant Shapps
Australian, British and US counterparts met for two-two talks as part of AUKMIN. (Matt Turner/AAP PHOTOS)

Mr Marles and Mr Shapps were in Adelaide for a two-on-two meeting alongside Foreign Affairs Minister Penny Wong and UK Foreign Secretary David Cameron as part of an annual AUKMIN gathering, where they pledged to deepen military cooperation.

In a joint statement, the ministers stressed the need for the countries to work together to reaffirm their support for Ukraine, protect human rights around the world and help bring an end to conflict in the Middle East.

"As two like-minded countries, we should be fighting back against that roll-back of rights, but above all, in the dangerous and uncertain and difficult world that we live in today, focusing on our mutual security," Mr Cameron said.

"It is a time where friends and partners need to work even more closely together than the alliances we have, and that is certainly the case with Britain and Australia."

Opposition leader Peter Dutton lauded the submarine deal and the AUKUS alliance, which was formed under the Morrison coalition government.

"It's a great thing that the government has committed to undertaking AUKUS ... it will underpin our security for generations to come," he told Today.

Greens Senator David Shoebridge was less congratulatory, arguing AUKUS was "bleeding Australian taxpayers dry".

"Remarkably, we have an Australian government celebrating sending some $5 billion of Australian taxpayers' money to the United Kingdom to prop up their failing nuclear industry," he told reporters.

"This is on top of $4.7 billion the Albanese government has already committed to the United States to prop up their nuclear submarine industry."