China today took a landmark step towards securing nuclear power supplies for its booming economy as it signed an agreement with Australia that paves the way for uranium exports from the world's largest producer.

Amid concerns from environmental groups and some Australian lawmakers, Wen Jiabao, the Chinese Premier, and John Howard, the Australian Prime Minister, insisted safeguards would ensure the uranium would be used for non-military purposes only.

The agreement coincided with a four-day visit to Australia by Mr Wen, during which six commercial projects, including a gas exploration venture between Australia's BHP Billiton and Kerr-McGee and China's CNOOC International, have been agreed.

China is expected to build 40 to 50 nuclear power plants over the next 20 years despite its own dwindling uranium stocks being difficult to extract. According to analysts, Chinese demand could double Australia's tightly controlled uranium exports.

However, it is thought unlikely that significant supplies will reach China from Australia, which already supplies 11 nations with uranium, before 2010.

"Australia is already fully committed in terms of uranium production through until about 2008, bearing in mind that the signing of this agreement means that this is really only the start of the process," Ian Macfarlane, the Australian Resources and Industry Minister, told ABC radio.

"Realistically in terms of any significant quantity we are probably looking at some time past 2010."

Reliable energy supplies are at the forefront of Beijing’s agenda as the Chinese economy continues to power ahead. Last month, China played host to the Russian President Vladimir Putin for a string of meetings which saw Russia, the world's second-largest oil producer, pledge deeper co-operation with China, the second-largest consumer, on oil and gas issues.

However, nuclear power potentially raises even more serious security concerns. Australia, which controls 40 per cent of the world's uranium reserves, requires export partners to sign the UN Nuclear Non-Proliferation Treaty and an additional bilateral safeguards deal.

At a joint press conference Mr Wen said China was a responsible member of the international community and would abide by the rules of the International Atomic Energy Agency and the principles of the nuclear Non-Proliferation Treaty.

"The agreement we entered today has provided safeguards for the peaceful purposes of our nuclear co-operation," he said.

Mr Howard said he had confidence in the safeguards which ensure uranium is sold only to electricity utilities.

"I am satisfied that the safeguards that are there will be enforced and on that basis the agreement has been signed," Mr Howard said.

Alexander Downer, the Australian Foreign Minister , said: "Given China’s high projected growth in electricity demand over the coming years, there are clear environmental benefits in diversifying from fossil fuels to low greenhouse-emission technologies such as nuclear power."

Mr Howard also suggested that the government could intervene if Australia were unable to meet uranium demand from China.

Labor Party governments in Australian states and territories have until now blocked the further expansion of the uranium industry by refusing to allow more than three mines to open.

Mr Wen said he was keen for more regular high-level talks between the two nations.

Mr Howard said: "Of all the ... major relationships Australia has with other countries, none has been more completely transformed than the relationship with China over the last 10 years."

"The best way to build the relationship further is to continue doing what China and Australia do best and that’s to understand our fundamental differences, to be realistic about those differences, but nonetheless focus on the areas of common interest where we can fully cooperate."

Speaking later at a lunch, Mr Howard said that Australia’s close relationship with the US, would not have an impact on growing Sino-Australian ties driven by burgeoning trade.

Australian exports to China have quadrupled in the past decade, reaching A$12.9 billion in 2004-2005.

Times Recommends

• Lies and cover-up at MG Rover exposed by report
• High oil prices push manufacturing costs up
• Primark founder steps down as chief executive