The Australian Government has awarded a contract to defence technology company DefendTex to develop rocket-propelled grenade technology for the country’s Defence Force.

The A$2m ($1.36m) contract is part of the government’s efforts to encourage small local businesses to develop new technologies for Australia’s military.

It was awarded through the Defence Innovation Hub that seeks to invest around A$640m ($437.49m) over the decade to 2025-26 in maturing and developing technologies.

Australia Defence Industry Minister Melissa Price said: “The Morrison Government is on the side of Australian workers in the defence industry.

“Small business is the backbone of the Australian economy and the Defence Innovation Hub is just one avenue for these businesses to succeed in our defence industry.”

The contract was announced during Price’s visit to the DefendTex headquarters in Melbourne.

Last month, a DefendTex-led research collaboration received government support for research into rocket propulsion technology.

The objective of the Responsive Access to Space project is to develop a flight-ready rotating detonation engine to help build a sovereign space launch capability.

The collaboration will employ new thermal management techniques and advanced control of inlet, injection, and fuel mixing processes.

Other participants in the project include RMIT University, University of Sydney, University of South Australia, Universitat de Bundeswehr, Defence Science and Technology Group, and Innosync.

DefendTex also received funding earlier this year to develop new technology in additive manufacturing for energetic materials used in the defence industry.

The company has offices in Australia, the UK, and the US.