Australian miner Energy Resources says it plans to be first to ship local uranium to China

Energy Resources said Friday it expected this year to be the first Australian miner to export uranium to China _ more than two years after the government lifted a ban on such sales of the nuclear fuel.

Energy Resources of Australia Ltd. said in a directors' report Friday that the Rio Tinto subsidiary "has reached in principle agreement for a contract to supply uranium oxide to an electric utility in China beginning in the second half of 2008."

Energy Resources spokeswoman Libby Beath said she believed the export contract would be the first for Australian uranium with a Chinese customer.

"We're not privy to other companies' sales contracts, but to our knowledge, we believe we are the first" to sign an in-principle agreement for a sale to China, she told The Associated Press.

She declined to identify the customer or detail the price or quantity of uranium involved in the deal.

Energy Resources, which produces 10 percent of the world's uranium, also reported that profit for the six months to June 30 rose more than sixfold to 39 million Australian dollars ($37 million) compared with the same period in 2007.

The strong result was underpinned by an average uranium sale price that more than doubled to $35.69 per pound.

Shares in the miner, which is 68.4 percent-owned by Rio Tinto, dropped 2.37 percent on Friday to A$22.65 ($21.67) amid a sell-off regional stock markets.

Preston Chiaro, Rio Tinto energy chief executive, told reporters that China would be the main driver of increased global power demand that was expected to grow "particularly strongly."

Beijing and Canberra signed agreements in April 2006 that cleared the way for China to buy Australian uranium, but only for use in its nuclear power stations.

China has been negotiating for months to buy uranium from Australia, which has 40 percent of the world's known uranium reserves.

China is already a major customer of Australian energy, buying vast quantities of coal and natural gas to fuel its burgeoning manufacturing industry.

China is Australia's most important trading partner. The two countries are in the midst of negotiating a bilateral free trade agreement.