The Northern Territory Government has given approval to a joint venture between the Canadian company Cameco and the Australian firm Paladin to explore a parcel of land south of Alice Springs that could have up to $2 billion worth of uranium deposits.

The Angela and Pamela deposits were last explored in the 1970s but were abandoned when the price of uranium dropped.

But the price of yellow cake has increased on world markets in recent years, prompting the Territory Government to call for expressions of interest to explore the deposits.

The Government says it received 37 applications but the Cameco-Paladin venture was the best.

The Northern Territory Chief Minister says the exploration will provide a welcome economic boost to central Australia.

Paul Henderson says the joint venture met a number of conditions set down by the Government.

"Both Cameco and Paladin are already operational in the Northern Territory, they have existing suppliers, they know the Territory, they work well in the Territory," he said.

"Certainly in the exploration phase we will see millions of dollars for Alice Springs, jobs in central Australia."

It will take at least five years for production to start if exploration is successful.