Mitsubishi Heavy Industries (MHI) has emerged as the preferred bidder to build a new fleet of Australian frigates, marking a historic breakthrough for Japan’s defence industry and its first-ever warship export deal. The announcement, reported by the Financial Times, signifies a major shift in regional defence ties amid growing Indo-Pacific tensions.
The initial phase of the contract, valued at up to A$10 billion (US$6.5 billion), will see MHI supply up to 11 general-purpose frigates, with the first ships to be delivered by 2029. A formal agreement is expected to be signed in 2026, according to the Australian government.
Australia’s defence minister and deputy prime minister, Richard Marles, described the deal as “a big moment” in bilateral relations. “We have a strong strategic alignment,” he said, citing MHI’s ability to meet Australia’s operational needs as a key factor in the decision.
The order is part of a sweeping upgrade to Australia’s defence capabilities, which also includes the Aukus agreement with the US and UK to deliver nuclear-powered submarines, and the domestic construction of Hunter-class frigates in Adelaide.
MHI’s proposal, an enhanced version of its Mogami-class frigate, beat out German rival Thyssenkrupp Marine Systems in a competitive bidding process that also included entrants from South Korea and Spain. While Japan’s offer had faced concerns over higher upfront costs and limited experience in overseas shipbuilding, Australian defence procurement minister Pat Conroy said MHI’s bid was “the clear winner” in terms of cost, capability, and delivery schedule.
According to Conroy, the Mogami design offers long-term savings due to reduced crew requirements, lower armament costs, and greater hull longevity. The first three ships will be constructed in Japan, with the remaining eight to be built in Western Australia by Austal, an Australian shipbuilding company. A new entity under Austal’s ownership has been established to manage the local production, with the Australian government holding a sovereign preference share.
The deal also signals a deepening of strategic and defence cooperation between Canberra and Tokyo, with Japan’s role in global arms exports steadily evolving since postwar restrictions were relaxed in 2014.
The Financial Times noted that the decision also carried broader geopolitical implications, with the final choice seen as a tilt toward stronger defence ties with Japan. Germany’s Thyssenkrupp, whose naval designs are already present in Australia’s fleet, had been considered the more conventional option.
MHI’s win positions Japan as a more prominent player in the global defence landscape and could pave the way for further international contracts as the country continues to reorient its security posture in response to regional threats.
