"Most of the equipment of the Isfahan factory has been built by Iranian scientists and it is 70 percent operational at the current time," said Mohammad Ghanadi, in charge of activities related to the combustion cycle at Iran's atomic agency.

"After the end of cooperation with the Chinese, we grouped together our scientists and in less than four years we managed to complete the construction of these installations," he said in comments broadcast on state television.

"The installations in Isfahan cover a space of 60 hectares (150 acres) and have 60 units and 15,000 machine tools, most of which were built by Iranian experts," he added.

The Isfahan facility should allow Iran to convert uranium yellow cake into uranium hexafluoride, a gas used in the centrifuges that are employed to enrich uranium.

Depending on the level of purification, enriched uranium can be used either as fuel for a civilian reactor or as the explosive core of a nuclear bomb. Iran insists it only wants to generate electricity.

Ghanadi also revealed that Iran was "prospecting in most regions of the country to find uranium mines", and said that four such mines had already been discovered.

"We hope that we will be able to exploit the mine in Saghand (central Iran) from the second quarter of 2005," he said.

On Thursday European countries had asked Iran to suspend the activities of the Isfahan factory as they offered a deal to Tehran to halt uranium enrichment activities in exchange for technical assistance.

On September 18, the UN nuclear watchdog - the International Atomic Energy Agency (IAEA) - passed a resolution calling on Iran to suspend all parts of the nuclear fuel cycle, including conversion activities at its Isfahan facility.

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