Kazakhstan "categorically repudiates certain news media reports alleging Kazakhstan's connection to a possible deal to supply uranium to the Islamic Republic of Iran," the country's foreign ministry said in a statement.

The government "considers them groundless insinuations damaging the reputation of our country."

The strident denial came a day after the United States, reacting to media reports that a deal between Kazakhstan and Iran was close to being sealed, warned that such a transfer was prohibited under UN sanctions on Iran.

"The transfer of uranium to Iran is prohibited, unless the uranium in question is low enriched and the uranium is incorporated in assembled nuclear fuel elements for use in light water reactors (LWRs)," US State Department spokesman Ian Kelly said in Washington.

Concern over Iran's nuclear plans is again rising and on Tuesday Washington warned Tehran that December was "a very real deadline" to accept a UN-drafted deal to swap enriched uranium for nuclear fuel or face more sanctions.

The United States and some other Western countries suspect Iran is seeking to develop nuclear weapons under the guise of a civilian nuclear power program.

Tehran adamantly denies this, saying its nuclear programme is strictly for the production of energy.

Kazakhstan, which on January 1 becomes the first ex-Soviet republic to take the helm of the Organisation for Security and Cooperation in Europe (OSCE), stressed that it is committed to international nuclear non-proliferation rules.

"Kazakhstan is firmly committed to the principles of nonproliferation of weapons of mass destruction and tough control over the turnover of dual use materials," the foreign ministry statement said.

It noted that Kazakhstan had renounced the world's fourth-largest nuclear and missile arsenal -- a stockpile it inherited from the days it was part of the Soviet Union -- and had shut down its Soviet-era nuclear test site.

The Central Asian state also called on the Vienna-based UN nuclear watchdog, the International Atomic Energy Agency (IAEA), to weigh in publicly on the reports saying Kazakhstan was to ship uranium to Iran.

"Kazakhstan expects the IAEA to give an appropriate assessment of the information being disseminated by the news media," the statement said.

It said all operations involving nuclear materials, "including our cooperation regarding peaceful use of atomic energy with foreign countries, are subject to IAEA comprehensive safeguards."

Separately, Kazakhstan said Wednesday it had become the world's largest producer of uranium, overtaking Canada, after it increased production by 63 percent in 2009 compared to last year.

Kazatomprom said in a statement it had mined 13,500 tonnes of the radioactive metal as of December 21 and will have mined at least another 400 tonnes by year's end.

Citing the Ux Consulting Company, a US nuclear consulting company, the statement said Canada was expected to produce 9,934 tonnes of uranium and Australia 8,022 tonnes this year.

Kazakhstan plans to increase production to 18,000 tonnes in 2010, Nurlan Ryspanov, Kazatomprom vice-president said in a statement.

"The republic will gain the leading position in uranium mining at the time of maximum demand for it," Ryspanov said.

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