TEHRAN (AFP/Reuters) - Iranian Defence Minister Ahmad Vahidi on Monday opened two production lines for the manufacture of advanced unmanned aircraft or drones, Fars news agency reported. The drones would be able to carry out surveillance, detection and even assaults with high precision, the report said. Iran also says it will start producing higher-grade nuclear fuel on Tuesday and add 10 uranium enrichment plants over the next year in a nuclear expansion sure to stoke tensions with the West. The statement by Irans nuclear agency chief Ali Akbar Salehi on Sunday followed orders from President Mahmoud Ahmadinejad for work to start on producing atomic fuel for a Tehran research reactor. Iran will set up 10 uranium enrichment centres next year, Irans Arabic-language television station al Alam quoted Salehi as saying. The Iranian year starts on March 21. Iran mooted such a plan late last year but gave no time frame. Ahmadinejad also said Iran remained open to a proposed nuclear fuel exchange with world powers, which they hope would minimise the risk of Iran developing atomic bombs. Iran says it wants only to generate electricity from low-level enrichment. Salehi said Iran would start to raise the enrichment level from 3.5 percent to 20 percent on Tuesday, in the presence of inspectors from the International Atomic Energy Agency (IAEA). He said Iran would formally notify the Vienna-based UN agency about the move in a letter on Monday, al Alam reported. He earlier said production would take place at the Natanz site. Meanwhile, a diplomat close to the International Atomic Energy Agency said on Monday in Vienna that Iran has yet to formally inform the UN nuclear watchdog of its plans to enrich uranium to a higher level. As of Monday, the IAEA has not yet been informed of any such plans, a diplomat told AFP, speaking on condition of anonymity. Iran said on Monday it is manufacturing a home-built air defence missile system which would be better than the Russian S-300, which has been ordered by Tehran but yet to be delivered by Moscow. Today, we are building all our air defence weapons by ourselves ... the only thing we wanted to import was the Russian S-300 which so far they have not delivered for some unacceptable reasons, senior airforce commander Heshmatollah Kasiri was quoted as saying by the official IRNA news agency. But our air defence experts and scientists found a way and in very near future we will produce an air defence system which has the capabilities of the Russian S-300 or even more. Kasiris comments come after Iran in late November threatened to take legal action against Russia if it fails to honour a deal to supply Tehran with the S-300, an advanced air defence missile system.