Iran acknowledged Thursday that it plans to process tons of raw uranium, but said the U.N. nuclear watchdog was informed long ago and accused Washington of sensationalizing the matter.

The International Atomic Energy Agency (search) said in a report obtained Wednesday by The Associated Press that Iran plans to process more than 40 tons of uranium into uranium hexafluoride gas. Experts said the amount was enough for four or five warheads.

The U.N. report did not specify what plans Iran had for the material, which is spun in centrifuges to produce enriched uranium. This can then be used to generate electricity or make nuclear warheads, depending on the degree of enrichment.

Ali Akbar Salehi, a senior adviser to Iran's Foreign Minister Kamal Kharrazi, said Thursday that Iran's plans were not a secret. "This is the information Iran provided to the IAEA a long time ago," he told the AP.

In response to what he called Iran's concerted effort to make nuclear weapons, Secretary of State Colin Powell (search) said Wednesday that Washington would urge the U.N. nuclear agency at its board meeting this month to refer the Iranian case to the U.N. Security Council for possible sanctions.

Iran denies the allegation and insists its nuclear program is geared only toward producing electricity, not a nuclear bomb.

Salehi, Iran's former envoy to the Vienna, Austria-based IAEA, said Iran's uranium conversion facility in Isfahan, in central Iran, has a capacity of converting more than 300 tons of uranium ore into hexafluoride gas annually.

"The agency knew the capacity of the facility before it was built. The facility is under IAEA safeguards," he said.

He said the capacity of Iran's uranium enrichment plant in Natanz was 30 tons per year. The facility in Natanz uses centrifuges to enrich uranium hexafluoride gas and turn it into pellets that are then used as fuel in nuclear reactors.

The Isfahan facility was inaugurated in March, but last year Iran suspended uranium enrichment in Natanz as a confidence-building gesture toward the international community.

A senior diplomat in Vienna, speaking on condition of anonymity Wednesday, said any uranium hexafluoride Iran produces "could be the feed stock for Natanz."

Iran says it wants to control the whole nuclear fuel cycle, from extracting uranium ore to enriching it to be used as fuel in nuclear reactors, to avoid dependence on international suppliers.

Iran plans to produce 7,000 megawatts of electricity by 2021 through nuclear energy. Salehi said Natanz will be able to meet the fuel needs of only one reactor, meaning Iran will have to buy fuel for the rest of its reactors from the international market.

He said extraction of uranium and converting uranium ore into hexafluoride gas was entirely legal, legitimate and under the safeguards of the IAEA.

"Iran has opened its facilities to adequate IAEA inspection, is already implementing the Additional Protocol and intrusive inspections. Technically speaking, there is no way Iran's nuclear program will be diverted toward making bombs," Salehi said.

Salehi, who holds a doctorate in nuclear engineering from the Massachusetts Institute of Technology, said the enrichment equipment in Natanz, once it becomes operational, can't enrich uranium beyond 5 percent, which can only be used to produce fuel.

"To produce a bomb, you need vast facilities, including thousands of advanced centrifuges, cascaded in a special pattern, to work for a long time to produce enough weapons-grade enriched uranium. The equipment in Natanz can't do that, and IAEA cameras there watch the facility 24 hours a day," Salehi said.

However, David Albright, a former IAEA nuclear inspector, said "enrichment technology is easy to switch" to allow the manufacture of highly enriched, or weapons-grade uranium from centrifuges that are set up to make low-enriched uranium, used in nuclear fuel.

While Iran does not have the 1,500-2,000 operating centrifuges needed to make enough weapons-grade uranium for one nuclear bomb in a year, it is thought to have several hundred.

That would slow the process over years, but does not mean there are not enough centrifuges — just that it would take a longer time to make highly enriched uranium suitable for a bomb, said Albright, who now heads the Washington-based Institute for Science and International Security.