Australian miner Uranex has struck a deal with a Chinese battery major – as long as it can get its graphite mine in Tanzania operating.

Uranex has signed a memorandum of understanding (MOU) for an off-take agreement with Chinese conglomerate the National Materials Industry Import and Export Corporation (SINOMA).

State-owned SINOMA would buy 100,000 tonnes of graphite a year for five years with an option for a further five years.

The news pushed Uranex shares three cents, or 15.8 per cent, higher to 22 cents.

The graphite industry is booming through its use as a raw material in rechargeable lithium ion batteries.

SINOMA is involved in the advanced battery industry, where graphite is used to help power major infrastructure such as hospitals and major buildings, solar panels, electric cars, and motorbikes.

It is also involved in a range of other industries, with assets of $US18 billion and annual revenues of $US12 billion.

“It’s encouraging to have the likes of SINOMA contacting the Uranexes of the world after graphite,” Uranex non-executive director Frank Poullas told AAP.

“Demand is huge at the moment.”

Mr Poullas said the passing of laws by the US government to tackle climate change and the shutting of some Chinese graphite mines were driving rising graphite and battery demand.

Uranex would now provide bulk graphite samples from its Nachu project to SINOMA with the aim of securing a binding supply contract with the company.

It hopes to have a 200,000 tonne a year mine operating and says it is fielding offers from other potential partners.