A CENTRAL Australian uranium mine could be up and running within six years.

A joint venture between the world's top uranium producer, Canadian company Cameco, and Australian giant Paladin Resources was given the go-ahead yesterday to explore the Angela and Pamela uranium deposits, 25km south of Alice Springs.

The deposits were estimated to contain more than 12,000 tonnes of uranium oxide -- worth up to $2.5billion.

The exploration phase could bring millions of dollars to Alice Springs, with workers expected to be based in the town.

Mines Minister Chris Natt said it could be four to six years before a mine is up and running.

He said the deposits were discovered in the 1970s, but were only considered valuable after a recent spike in the price of uranium.

The sites are two of 18 recently released under government control.

Chief Minister Paul Henderson said the companies beat 36 other applications because they were already operational in the NT and were "good Territory corporate citizens''.

"They have existing supplies, they know the Territory, they work well with the Territory,'' he said. 

"If the Angela and Pamela prospects live up to their potential, their value could run to the billions, creating years of economic benefit for Central Australia.''

But Australian Conservation Foundation nuclear campaigner Dave Sweeney warned that the mine could put Alice Springs' water supply at risk.

He said the mining company would likely use the in-situ leach method. This method involves pumping weak sulphuric acid into the ground to dissolve uranium ore, which is extracted later.