Iran now controls the entire cycle for producing nuclear fuel with the opening of a new facility to produce uranium fuel pellets, the Iranian president said Saturday.

Mahmoud Ahmadinejad made the speech two days after the inauguration of the facility which produces uranium oxide pellets for a planned 40-megawatt heavy-water nuclear reactor near the town of Arak, central Iran.

Production of nuclear fuel pellets is the final step in the long, complicated chain of nuclear fuel cycle. The U.S. and its allies have expressed concern over Iran's developing nuclear program for fear it masks a nuclear weapons program — a charge Iran denies.

Heavy-water reactors use a different process than light-water ones, but have their own nuclear proliferation concerns. The West fears Iran could eventually reprocess spent fuel from the heavy-water reactor to produce plutonium for a warhead.

"Today, with the grace of God, Iran is a country controlling the entire nuclear fuel cycle," Ahmadinejad said on state television.

Ahmadinejad has announced several times in the past that Iran has the knowledge necessary to produce its own fuel, but with the opening of the new facility, the Islamic republic says it now has the capability on a industrial scale.

Heavy-water reactors do not need enriched uranium for fuel and instead uses the more easily produced uranium oxide pellets.

To produce the enriched uranium for the more powerful light-water reactors, Iran's scientists would need to change the facility's technical specifications — something they eventually plan to do.

Iran has also been making strides in its effort to enrich uranium. On Thursday, officials said the number of centrifuges at Iran's uranium enrichment facility in Natanz, central Iran, have increased to 7,000 — up from 6,000 announced in February — and that a new, more advanced type of centrifuge had been tested.

Highly-enriched uranium, however, can also produce a nuclear bomb, something that has the West very concerned. Iran maintains its program is strictly to make energy.

Ahmadinejad said the next step for Iran is to achieve proficiency in building nuclear power plants without help from foreign countries.

Iran is putting the finishing touches on a nuclear power plant with Russian help in Bushehr, in southern Iran, but the uranium fuel to power it is imported. Tehran also plans to build a 360-megawatt light-water nuclear power plant in Darkhovin, in the southwestern Khuzestan province, which it will power with its own fuel.

"With the construction of (indigenous) nuclear power plants, all of Iran's nuclear energy needs will be met locally," Ahmadinejad said.

Iran says it wants to produce its own fuel because it feels it cannot always rely on importing it from foreign countries.

Iran has rejected U.N. resolutions demanding it halt its uranium enrichment program, saying it will never give up its right to enrich uranium and produce nuclear fuel under the Nuclear Nonproliferation Treaty.

Iran has its own uranium mines and is already extracting uranium ore from the Gachin uranium mine in southern Iran where a mill turns it into uranium ore concentrate, known as yellowcake.

The yellowcake is then taken to the uranium conversion facility outside Isfahan, central Iran, where it is finally processed into UF-6, or uranium gas, the feedstock for uranium enrichment. The gas is then taken to uranium enrichment plant near Natanz, another town in central Iran, where it is enriched.

The enriched uranium is finally taken back to Isfahan where it will be turned into fuel pellets used by the reactors to produce electricity.