$500 million deal: Israeli Defense Ministry signs agreement to increase Iron Beam production

The director general of the Israeli Ministry of Defense, Maj.-Gen. (Res.) Eyal Zamir, signed an order on Sunday evening to expand the production of the first Israeli-developed laser interception system, "Iron Beam." The deal is worth approximately NIS 2 billion, or about $500 million.

As part of an agreement between the Defense Ministry, Rafael Advanced Defense Systems – the primary developer of the Iron Beam – and Elbit Systems, production rates for the Iron Beam laser defense systems will be significantly increased to achieve high-output manufacturing.

The Defense Ministry has set a target delivery date for the operational systems in the second half of 2025, marking a slight delay from the original goal of fall 2024.

Elbit’s share of the contract is worth approximately $200 million, while Rafael, the project lead, will receive the rest. Under the contract, the companies will provide the Iron Beam systems and ongoing support.

The Iron Beam is a high-power laser system for ground-based air defense against aerial threats (rockets, mortar shells, unmanned aerial vehicles, and cruise missiles). In December 2022, Rafael signed an agreement with Lockheed Martin to develop a variant of the Iron Beam for the United States military.

The Iron Beam system is the result of more than three decades of collaboration between the research and development unit at the Directorate of Defense, Research, & Development (abbreviated Maf’at in Hebrew), along with Rafael and Elbit, Israel's top two Israeli defense companies.

At the signing, the Ministry of Defense said that Iron Beam showed impressive results in a series of tests. Analysts believe the Defense Ministry leaders have been conducting field tests during the Gaza War. Defense officials called for the program to be accelerated following the outbreak of the war.

The Iron Beam system will be integrated into Israel's air defense array, alongside the Iron Dome system, serving as a complementary solution that will significantly reduce the cost of interceptions.

Previous tests showed Iron Beam’s interception price to be around $3.50 per rocket, compared to around $50,000 for each Iron Dome interceptor.

Defense Ministry Dir.-Gen. (res.) Dr. Danny Gold said, “Iron Beam will be a complementary system to the Iron Dome system. The combination of laser interception and missile interception will further tighten the defense envelope against rockets, missiles, drones, cruise missiles and other threats.”

While the Iron Beam has the advantage of lower cost per interception, there are also some well-known disadvantages.

First, the system intercepts serially. This means that during a barrage of projectiles, it will only intercept one rocket or one UAV per activation. To intercept multiple threats, several systems will need to be deployed simultaneously.

Another challenge is the effect of cloudy weather, haze, and fog, which can limit the system’s effectiveness. Still, the low interception cost, and easy deployment [Rafael even developed a smaller version, Lite Beam, for mounting on vehicles] are considered critical strengths of the system.

Zamir said, “The 'Iron Beam' deal is one of the most important agreements we have signed, as it heralds the beginning of a new era on the battlefield—the era of lasers. The first capability of the ground-based laser system, developed in collaboration between Maf’at and large industries and startups, is expected to enter operational service a year from today. The Iron Beam deal will ensure the continuation and acceleration of the procurement of many more laser systems.”