Spanish yard Navantia has won an AUD 640m ($472m) order to build two navy re-supply ships for Australia.

The shipbuilder beat DSME of Korea to the contract for auxiliary oiler and replenishment (AOR) vessels.

A current supply ship, HMAS Success, was launched in 2021 and will be retired in 2021.

The 19,500-tonne replacements will combine tanker and supply ship elements.

The contract stipulates that AUD 130m of the deal will involve local industry for combat, communication systems and cranes.

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