Saudi Arabia is known to have attempted to buy armed Predator drones from the US.
This has been a capability the United States has denied the Middle Eastern nation and would thrust South Africa into a politically-fraught market.
In 2010, Denel started dropping hints that the new version of its unmanned aerial vehicle (UAV), the Seeker, could potentially offer more than just reconnaissance. Now it seems the weapons manufacturer has found its first customer for drone aircraft capable of blowing up a house or vehicle with few unintended casualties.
According to specialist newsletter Intelligence Online, engineers from the Denel Dynamics division are currently working with the Saudi military to create an armed version of the Seeker 400 drone, a platform Denel has to date marketed for surveillance use. Such drones, Intelligence Online said, would be capable of carrying Denel Dynamics' Mokopa or Impi missiles.
The Mokopa is a highly accurate anti-tank missile first developed for use on the Rooivalk attack helicopter. The Impi was built specifically for light-weight aircraft, and features a multi-purpose warhead that could make it suitable for the type of assassination missions made famous by US Predator drones.
Denel this week flatly refused to comment on the report, and representatives of the Saudi Arabian embassy in Pretoria were not available to take questions.
But despite the utter lack of official confirmation, there is little reason to doubt the existence of such a deal. Denel has previously identified Saudi Arabia as one of the key markets it would like to expand, and has been looking for buyers for both its drone aircraft and missiles. It has been supplying unarmed UAVs in the region for some time, and has previously boasted about the growth in such sales.
Fierce criticism
Saudi Arabia, meanwhile, is known to have attempted to buy armed Predator drones from the US – attempts that were rebuffed because the US is uncomfortable with providing such weapons to other states. American suppliers have instead sold Saudi Arabia versions of the Predator specifically engineered to make it very hard to mount weapons.
Denel Dynamics has previously said that it was in talks with "all countries in the Arabian Gulf".
Besides stepping on American diplomatic toes, such a sale could draw South Africa fire on two other fronts.
The Seeker 400 drone, the UAV model reportedly up for sale to Saudi Arabia, has a range of up to 250km. That, and missiles with a further reach of at least 10km, would make such a weapons system capable of hitting Jerusalem or Beirut. It could also be used in Iraqi air space.
There is also the growing debate around the use of armed drones, specifically for the assassination of suspected terrorists, which is the presumed primary objective of the Saudi Arabian military.
Criticism of and outrage at such missions, and the number of civilians killed in such strikes, has seen fierce debates in the US.