Australia is making waves in the Indo-Pacific with a landmark decision to invest A$12 billion (US$8 billion) in a sweeping overhaul of the Henderson shipyard near Perth, Western Australia. The move, announced on September 14, 2025, aims to transform the facility into a state-of-the-art maintenance and sustainment hub for nuclear-powered submarines under the AUKUS security alliance—a pact forged in 2021 with the United Kingdom and the United States. This investment marks the most significant defense infrastructure upgrade in Australia’s recent history, signaling the nation’s deepening commitment to regional security and its evolving role among Western allies.
According to Reuters, the Australian government’s plan will see US and UK submarines rotating through Henderson even before Australia takes delivery of its own Virginia-class nuclear-powered submarines, expected from the next decade. The project is not just about acquiring new military hardware. As Australian Defence Minister Richard Marles put it, “Henderson is a key piece of the AUKUS story... But this is about what Australia needs to do in order to meet its strategic moment.” Marles’s remarks, reported by Sky News, underscore the urgency behind the investment, which is designed to counter China’s growing naval presence in the Indo-Pacific region.
Australia’s ambitions go far beyond simply hosting allied submarines. The upgrade will create high-security dry docks to service nuclear-powered vessels—a first for the country, which currently lacks such infrastructure. The shipyard will also be equipped to build new landing craft for the Australian army and general-purpose frigates for the navy, including Japanese Mogami-class stealth frigates. As France 24 highlights, the project is expected to support around 10,000 local jobs, offering a major boost to the Western Australian economy and the broader national workforce.
But the implications stretch well past economics and job creation. The AUKUS pact, worth hundreds of billions of dollars, represents a foundational shift in regional deterrence. As reported by DW, the agreement will see Australia purchase several Virginia-class submarines from the US and, in partnership with the UK, eventually build a new AUKUS-class submarine. The overhaul of Henderson is central to making this vision a reality, turning Western Australia into a strategic maintenance and logistics hub for Western nuclear submarines in the Indo-Pacific.
Prime Minister Anthony Albanese emphasized the broader benefits of the project for Australia’s allies. “This will provide for a significant benefit for our allies, which is part of the AUKUS arrangement,” he said at a press conference in Perth, according to Reuters. The shipyard’s new capabilities are expected to enhance interoperability among AUKUS partners and strengthen collective deterrence through shared infrastructure. Before Australia’s own submarines arrive, the facility will host a rotation of US and UK vessels, increasing the Western naval presence near key Indo-Pacific sea lanes.
The timing of Australia’s announcement is notable. The US is currently conducting a formal review of the AUKUS agreement, led by Pentagon official Elbridge Colby, a known critic of the pact. President Donald Trump’s administration is scrutinizing the arrangement to ensure it aligns with the “America First” agenda. Some US critics have expressed concerns about the country’s capacity to supply both its own navy and Australia with nuclear-powered submarines. Yet, as France 24 reports, Australian officials remain confident. Marles told the Australian Broadcasting Corporation that in all his discussions with the Trump administration, “there has been an enormous sense of positivity about the role that AUKUS can play for the United States.”
Indeed, the Australian government has demonstrated its belief in the pact’s longevity through continued investment. Since May 2022, Canberra has committed an additional A$70 billion in defense spending over the next decade, including the latest shipyard upgrade. The total cost to develop the Henderson Defence Precinct could eventually reach A$25 billion, according to government estimates. The AUKUS submarine program itself could cost up to US$235 billion over 30 years—a staggering sum that reflects the scale of Australia’s strategic ambitions.
While the political landscape in the US remains fluid, bipartisan support for AUKUS has been evident. The Republican and Democratic heads of a US congressional committee for strategic competition with China expressed strong backing for the pact in July. Marles, after a recent visit to Washington, said he remained “really confident about the proceeding of AUKUS under the Trump administration,” citing positive sentiments during meetings with US Secretary of Defense Pete Hegseth and other officials.
The investment in Henderson is also part of a broader military restructuring aimed at improving Australia’s long-range strike capabilities. In August, the government announced plans to acquire 11 Mogami-class frigates built by Japan’s Mitsubishi Heavy Industries, aiming to expand its fleet of major warships from 11 to 26 over the next decade. The first three frigates will be built overseas, but Australia hopes to produce the rest domestically. Additionally, a new fleet of “Ghost Shark” underwater attack drones is set to enter service in January, further enhancing the country’s maritime security posture.
Despite the optimism in Canberra and among many Western policymakers, the expansion of Henderson is not without controversy. China is likely to perceive the upgraded base as a move to contain its ambitions, potentially escalating naval competition in the region. The success of AUKUS will depend on sustained funding, technological transfer, and ongoing geopolitical alignment among the three nations. Any wavering in commitment—especially from Washington—could complicate the project’s long-term prospects.
For now, Australia is pressing ahead with determination. The initial investment of A$127 million last year to begin upgrades at Henderson has already paved the way for this larger commitment. The government’s plans are ambitious, but officials are adamant that they are necessary to meet the challenges of a rapidly changing strategic environment. As Marles told ABC, “This is about being able to sustain and maintain Australia’s future submarines but it is very much a facility that is being built in the context of AUKUS. I would expect that in the future this would be available to the US.”
In the coming years, as US and UK submarines begin to rotate through Henderson and Australia’s own fleet takes shape, the shipyard will stand as a tangible symbol of the nation’s commitment to its allies and its readiness to confront new security challenges head-on.
