Cargo ships being constructed by CSC Jinling Shipyard in Nanjing, Jiangsu Province. Photo: CFP

A Chinese State-owned shipbuilding company has confirmed it has signed a preliminary agreement with an Australian mining tycoon to build a new Titanic.

The 58-year-old billionaire Clive Palmer announced Monday that he had signed a memorandum of understanding with the Nanjing-based CSC Jinling Shipyard to build Titanic II.

The ship's maiden voyage from England to North America has been scheduled for late 2016, the Australian Associated Press (AAP) reported.

According to Palmer, the new ship will be as big and luxurious as the original Titanic, which had nine decks and 840 rooms and sank on its maiden voyage in April 1912 after hitting an iceberg.

However, unlike that vessel, the new ship will be powered by diesel engines and its four giant chimneys will serve a decorative purpose only.

Palmer added that he plans to build three more cruise ships with CSC Jinling Shipyard.

When asked if the new Titanic would sink, Palmer said: "Of course it will sink if you put a hole in it, but it's not going to be designed with a hole."

"It will be designed as a modern ship with all the technology to ensure that does not happen," he added. "But of course if you are superstitious, you will never know what could happen."

However, the Nanjing-based company, which is operated by Sinotrans & CSC Holdings Co Ltd, said no contract had yet been signed for the project.

"Indeed, we signed a preliminary agreement with Palmer on April 20 to build Titanic II," a staff member surnamed Li with the publicity department of the Chinese company told the Global Times yesterday.

"But the formal contract has not been signed and the details also need further discussion," Li added.

Li Wenbao, an official with the shipyard, also confirmed the signing of a preliminary agreement to the Xinhua News Agency yesterday.

CSC Jinling is still negotiating over price with Palmer and no start date for construction has been fixed.

"I am not sure whether the shipbuilding will be completed in 2016," Li said.

Ni Yonghua, CSC Jinling's deputy general manager, was quoted by jschina.com.cn as saying that the company's business department had not received any orders for construction from the mining magnate.

The department has contacted Palmer, Ni said, but an agreement remains some way off.

Ni could not be reached by the Global Times as of late yesterday.

Lin Guolong, a logistics professor at Shanghai Maritime University, told the Global Times that construction of Titanic II may still be a long way off.

Chinese ship companies have much more experience in building cargo ships than cruise ships, Liu said.

"Besides, the requirements for cruise ships are much stricter than before to ensure passenger safety, so the construction work for Titanic II will not only need a large sum of money but must also meet current regulations," said Lin.