Austal USA in Mobile, long an exclusive manufacturer of aluminum ships, will venture in to steel vessels, after securing $50 million from the U.S. Department of Defense.

The Defense Production Act Title III Agreement is designed to maintain, protect, and expand U.S. domestic production of steel shipbuilding capability. Austal intends to use the funds to begin steel naval vessel construction at the Downtown Mobile shipyard.

The agreement is part of the national response to COVID-19 and is designed to protect jobs and bolster the local economies in regions hit hard by the coronavirus pandemic, as well as supporting U.S. Navy operational readiness. The funds were authorized and appropriated under the CARES Act.

Austal reports it will likely match the government funding which would take the total investment to $100 million. Austal and the Department of Defense will develop specific uses for the funds over the next several months.

News reports in Australia, home to Austal’s international headquarters, say the money will be used to construct and equip new build sheds. “Steel ships are much heavier than aluminium vessels, so the sheds will have heavier cranes and stronger floors capable of carrying greater weight,” reports the Sydney Morning Herald. Austal will also need to construct paint and blast facilities because steel ships, unlike aluminium vessels, are painted.

It’s been a big day for positive news at Austal which earlier Tuesday announced a $43 million contract with the Department of Defense to maintain and repair existing and future Austal-made Littoral Combat Ships. Austal has already launched 13 LCS with contracts to deliver six more to the U.S. Navy.

Austal also has a Navy contract for the Expeditionary Fast Transport, previously known as the Joint High Speed Vessel. Ten of a contracted 14 aluminum twin-hull catamarans have been completed.

Austal employs approximately 4,000 workers, far and away Mobile’s largest industrial employer.

Just seven weeks ago, Austal USA suffered a major blow when the U.S. Navy did not choose it to build a new class of guided-missile frigates. That contract was worth $795 million per ship.