China Said to Approve Joining Iran Railway Project

(Corrects spelling of government body’s name in first paragraph in story initially published Feb. 18.)

China’s State Council approved plans to take part in the building of a high-speed railway line in Iran, two people familiar with the matter said.

The project will cost at least $1 billion and the companies participating haven’t yet been set, said the two people, who asked not to be identified because they weren’t authorized to speak publicly about the matter.

China’s decision comes as the U.S., the European Union and their allies have tightened sanctions on Iran for a nuclear program they argue is meant to develop atomic bombs. Iran maintains its program is peaceful.

China and Iran have maintained “normal business cooperation,” Foreign Ministry spokesman Hong Lei told a briefing in Beijing today. China is the biggest buyer of Iranian crude oil.

Current sanctions are costing Iran about $98.9 million a day in lost oil sales, data compiled by Bloomberg show. Iran is to resume stalled multilateral discussions on its nuclear program with the U.S., U.K. France, Germany, Russia and China on Feb. 26 in Kazakhstan. The last round of negotiations between Iran and the group, known as P5+1, failed to yield results.

The U.S. imposed new sanctions earlier this month that would keep importers from paying for oil with dollars and euros.

To contact Bloomberg News staff for this story: Steven Yang in Beijing at kyang74@bloomberg.net

To contact the editor responsible for this story: John Liu at jliu42@bloomberg.net

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An oil industry installation stands in Mahshahr, Khuzestan province, southern Iran.

An oil industry installation stands in Mahshahr, Khuzestan province, southern Iran. Photographer: Kaveh Kazemi/Getty Images