By Yeganeh Torbati and Fredrik Dahl
DUBAI/VIENNA (Reuters) - Iran said on Tuesday operations had begun at two uranium mines and a milling plant and that Western opposition would not slow its nuclear work, days after talks with world powers made no breakthrough.
Marking its annual National Nuclear Technology Day, Iran also said it would continue to need higher-grade enriched uranium - the part of its atomic activity that most worries the West - to fuel additional research reactors it plans to build.
The United States and its allies want Iran to stop refining uranium to a fissile concentration of 20 percent as it represents a relatively short technical step away from potential bomb material. Iran says it uses it to produce medical isotopes.
"We have started the design of a 10-megawatt reactor and the process for determining the location is under way," Iranian atomic energy chief Fereydoun Abbasi-Davani said, ISNA news agency reported. Construction may start this year, he added.
The Islamic state has made similar statements before but his comments underlined its continued defiance of international demands to curb its disputed uranium enrichment program, which can have both civilian and military purposes.
Talks between Iran and six world powers held in Kazakhstan last week failed to make progress in resolving a decade-old dispute that threatens to trigger a new war in the Middle East.
Western nations have "tried their utmost to prevent Iran from going nuclear, but Iran has gone nuclear," Iranian President Mahmoud Ahmadinejad said in a speech.
"They caused restrictions and issued threats, thinking that the Iranian nation cannot achieve nuclear energy ... The best way for you is to cooperate with Iran," he said.
State news agency IRNA said Iran had opened the Saghand 1 and 2 mines in the central province of Yazd and a uranium yellowcake plant in the town of Ardakan in the same region.
Yellowcake can be further processed into enriched uranium to make fuel for nuclear power plants, Iran's stated aim, or to provide material for atomic bombs if refined much more, which the West fears may be the Islamic Republic's ultimate goal.
NOT ENOUGH URANIUM?
The office of European Union foreign policy chief Catherine Ashton - who represents the United States, Russia, China, Germany, Britain and France in dealings with Iran - said it was no surprise Iran made such announcements on its nuclear day.
"We urge Iran to bring its nuclear activities into compliance with its international obligations," her spokesman Michael Mann said.
Iran denies Western accusations that it is seeking a nuclear weapons capability. It often announces technical advances in its program, but these can be difficult to verify independently, Western experts say.
Iran has for years carried out construction work at Saghand and Ardakan, and Tuesday's announcement was apparently intended to show that it is becoming increasingly self-sufficient in the production of nuclear fuel, despite tightening sanctions.
Some Western analysts, however, say Iran may be close to exhausting its supply of yellowcake - or raw uranium - and that such mining in the country is not economical.
Iran has said its mines can supply the uranium ore needed for its nuclear program and that it has no shortage problems.
The Ardakan plant will handle the ore from Saghand and can produce 60 tonnes of yellowcake annually, IRNA said.
The International Institute for Strategic Studies (IISS) said the Saghand deposits had been discovered in 1985.
But because of the depth of the deposits and the ore's low uranium content "the cost of yellowcake produced from the Saghand mine is likely to exceed current world market prices several times over," the think-tank said in a 2011 report.
As of mid-2010, ISIS said appeared that all Iran's uranium mining and milling had been carried out at another mine, Gchine.
A report published last week by U.S. think-tanks Carnegie Endowment and the Federation of American Scientists said the scarcity and low quality of Iran's uranium resources compel it "to rely on external sources of natural and processed uranium".
It added: "Despite the Iranian leadership's assertions to the contrary, Iran's estimated uranium endowments are nowhere near sufficient to supply its planned nuclear program."
(Additional reporting by Justyna Pawlak in Brussels; Editing by Jon Hemming)