Officials from Canberra and Beijing have already held exploratory talks on the issue, Foreign Minister Alexander Downer said in a statement.

"The agreement will establish safeguards arrangements to ensure Australian uranium supplied to China is used exclusively for peaceful purposes," he said.

"China is the world's second largest energy consumer and has a high projected growth in electricity demand.

"China's plans to meet this demand include a four-fold increase in nuclear energy production by 2020. Diversifying from fossil fuels will result in lower greenhouse gas and particulate emissions," Downer said.

Australia, which has an estimated 40 percent of the world's low-cost uranium resources, already has 19 nuclear agreements covering 36 countries and earns some 400 million dollars (300 million US dollars) annually from uranium exports.

"Opening up this export opportunity with China is consistent with the growing trade and economic relationship between our two countries, and Australia's position as a secure supplier of energy resources," Downer said.

Australia currently has just three working uranium mines, but last week declared the resource-rich Northern Territory "open for business on uranium mining" after taking control of the deposits from the regional government.

The takeover came after a tussle between the federal Liberal government and the Northern Territory's Labor government, which had pledged to ban new uranium mines.

The Northern Territory's stance threatened to undermine federal government hopes of expanding Australian uranium exports to fuel the growing nuclear power industry around the world, notably in China and India.

The territory's only operating mine is run by Rio Tinto's Energy Resources of Australia at Ranger, which is surrounded by Kakadu National Park.

But a total of around a dozen companies are exploring for uranium in the territory, which is home to some 12 billion dollars (9.2 billion US) worth of known uranium deposits, Resources Minister Ian MacFarlane said.

French nuclear power company Cogema is lobbying traditional owners in a bid to mine its multi-million dollar, 14,000-tonne Koongarra deposit in the World Heritage-listed Kakadu park.

Uranium prices have been rising steadily in recent years, to around 29 dollars per pound from nearly 10 dollars a pound four years ago, fueled by growing acceptance of nuclear power as an alternative to greenhouse gas producing fossil fuels like coal and oil.

A large number of countries, including China, India, the United States, Britain, South Korea and Russia are looking at major expansions of their nuclear power programs.

Nuclear energy is banned in Australia but debate over the issue has crept onto the political agenda recently as an alternative to fossil fuels.

Australia's two other operating uranium mines are BHP Billiton's Olympic Dam and Heathgate Resources' Beverley mine in South Australia.

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