URANIUM miner Energy Resources of Australia is about to sell its first uranium to China, following the signing of bilateral safeguard agreements between the two nations last year.

"ERA has reached in principle agreement for a contract to supply uranium oxide to an electric utility in China beginning in the 2008 second half," the company said yesterday.

Announcing its June half-year result, Rio Tinto-controlled ERA said it had previously sold uranium from its Rossing mine in Africa to the People's Republic.

But the latest deal will see material despatched from the group's Ranger mine in the Northern Territory.

China is undertaking a major expansion of its nuclear power-generating capacity while uranium prices have soared over the past few years - with ERA saying its average price in the half was $US35.69 ($A37.30) a pound, up from $US16.90 previously.

The rise comes as recent contracts increase their influence over long-term contracts signed years ago when prices were in the doldrums.

ERA's return remains well below the current international long-term price, however. But presumably, China will be paying close to the international mark - which ERA said was currently $US86.67 a pound.

ERA's first-half profit was $38.9 million for the first half, up from $5.7 million previously on revenue of $167.4 million.

The group will pay an interim dividend of 8, after making no half-year payout in 2007.

While Rio Tinto is looking to expand its uranium interests, rising production costs at ERA's Ranger mine have seen it shelve expansion plans and instead it will extend the mine's life, according to Preston Chiaro, Rio's chief executive of energy and minerals.

"We're pursuing opportunities in Kazakhstan but are also in discussions for prospects in Jordan," Mr Chiaro said after a Sydney briefing.

Mr Chiaro also said Rio was looking to lift its coking coal output from about 10 million tones to 18 million tonnes in the next few years and looking at acquisition opportunities, though these were currently highly priced.