Tehran:  Iran said on Tuesday it has discovered higher uranium reserves than previously thought at a key southern mine and was stepping up exploration of the ore - which is the basis for the country's nuclear program - across the nation.

Nuclear chief Ali Akbar Salehi said the new reserves were found at Iran's only operating uranium mine near Bandar Abbas in southern Iran, 1,340 kilometres south of the capital, Tehran.

He said "exploration and extraction of uranium ore is being conducted simultaneously," which "gives life to the Bandar Abbas mine by several more years."

Salehi, who is one of Iran's vice presidents, said the government has also provided funds to begin ore extraction at Saghand, the mine with largest uranium reserves in the country. Saghand has not yet become operational.

UN sanctions ban Iran from importing any nuclear material, which has forced Tehran to focus on domestic uranium reserves.

The US and some of its allies accuse Iran of using its civilian nuclear program as a cover to develop nuclear weapons.

Iran has denied the charges, saying its nuclear program is geared merely toward peaceful purposes such as generating electricity and producing nuclear medical radioisotopes for medical use - not atomic bombs.

Iran has consistently denied running short of uranium ore needed to sustain its ambitious nuclear program, although Western reports since 2009 have said Iran's stockpile could be exhausted within months.

Processed ore, or uranium concentrate - known as "yellowcake" - is subsequently converted into a uranium gas, which is then spun and re-spun to varying degrees of enrichment. Low enriched uranium is used for nuclear fuel, and upper-end high enriched uranium for nuclear weapons.

"We have expanded our exploration activities," Salehi was quoted as saying by the ISNA news agency. "We have divided the country into several regions and have focused on places where there are hopes of greater uranium reserves."

Saghand's known reserves are estimated at 1.73 million tons of medium quality ore. The mine, about 480 kilometres south of Tehran has a capacity of 132,000 tons of uranium ore per year. It consists of an open pit with minimal reserves and a deep mine nearby. Lack of funds has reportedly delayed ore extraction at the mine.

Salehi said President Mahmoud Ahmadinejad has ordered allocation of funds to allow extraction at Saghand "soon."

Iran also has a considerable stock of yellowcake, acquired from South Africa in the 1970s under the former US-backed shah's original nuclear program, as well as an unspecified quantities of yellowcake obtained from China long before the UN sanctions.

Salehi said the search for more uranium reserves is focusing on central and southern Iran.