http://abcnews.go.com/wire/World/reuters20030209_214.html

President Mohammad Khatami said on Sunday Iran had mined uranium for nuclear
energy, and insisted its nuclear program was solely for civilian use, the
official news agency IRNA said.
The surprise announcement -- the first time an Iranian leader has
acknowledged possession of uranium ore reserves -- may alarm Washington,
which accuses the Islamic Republic of harboring secret plans to develop
nuclear weapons.

"Iran has discovered reserves and extracted uranium...we are determined to
use nuclear technology for civilian purposes," IRNA quoted Khatami as
saying.

He said the uranium had been extracted near the central city of Yazd and
processing facilities had been set up in the central cities of Isfahan and
Kashan.

Iran, which Washington has labelled a member of an "axis of evil" along with
Iraq and North Korea, insists its nuclear plans are purely for civilian
purposes for its 65 million people.

It has invited inspectors from the United Nations nuclear watchdog agency,
the IAEA (International Atomic Energy Agency), to verify its nuclear
facilities later this month.

In another development, state television quoted Defense Minister Ali
Shamkhani as saying Iran, for the first time, had developed the capacity to
produce composite solid fuels for its missiles.

"This solid fuel could be used for any kind of missile," he said after
inaugurating a manufacturing plant Sunday.

Iran makes middle-range missiles, anti-tank missiles, air- to-surface
missiles and surface-to-surface guided missiles that use composite solid
fuel.

U.S. CRITICAL OF RUSSIAN HELP

Washington, Iran's arch-foe, has long been at odds with Russia over its help
in building an $800 million nuclear power plant at Iran's southwestern port
of Bushehr, which Tehran expects to come on stream at the end of 2003 or
early in 2004.

U.S. fears over the project were somewhat assuaged by assurances from Moscow
that all spent fuel from the plant would be returned to Russia, ensuring
that it would not be diverted to a weapons program.

But the discovery of its own uranium supplies could, in theory, make Iran
independent of Russia for its nuclear fuel needs.

Diplomats said Khatami's announcement stemmed from world pressure to come
clean about the scope of its nuclear program.

"They seem to be making a creeping announcement of what their capabilities
are," said one European diplomat.

The head of the Iranian parliament's Energy Commission, Hossein Afarideh,
told Reuters the extracted uranium, after being processed, could be used as
fuel for the Bushehr power plant.

Iran has signed the Treaty on the Non-Proliferation of Nuclear Weapons and
has said it might build further nuclear power plants to meet its booming
electricity demand.




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