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TEHRAN (Reuters) - Iran's newly launched 20 percent nuclear fuel production is going "very well," the Islamic Republic's Atomic Energy Organization chief told Reuters in an interview on Thursday.

Ali Akbar Salehi also said Iran had the capacity to enrich uranium up to a level of 100 percent -- above the level experts say is needed for a bomb -- but he said the country had no intention of refining the material to that level.

"There is no limit on enrichment. We can enrich up to 100 percent ... We have this capacity and capability. But we never had the intention and we do not have the intention to do so, unless we need (to)," Salehi said.

Salehi said Iran's production of 20 percent nuclear fuel, which it says started on Tuesday, would be limited to the needs of a Tehran medical reactor of around 1.5 kg per month.

He also said Iran will have "good news" on improved nuclear enrichment centrifuges in coming months, adding the construction of new enrichment sites would start from March.

"Hopefully, in the upcoming Iranian year (starting in March), we will be starting construction of one or two sites."

Iran has one enrichment plant in operation.