Germany's Economy Ministry has approved plans by defence group Rheinmetall to deliver a tank assembly plant to Algeria, according to a reply sent by the ministry following a request from a member of parliament. Rheinmetall's delivery to Algeria includes a production line to assemble the Fuchs armoured transport vehicle, as well as other parts valued at more than 28 million euros ($37 million), according to the document.
German magazine Der Spiegel had earlier reported about the approval.
The planned factory, located about 400 km east of Algeria's capital Algiers, is to build nearly 1,000 armoured vehicles, Der Spiegel said, adding parts would be exported to the country, where workers would assemble them.
The deal is the result of a visit to Algeria by German Chancellor Angela Merkel in 2008 and was largely approved by the previous government, Der Spiegel said.
Earlier this year, Economy Minister Sigmar Gabriel said he would tighten rules on arms exports, curbing sales to states such as Qatar and Saudi Arabia, whose purchases had previously helped make Germany the world's third largest arms exporter.
Germany earlier this month permanently halted Rheinmetall's planned export of combat simulation equipment to Russia, going beyond recently imposed European Union sanctions which block future defence contracts.
As a result, Rheinmetall cut its 2014 operating profit aim, and now expects group earnings before interest and tax (EBIT) of between 200 million euros and 220 million euros, down from a previous target range of 230 million to 250 million.
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