THE Federal Government is set to decide this week whether to allow a $140 million deal for the Territory to provide uranium to Chinese nuclear power plants.

The China Guangdong Nuclear Power Group is trying to purchase a 70 per cent stake in Energy Metals, which is exploring the Bigrlyi uranium deposit near Alice Springs.

CGNPC chairman Xiong Jiang told Resources Minister Kon Vatskalis he was very concerned about the approval process.

"Uranium is a very sensitive field and it is included in the non-proliferation agreement, but please keep in mind it will be used for peaceful uses," he said.

The company already has four power stations in China and a further 18 under construction.

The foreign investment review board is set to make a decision this week to approve the purchase.

"Our investment in the Northern Territory will go to local employment and taxation and the Northern Territory will support our nuclear development in China," he said.

Mr Vatskalis told the Chinese nuclear company that the deal had his full support and he was prepared to write to the Federal Government.

"It is like China - the Emperor lives too far away and does not know what is happening in the Territory," Mr Vatskalis said.

"The best thing about the Australian political system, we are not afraid to argue with our Emperor."

Mr Vatskalis said many foreign companies had been put off by the anti-China scare campaign that has been running in the media.

"To put it bluntly, they are our biggest customer," Mr Vatskalis said.

"One thing we have to be very, very careful about is not drive our customers away to other suppliers. If these people feel they can't find supply in Australia, they will start looking around."

The Bigrlyi deposit has 12,000 tonnes of uranium oxide. The Ranger uranium mine produces 5700 tonnes of oxide a year.