"The West had counted on the possibility of us being in trouble over raw material but today we had the first batch of yellowcake from Gachin mine sent to Isfahan (conversion) facility," Salehi said on state television.

Conversion is the process by which yellowcake is converted into uranium hexafluoride for enrichment.

The atomic chief said the new step made Iran "self-sufficient" in the entire nuclear fuel cycle as it had previously been obliged to import yellowcake from abroad but he declined to reveal the amount of the first domestically produced batch.

"We cannot cover the overall need of the Isfahan facility but we will produce a significant part of it" from the Gachin mine near the Gulf port city of Bandar Abbas, Salehi said.

He said Iran would formally notify the International Atomic Energy Agency of its yellowcake production.

The announcement came as Iran is poised to hold a new round of talks with world powers on its controversial nuclear programme in Geneva on Monday.

Uranium enrichment lies at the heart of Western concerns about Iran's nuclear activities as the process can produce fuel for nuclear reactors or in highly extended form the fissile core of an atom bomb.

Iran denies seeking a weapons capability but has pressed on with uranium enrichment in defiance of repeated UN Security Council ultimatums.

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