Rheinmetall to sign ammunition deal with Germany worth billions of euros

German corporation Rheinmetall expects to sign a deal with the German government to supply billions of euros worth of ammunition in the coming weeks.

The company’s CEO, Armin Papperger, told Reuters in an interview. He said the deal between Germany and Rheinmetall would be worth several billion euros.

Germany is about to seal a large framework contract with us – Papperger

“Germany is about to seal a large framework contract with us,” Papperger announced in Brussels, where he participated in a joint session of NATO defence ministers and some 20 defence industry bosses. The Rheinmetall CEO hopes the company will announce the deal within the next six weeks.

“This will definitely be our best year in terms of orders,” said Papperger. He added that he expects several deals for vehicles, ammunition, electronics and radar systems.

Papperger also said that in July, Rheinmetall would send Ukraine the first 35mm rounds for Gepard self-propelled anti-aircraft artillery systems.

German shells will be supplied to Ukraine

The shells were manufactured on a new production line installed after Switzerland refused to allow the export of 35mm shells for Gepard to Ukraine.

In 2024, Rheinmetall promises to increase its production of shells to 600,000 from the current 450,000.

Russia’s war in Ukraine and the West’s support for Ukraine’s armaments have significantly boosted production in the EU defence industry. This demand will stimulate the economy of the countries.

Plan to produce ammunition in the EU and supply it to Ukraine

The EU summit decided to centralise the shell supply to Ukraine on 20 March.

The EU plan consists of three segments:

1. EU member states provide additional ammunition worth €1 billion from their existing stockpiles, with compensation from the European Peace Fund for this supply.
2. EU member states will intensify the purchase of new ammunition for Ukraine, for which the European Commission is allocating an additional €1 billion.
3. To replenish stocks and simultaneously prepare for a potentially prolonged war, the EU is strengthening and accelerating defence production in Europe.

The EU has identified 11 European countries with a defence industry capable of producing 155 mm (the NATO standard) and 152 mm (the former Soviet standard of ammunition that Ukraine continues to use, as the Ukrainian Armed Forces still have a lot of Soviet-style equipment).