Industry minister cautiously optimistic about Korea's bid for Canadian submarine project

Industry Minister Kim Jung-kwan expressed cautious optimism on Wednesday about Korea's bid to supply up to 12 patrol submarines to Canada in a contract worth 60 trillion won ($39.9 billion), as the deadline for the decision approaches next month.

Korea is facing off against Germany's TKMS in the competition, with the Korean consortium — comprising Hanwha Ocean and HD Hyundai Heavy Industries — making its case on the back of a demonstration voyage by the Dosan Ahn Chang-ho submarine, which traveled approximately 14,000 kilometers (8,699 miles) from Jinhae, South Gyeongsang, to Victoria, Canada, arriving on Saturday.

“Germany is still in the design phase,” Kim said at a press event in Sejong, marking the approaching one-year anniversary of the Lee Jae Myung administration. “From Canada's perspective, the choice between something that already exists and something still on paper should be straightforward. Our price is competitive, and the specifications we can demonstrate today are ahead of what Germany's design currently shows.”

Kim said that he met with Canadian Industry Minister Mélanie Joly earlier this month to discuss the deal. He noted that Canada's automotive sector had responded positively to Korea's industrial cooperation offers, including a Hyundai Motor hydrogen vehicle manufacturing commitment in Canada and a Hanwha defense vehicle joint venture with Canada's Automotive Parts Manufacturers' Association — both contingent on a Korean win.

Kim acknowledged one structural headwind: Canada and Germany are NATO allies, a factor that could weigh on Ottawa's final decision.

Separately, attention is turning to the first concrete investment project under Korea's $350 billion U.S. investment package, with the Special Investment Act taking effect on June 18. Kim was guarded on timing.

“Discussions between [Korea and the United States] are proceeding in a far more constructive direction than early concerns suggested,” he said. “But we have no fixed date to finalize anything.”

While Kim declined to confirm a timeline, the first investment project is widely expected to be announced later next month. Energy infrastructure and shipbuilding are the two sectors most actively being discussed. On the energy side, a liquefied natural gas, or LNG, export terminal project in Louisiana, proposed by the U.S. government and valued at over $10 billion, is considered the front-runner, alongside next-generation nuclear and small modular reactor projects targeting Washington's surging power demand from AI data centers.

The shipbuilding track centers on the Make American Shipbuilding Great Again initiative, also known as MASGA, a program to broadly modernize U.S. shipyards using Korean capital and automation technology. This could be bolstered by the Korea-U.S. shipbuilding partnership that Kim signed with U.S. Commerce Secretary Howard Lutnick during his Washington visit earlier this month.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]