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A North Korean foreign ministry spokesman said in a statement that the country had "successfully finished" removing 8,000 fuel rods from the reactor at its Yongbyon nuclear complex, which was shut down last month, so it can "bolster its nuclear arsenal."
North Korea kicked out international nuclear inspectors in late 2002, making it impossible to verify the claim.
South Korean media reported that reprocessing the spent rods could yield enough plutonium for about two nuclear bombs. To get the plutonium, the rods would first need to cool for a couple of months and then be reprocessed, which takes the same amount of time.
Six-country talks aimed at getting North Korea to give up its nuclear ambitions have been stalled for almost a year, with the country insisting it won't return until Washington drops its "hostile" policy. North Korea says the United States is planning an invasion, a claim Washington denies.
North Korea — which says it already has at least one atomic weapon — is boosting its arsenal "for the defensive purpose of coping with the prevailing situation," the unidentified foreign ministry spokesman said.
South Korea's foreign ministry expressed "serious concern" at the development.
The North Korean announcement came as another nuclear dispute moved a step closer to possible United Nations action.
Iran is expected to notify the U.N. within days that it is resuming sensitive nuclear work, almost certainly killing off crucial talks with the European Union, a European diplomat told Reuters recently.
The collapse of the EU negotiations with Iran on its atomic ambitions would likely bring the controversy over the country's nuclear program to the U.N. Security Council for possible sanctions or other actions.
The U.S. believes Iran's nuclear energy program is a cover for atomic weapons development and has been pressing for Iran's case to be sent to the 15-member U.N. council. Iran says its program is intended only to fuel power plants, not for arms.
"The Iranians are expected to notify the International Atomic Energy Agency by the end of the week that they are resuming preparations to enrich uranium," the diplomat said, referring to the U.N. nuclear watchdog. Enrichment is a process of purifying uranium for use in power plants or weapons.
In another development, Russia plans to start shipments of enriched uranium fuel to Iran late this year or early next year to start up a nuclear power plant there, a top Russian nuclear official was quoted as saying.
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