Australian uranium producer Paladin Energy Ltd has said it agreed with a major Chinese nuclear power firm to explore long-term uranium sales, as Beijing looks to boost its renewable energy capabilities.

Paladin signed a memorandum of understanding with a wholly-owned subsidiary of China Guangdong Nuclear Power Holding Corporation (CGNPC) setting up a "framework of cooperation" for uranium sales, the Sydney-based company said.

The agreement also mentioned the possible expansion of joint venture relationships between Paladin and Energy Metals, in which CGNPC holds a 69-percent stake, the firm said in a statement released Thursday.

Energy Metals is an Australian uranium exploration company and holds around 54 percent of the Bigrlyi uranium project northwest of Alice Springs in Australia's Northern Territory. Paladin owns 42 percent of the mine.

CGNPC may participate in Paladin's growth strategies as well, said the statement, which was also filed with the Australian Securities Exchange.

CGNPC is one of the three nuclear utilities in China and one of the only two Chinese companies that Beijing has authorised to import uranium, the official China Daily said Friday.

Paladin has projects in Australia and two operating mines in Africa.

Beijing has stepped up investment in nuclear power in an effort to slash carbon emissions and reduce the nation's heavy reliance on coal, which accounts for 70 percent of its power needs but is highly polluting.

The world's third largest economy aims to get 10 percent of its power from renewable sources by 2010 and 15 percent by 2020.

China currently produces around 750 tonnes of uranium a year but annual demand could rise to 20,000 tonnes a year by 2020 as it boosts nuclear power output, the China Daily said.

Zhang Guobao, head of the National Energy Administration, said late last year that China had 11 nuclear power reactors in operation with a capacity of 9.1 gigawatts.

China plans to have installed nuclear power capacity of 70 gigawatts by 2020, according to the state Xinhua news agency.

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