The International Atomic Energy Agency has confirmed fresh construction at Iran's buried Pickaxe Mountain tunnel complex near Natanz, based on satellite imagery. The finding landed the same day the IAEA's Board of Governors referred Iran to the UN Security Council for non-compliance, the first such referral in two decades.
The IAEA has confirmed construction activity at Pickaxe Mountain, a deeply buried tunnel complex roughly 2 km south of Iran's main uranium enrichment plant at Natanz. Director General Rafael Grossi announced the findings on September 10, citing satellite imagery of fresh building work at the site.
Its timing lines up with a bigger diplomatic shift. On the same day, the IAEA's Board of Governors voted to refer Iran to the UN Security Council for non-compliance with nuclear safeguards — the first such referral in two decades.
Inside Pickaxe Mountain
Pickaxe Mountain, known in Farsi as Kuh-e Kolang-e Gazela, is an underground tunnel complex with hardened portals and chambers considerably deeper than those at the known Fordow facility. The IAEA has never been inside it; Iran has refused inspectors access for years, so the agency's knowledge of current activity comes entirely from overhead imagery.
Construction at the site accelerated after 2020, when sabotage attacks destroyed an above-ground centrifuge workshop at Natanz, pushing activity underground. The Center for Strategic and International Studies identified a surge in construction activity at Pickaxe Mountain throughout 2026, noting unprecedented levels of road activity around the site, while the Institute for Science and International Security has flagged increased portal hardening and expanded security perimeters.
A Security Council referral with a two-decade gap
The Board's referral marks a major shift: the last one, over two decades ago, eventually led to the sanctions regime behind the 2015 nuclear deal. Iran's non-compliance has deepened since June 2025, when military strikes disrupted the IAEA's verification efforts at Iranian nuclear sites, leaving the agency unable to verify enrichment levels, stockpile sizes, or the purpose of new construction.
That gap matters because Iran has already demonstrated the technical capability to enrich uranium to 60% purity, a short technical step from the 90% needed for a weapon. The referral opens the door to new sanctions, though Russia and China, both permanent Security Council members with veto power, have historically been reluctant to back aggressive measures against Tehran.
Energy market stakes
Iran sits on some of the world's largest proven oil reserves, so any tightening of sanctions or military confrontation in the region could squeeze supply at a time when energy markets remain sensitive to geopolitical risk. Underground facilities built to survive airstrikes narrow the window for any military option as construction progresses.
Source: Crypto Briefing
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