A TERRITORY uranium mine could be developed rapidly following a deal with China's second-biggest builder of nuclear power plants.

Paladin Energy is targeting uranium shipments to the People's Republic by next year.

The ore is likely to at first come from the company's operations in Africa.

But the agreement could lead to the opening of Bigrlyi, 390km northwest of Alice Springs.

 

Industry experts have long predicted that the project would be the Territory's next uranium mine.

The licences cover 1414ha on the Mount Doreen cattle station, 80km west of the Yuendumu community.

Chief executive John Borshoff said Paladin aimed to convert a memorandum of understanding with China Guangdong Nuclear Power Group into supply contracts later this year or early next year.

He said Paladin might then be able to begin shipments in the "latter part" of next year.

"Demand in China is strong," Mr Borshoff said. "The equation of what they will need to what they're getting doesn't stack up."

The initial agreement with China Guangdong Nuclear may lead to partnership opportunities, expansion of the Bigrlyi joint venture and long-term sales.

Citigroup analyst Clarke Wilkins said the accord was a "natural match" because China had less than 10 per cent of its uranium needs by 2020 covered by contracts or mine ownership. Paladin shares rose as much as 3.2 per cent on the ASX late yesterday to $3.83 before closing at $3.80.

Mr Borshoff said Paladin expects uranium demand to outpace supplies, driving prices higher from their "stubbornly static" levels.

"Fewer and fewer of the undeveloped uranium deposits remain available to be exploited," he said.

In July, Paladin bid $27 million for NGM Resources.

Mr Borshoff said Paladin would continue to pursue potential mergers and acquisitions.

Paladin plans to double uranium oxide production to about 7000 tonnes by financial year 2016.