Rheinmetall Nitrochemie is to provide the British military with propellant systems for ammunition manufacture under a 10-year deal signed with BAE Systems worth 200 million euros ($291.8 million).
BAE is responsible for providing ammunition to the British armed forces as part of a major deal with the Ministry of Defence known as the Munitions Acquisition Supply Solution (MASS) initiative. Rheinmetall Nitrochemie, jointly owned by Rheinmetall and Switzerland's RUAG, will become a subcontractor to BAE as part of the MASS deal supplying propellant systems and powder.
A BAE spokesman said subcontract deals for other parts of Britain's MASS agreement may follow.
The MASS agreement gives BAE responsibility for supplying live and practice ammunition across all calibers and types. According to Rheinmetall, MASS is responsible for about 80 percent of all British armed forces ammunition requirements, including small arms, mortars, tanks and naval artillery.
Rheinmetall has provided propellants to BAE for several years since it closed its own production facilities in Bridgewater. The deal formalizes and extends the existing relationship between the companies as well as introducing price caps and cost-reduction incentives.
Under the MASS agreement, Rheinmetall already has supplied ammunition and components for 20mm and 30mm weapons, as well as 105mm smoke and red phosphorous projectiles, and 155mm smoke and illumination shells.
Other pyrotechnics and ammunition supplied to the United Kingdom by Rheinmetall under a separate agreement, known as DGM/1400, include 40mm cartridges, 30mm Goalkeeper FMPDS ammunition, and L84A2 smoke grenades. This latter agreement began in 2005 and will continue until at least March 2011.
The company produces propellants and propelling charges for various calibers of ammunition, with facilities in Aschau, Germany, and Wimmis, Switzerland.