The companies recently inked the deal at the OEM's headquarters in Xuzhou, China.
Under the terms of the agreement, both will be exploring opportunities to integrate the Rolls-Royce MTU power and propulsion systems - including MTU Series 2000 and 4000 engines - into XCMG equipment for projects inside and outside of China.
The end goal is to utilise both groups' business insights for enhanced product competitiveness and a boosted share of the market.
Rolls-Royce and XCMG also have agreed to work together to validate and test new power and propulsion technologies. This includes gas engines, hybrid solutions and applications of digital technologies, all needed for mining's low-carbon, sustainable future.
"I am confident that the agreement will allow better integration of MTU products and services into XCMG equipment, to achieve higher efficiency and optimised support to customers," RRPS Greater China president Tobias Ostermaier said.
"It will also enable collaboration at different levels across each of our organisations to deliver highly completive and compelling offers to the market."
XCMG is currently the largest market player in the Chinese construction and industrial sector and is the sixth largest firm in the world's construction machinery industry.
German-headquartered Rolls-Royce Power Systems confirmed it has been supplying MTU S2000 and S4000 diesel engines to power XCMG's mining trucks, ranging from 120 to 400 tonnage, since 2012.
