Iran has neared completion of a uranium production facility that could be used for the assembly of nuclear weapons.

Iranian officials said they were in the last stage of completing a uranium ore concentrate production plant. They said the facility, located near the southern port city of Bandar Abbas, would begin operations by 2006.

The Bandar Abbas Yellowcake Production Plant was disclosed by the Iranian opposition in October 2004. The National Council of Resistance of Iran has uncovered several secret nuclear sites, later acknowledged by Teheran, Middle East Newsline reported.

Iran has already begun the mining of uranium, the first stage in the production of nuclear material, officials said.

The IAEA referred to the Bandar Abbas site in its report to the board of governors in November 2004. The report said the site was next to the Gehine uranium mine.

After the uranium is mined, it would be processed into uranium ore concentrate. At that point, the concentrate is turned into uranium hexaflouride, used in gaseous form as feedstock for the enrichment of uranium.

In November 2004, Iran reached an agreement with the European Union for the suspension of uranium enrichment. Officials said the Iranian decision would be reviewed in April.

The Bandar Abbas facility would process ore extracted from uranium mines into uranium ore concentrate, officials said. The processing of the ore, also known as yellowcake, precedes the production of enriched uranium through gas centrifuges.

Iranian Atomic Energy director Gholamreza Aghazadeh said the facility, termed the Bandar Abbas Yellowcake Production Plant, would begin operations during the next Iranian calendar year. The year begins March 21.

[In Teheran, Iranian officials have formally protested through Swiss diplomatic channels the United States's invasion of its airspace, the Washington Post reported on Sunday. The daily reported that three U.S. officials confirmed that the Bush administration has been flying surveillance drones over Iran for close to a year in an effort to gather evidence of nuclear weapons programs and detect weaknesses in air defenses.[

Officials said Iran has sought to complete the nuclear fuel cycle in an effort to avoid dependence on foreign suppliers.

After the uranium is mined, it would be processed into uranium ore concentrate. At that point, the concentrate is turned into uranium hexaflouride, used in gaseous form as feedstock for the enrichment of uranium.

In November 2004, Iran reached an agreement with the European Union for the suspension of uranium enrichment. Officials said the Iranian decision would be reviewed in April.

"The low but variable grade uranium ore found in near-surface deposits will be open-pit mined and processed at the associated mill," the IAEA report said.

On Sunday, Iran rejected a European demand to stop building a heavy-water nuclear reactor and Teheran said it will not replace it with a light-water reactor. Both plants can be used to enrich uranium but the extraction of weapons-grade material from a light-water reactor is more difficult.