Thousands of centrifuges are to be installed in an underground facility next month by Iran, paving the way to large-scale uranium enrichment, the head of the United Nations nuclear watchdog agency said Friday.

Speaking on the sidelines of the World Economic Forum in Davos, Switzerland, Mohamed ElBaradei said: "I understand that they are going to announce that they are going to build up their 3,000-centrifuge facility … sometime next month."

Iranian security person walks in the Uranium Conversion Facility just outside the city of Isfahan, 410 km south of Tehran, in this March 30, 2005, photo. The facility reprocesses uranium ore concentrate into gas, which is taken to Natanz and fed into centrifuges for enrichment.
(Associated Press/Vahid Salemi)

Uranium enrichment in a centrifuge is a process that spins uranium gas into enriched material to create fuel for nuclear plants or material for a warhead.

While ElBaradei didn't give more details, UN officials speaking on condition of anonymity emphasized Iran hasn't officially said it would start building what will initially be 3,000 centrifuges at an underground facility, Natanz.

But they said senior Iranian officials have informally told the International Atomic Energy Agency the work would begin next month.

Iran's goal is to have 54,000 centrifuges in its nuclear program, which it said is for energy purposes.

Washington believes Tehran is developing nuclear weapons under the cover of a nuclear energy program. Last month, the UN slapped sanctions against Tehran after officials refused to suspend uranium enrichment.

Any start of underground installations at Natanz would likely escalate the conflict between Tehran and world powers over its refusal to suspend enrichment.

With files from the Associated Press