The $263 million contract for the redevelopment of the Commonwealth’s propellant manufacturing facility at Mulwala, NSW, is now in the design phase and construction is due to commence in May 2008.

However, a decision has been taken to expand the propellant production capacity of the modernised facility from 360 to 530 tonnes per annum (single shift) and from 530 to a minimum 800 tonnes per annum (surge capacity). The cost of this increase in production capacity can be met from within the existing project budget.

The expanded propellant production capacity will enable the modernised Mulwala facility to better match the production capacity of the Benalla ammunition filling factory, especially in times of increased military tempo.

It will also increase the viability of commercial operations at the Mulwala facility, providing improved regional employment opportunities into the future. The Government will also benefit directly from any additional commercial sales through a sharing of the facility's profits