The refreshed approach will see Defence "enter into collaborative negotiations early this year with Australian company NIOA to establish a second long-term tenancy alongside Thales Australia trading as Australian Munitions".
Once the agreement is put in place, the addition of NIOA is expected to deliver up to 100 "new highly sophisticated, advanced manufacturing jobs" over the next 10 years.
“This will be the first time since the facility was established in the early 1990s that other munitions manufacturers will operate at Benalla, bringing the facility into line with international best practice, creating jobs in regional Victoria, delivering better utilisation of the facilities and launching a new era for ammunition manufacture for the ADF and for export opportunities,” said Minister Pyne.
“The expected long-term tenancy at Benalla from July 1, 2020 will be further discussed in parallel with negotiations already underway between the Commonwealth and Thales to continue their current responsibilities at Benalla munitions facility.”
Defence said the new approach will "deliver better outcomes for Defence and Australian defence industry" and will see NIOA build on its experience in the supply of ammunition to the Australian Defence Force, as well as helping the company develop partnerships with other leading munitions companies.
“The NIOA tenancy will strengthen and diversify sovereign capability while also ensuring increased use of the government factories at Benalla, providing more munitions supply options for Defence,” Minister Pyne said.
“I look forward to NIOA producing and exporting munitions from Benalla to our friends and allies.
“This announcement will provide increased security of employment for the staff at the government factories at Benalla and ensure the facilities’ ongoing financial viability for the next generation.”
Minister Pyne also said that Defence has identified munitions and small arms research, design, development and manufacture as a sovereign industrial capability priority.