ENERGY Resources of Australia, which is 68.4 per cent-owned by Rio Tinto, says it has signed an agreement to supply uranium to a Chinese electric utility.

ERA, the producer of a tenth of the world's uranium, operates the Ranger mine 250 kilometres east of Darwin in the Northern Territory.

Rio Tinto chief executive of energy Preston Chiaro said ERA had "reached in principle an agreement for a contract to supply uranium oxide to an electric utility in China".

Mr Chiaro said that the agreement was reached after the signing of a bilateral safety agreement between the Chinese and Australia governments.

Rio Tinto said the supply agreement with the utility starts in the second half of 2008.