Wen, in Perth on the first leg of a four-day tour of Australia, confirmed the two nations would sign the agreement in Canberra on Monday -- the first step in helping energy-hungry China satisfy the needs of its rapidly expanding nuclear power industry.

He said the agreement would ensure uranium was used for peaceful purposes.

"In our bilateral cooperation we should establish a long-term, stable and fundamental institutional and systematic safeguard," Wen said through an interpreter.

"Our energy and resources cooperation is ensured by such a safeguard and during my visit to Australia this time the two governments are going to sign the agreement for peaceful use of nuclear energy and safeguards of nuclear energy."

The Chinese number two also hinted that uranium exports could be subject to price-capping after Asian steelmakers were last year hit by soaring prices of iron ore imports.

"We are also going to set up a price formulation mechanism that is up to international norms and I believe this will provide a long-term benefit to our two countries," Wen said.

Speaking on commercial television, Australian Prime Minister John Howard said that Canberra would ensure the safeguards were strict but there would also be an element of trust.

"The safeguards that we have adopted are very rigorous and unless we are going to declare to the world that we're not going to deal with anybody, then... in relation to uranium we have to assume a certain degree of good faith," he said.

But he stressed that any Chinese investment in uranium projects in Australia, which has some 40 percent of the world's known uranium, would be subject to the same constraints as other foreign investment.

"We're not talking about having a special deal for Chinese acquisitions in Australia," he said.

"I'm not going to telegraph in advance, it would be improper to do that, I simply would say to our Chinese friends, as I do to our Japanese and American and British friends, if any of your companies ... want to buy assets in Australia, they're subject to the foreign investment policy of this country."

Resources Minister Ian Macfarlane, who met Wen early Sunday, said it could still be years before the first shipments arrive in China, with commercial negotiations to be completed and the need to expand uranium mining to meet China's demands.

"There have been no discussions in regard to contracts and tonnages and I think there has been an unrealistic expectation that with tomorrow's signing of the safeguard agreement we will see a situation where tonnages will be exported the next day," he told reporters.

"We are some distance away from exporting uranium to China. The safeguard agreement is obviously the first step that has to be signed."

Macfarlane would not put a timeframe on exports but said China's short-term demands could be met in part by the expansion of the Olympic Dam mine and the "imminent" opening of the Honeymoon site, both in South Australia.

"But in reality there will need to be a substantial expansion of the Australian uranium industry if we are to satisfy part of China's 20,000 tonnes per annum of demand in uranium," he said.

Macfarlane said pricing would be determined by the market.

Leading environmental group, the Australian Conservation Foundation, said the sale of uranium could lead to regional insecurity.

"No matter how strong and how valid the assurances that China or any other country gives us, once we export uranium it's outside of our control, so we're making the world a dirtier and more dangerous place by exporting uranium," president Ian Lowe told ABC radio.

Meanwhile in other uranium supply news,....

India Fuels Up With Russian Uranium

India has received an initial shipment of enriched uranium fuel from Russia for a nuclear power plant in the western state of Maharashtra, a report said Sunday. The first consignment of 20 to 25 tonnes of uranium has arrived in the country and will be delivered to the Tarapur nuclear power station soon, the Press Trust of India news agency reported.

Another consignment of 45 to 40 tonnes was expected soon, it said.

"With Russian supply of 60 metric tonnes of uranium, the plants will have fuel for the next five years and (will) run smoothly," S. Thakur, an officer with the Nuclear Power Corporation of India which runs the Tarapur plant, told the news agency.

Last month Russia announced it would supply a limited amount of uranium for the plant,

India last month concluded a landmark nuclear agreement with the United States. This would lift embargos on the transfer of nuclear fuel and technology for civilian purposes.

The deal however is still awaiting the go-ahead from the US Congress and the 45-member Nuclear Suppliers Group that controls the trade in civilian nuclear technology and fuel.

Tarapur was built by US company General Electric in the 1960s but Washington halted uranium supplies after New Delhi staged its first nuclear tests in 1974 and refused to sign the nuclear Non-Proliferation Treaty.

Since then the plants have received sporadic supplies from Russia and France.

Uranium Rush In Finland Seen As Environment Threat

The rising price of uranium is tempting leading mining corporations to look for the metal in resource-rich Finland, but resistance from locals, worried about the environment, is mounting.

Five companies, including Canada's Belvedere Resources and France's Cogema, have asked for permission to check whether it would be profitable to mine uranium in Finland.

High prices for the radioactive heavy metal used to produce nuclear energy have prompted fresh spending on exploration, after investment dried up a decade ago.

The world's main uranium producers are Australia, South Africa, Namibia, Niger and Canada.

After reaching an all-time low of seven dollars per pound in 2001, uranium prices have rebounded to 40 dollars a pound in March, a level not seen in more than 25 years, making exploration in smaller producer countries viable.

Like neighbouring Sweden, Finland is witnessing a rush for several metals and minerals, including gold, diamonds, zinc, iron, copper, and most recently, uranium.

In 2005, mining companies invested some 35 million euros (42 million dollars) in Finland.

"In terms of investment, Finland and Sweden are number one in Europe," said Krister Soederholm, the Finnish government's chief mining inspector.

French nuclear conglomerate Cogema last November staked a claim on 174 kilometres square in the Askola region, an hour's drive from Helsinki, and also reserved areas in Lappland and northern Karelia, near the border with Russia.

But the local community in Askola says it will resist attempts to mine uranium in its backyard, fearing for tourism, housing prices and the purity of their drinking water.

"Exploration will happen in a densely-populated area where housing prices are already falling," said Per-Haakan Slotte, general secretary at the townhall of Borgaa, a tourist destinatinon with 48,000 inhabitants situated 50 kilometres (30 miles) from the capital.

"People fear for their environment," he said.

Environmentalists focus on the danger of soil and ground water contamination from waste produced by the mining of uranium, which is highly toxic.

Some are afraid that agricultural land, forests and areas currently earmarked for housing construction will be cut off from clean water.

"We are obviously worried. We have three children. If they dig a mine here we will have to leave," said Reija-Riikka Stenbaeck, a veterinary nurse in Askola.

Soothing comments by Cogema, a subsidiary of Areva which is building Finland's fifth nuclear reactor, that research and exploration "have no significant impact on the population" and that local communities would be consulted on further plans, don't cut any ice with the locals and environmental organizations.

"Why would they explore if the aim is not to open a mine?" asked Tapio Reinikainen, a member of protest organisation "uraaniton.org", predicting that Cogema would have to withdraw in the face of future protests.

But there are no signs of this, as international mining companies feel the pressure from rising worldwide demand.

Electricity companies, the main consumers of uranium, need to replenish stocks which have been depleted as the number of nuclear power stations in the world rises, despite anti-nuclear policies in a small number of countries like Germany and Sweden.

Uranium reserves, on land and at sea, are believed to be sufficient to meet demand for tens, or even hundreds, of years.

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