Uranium explorer Energy Metals Ltd. (EME.AU) said Tuesday it has received an A$83.6 million cash offer for 70% of the company from a unit of state-owned China Guangdong Nuclear Power Holding Co., or CGNPC.

The offer signals China's first significant corporate move into one of the world's biggest uranium producing nations and comes amid a wave of Chinese investment in Australia's natural resources.

Also on Tuesday, China Railways Materials Commercial Corp. proposed to take substantial stakes of around 12% in two Australian iron ore juniors United Minerals Ltd. and FerrAus Ltd.

China already has an indirect investment in Australia's uranium sector through Aluminium Corp. of China's 9.3% shareholding in Anglo-Australian diversified mining giant Rio Tinto Ltd.

And in 2006, the former Conservative government allowed China's Sinosteel to take a 60% stake in a uranium project to be supplied by local miner PepinNini Minerals Ltd. The joint venture is still targeting production from a project in South Australia state in 2011.

Perth-based Energy Metals has a portfolio of eight uranium projects covering 4,000 square kilometers in Australia's Northern Territory and Western Australia state.

CGNPC is offering Energy Metals A$1.02 a share cash, an 18.6% premium to its latest price of 86 cents before the shares were halted from trade on Aug. 27.

China Uranium has also agreed to underwrite an A$11.7 million 1-for-9 rights issue at 90 cents a share. It will end up with 73% of the company if no other shareholders participate.

The offer is subject to the approval of shareholders, the Australian Foreign Investment Review Board and Chinese regulators.

In a sign local investors are confident the deal will be finalized, Energy Metals shares surged 13% Tuesday to 99 cents, despite the A$1.02 offer only accounting for 70% of the company and the potential dilutionary impact of the equity raising.

The share price surge could also show that some investors believe a rival bid could emerge for the group.

The offer comes amid a low point in relations between China and Australia following the detainment last month of four Rio Tinto employees, including Australian citizen Stern Hu, on charges of bribery and infringing on state secrets.

It also comes as disquiet grows among some politicians and commentators about the amount of Chinese investment in Australia's mining sector.

FIRB currently has a lot on its plate, with the regulator mulling a proposed A$3.54 billion acquisition of coal miner Felix Resources Ltd. by China's Yanzhou Coal Mining Co.

It's also considering a controversial A$252 million investment by a Chinese company in Lynas Corp. that would strengthen China's hold on the world's supply of rare-earth minerals.

The proposed Energy Metals deal is substantially smaller than others being considered by FIRB, so it's unlikely to attract the same level of regulatory scrutiny. It also involves a small portion of Australia's uranium resource.

According to a May 9 report by the World Nuclear Association, Australia's uranium reserves are the world's largest with 23% of the total, followed by Kazakhstan, Russia and South Africa.

Chinese interest in Energy Metals is of little surprise, with China poised to increase its nuclear power capacity substantially as it strives to use cleaner-burning fuels.

China National Nuclear Corp. Vice President Qin Jiangang told Dow Jones Newswires in April that the company was talking to Australian uranium suppliers but needed to verify the feasibility of certain projects before making any more details public. PepinNini and another small uranium play, Alliance Resources Ltd., confirmed they'd recently talked to Chinese interests.

Australia's resources minister Martin Ferguson said on a visit to Beijing earlier this year that Australia should expand uranium production and increase exports to China. Importantly, Ferguson also indicated the government's openness to Chinese investment in the Australian uranium sector.

An official from CGNPC unit China Uranium Development Co., which is making the offer for Energy Metals, declined to comment.

The China Railways Materials deals require Australian government approval.

-Ross Kelly, Dow Jones Newswires; 61-2-8235-2957; ross.kelly@dowjones.com