Rheinmetall, a supplier of 120mm tank ammunition, secured a major order from the Bundeswehr, expanding an existing framework agreement to a value of €4bn ($4.5bn).
Given the evolving security situation, the Bundeswehr’s decision to bolster its ammunition stocks shows its commitment to rebuilding its defence capabilities. This order allows the military to ensure an adequate supply of ammunition for its various operations and contingencies.
The framework agreement includes the provision of tank ammunition for the German Bundeswehr and the Ukrainian armed forces. This highlights Germany’s commitment to supporting Ukraine’s defence efforts and strengthens the partnership between the two nations.
The importance of improving the readiness and strength of the Bundeswehr has been brought into the spotlight following the Russian invasion of Ukraine, with conventional and traditional warfare once more the focus of policymakers, according to GlobalData’s “German Defence Market 2022-2027” report.
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Under the newly expanded contract, the Bundeswehr has the potential to acquire several hundred thousand rounds of 120mm x 570 cal—service and practice ammunition, primarily used by the Leopard 2 main battle tank.
According to GlobalData’s “The Global Military Ammunition Market 2021–2031” report, in 2020, the Bundeswehr signed a contract to modernize its existing stock of 15,000 artillery ammunition. The contract started in 2020 and is expected to run until 2031. Under this contract, the German army aims to receive 120mm tank ammunition.
This coincides with the Bundeswehr ordering 18 new Leopard 2 A8 main battle tanks, Rheinmetall delivering 14 Leopard 2A4 tanks to Ukraine to support Ukraine’s ongoing counter-offensive against invading Russian forces in the south and east of the country, and Rheinmetall opening a tank factory in Ukraine.
With a first call-off of ammunition valued at €309m, the contract demonstrates the immediate effect of the agreement on Rheinmetall’s production and delivery capabilities.
The order encompasses a wide range of tank ammunition, including multipurpose rounds with non-programmable fuses and programmable variants with three ignition modes. Additionally, the contract includes various practice ammunition designed to offer reduced range and cost while maintaining comparable ballistic characteristics.
The strategic framework contracts Rheinmetall has entered into with Germany and its partner nations ensure a steady, long-term supply of ammunition. This approach allows for better planning of the production process and optimal utilization of existing capacity.
One of the framework agreement’s key advantages is its logistical efficiency. The ongoing production of various ammunition types throughout the contract ensures rapid availability, enhancing operational readiness for the German armed forces.
This agreement guarantees sustained utilization of its tank ammunition capacity for Rheinmetall, ensuring a stable production pipeline for years.
With the expansion of the framework agreement, the Bundeswehr and Rheinmetall continue their partnership, strengthening Germany’s defence capabilities and supporting its international commitments. The collaboration also serves as a testament to the high level of trust the German military places in Rheinmetall’s ammunition production.