Australia's Prime Minister Scott Morrison presents his national statement at the COP26 UN Climate Change Conference in Glasgow on November 1. Photo: VCG

Australia signed a A$1 billion ($716.5 million) defense deal with South Korea on Monday, boosting Seoul's efforts to grow its military exports.

Under the terms of the defense deal, South Korean defense company Hanwha Corp will build 30 self-propelled howitzers and 15 armored ammunition resupply vehicles for Australia.

"It's an important further chapter in the defense industry story for Australia as we continue to build our sovereign capability and [South] Korea is an important partner in that journey," Australian Prime Minister Scott Morrison said in a statement to the reporters in Canberra.

The deal positions Hanwha as a frontrunner for Australia's planned A$30 billion contract to build infantry fighting vehicles for its army.

Shares in Hanwha were up 3 percent following the announcement.

While the defense deal is the headline of South Korean President Moon Jae-in's four-day trip to Australia, both countries said they have also agreed to work closely to help ensure supplies of Australian critical minerals exports for South Korea's tech sector.

South Korea needs critical mineral supplies, having pledged to become a global battery manufacturing powerhouse by 2030 as part of its plan to be carbon neutral by 2050.

Australia supplies around 40 percent of South Korea's critical mineral imports, which are crucial for many of the components needed to drive the world's economies to net zero emissions by 2050.

Reuters