TEHRAN -- An agreement on a R6-billion gas-to-liquid project between PetroSA and the National Oil Company of Iran was expected to be signed on Tuesday, the South-African based Star daily reported on its website yesterday.

A further R9-billion investment deal between Sasol and the National Petrochemical Company of Iran for the development of a plastics manufacturing plant in the Persian Gulf is under discussion as well as other joint ventures and investments expected to reach R30-billion in the next few years.

Foreign Minister Nkosazana Dlamini-Zuma said PetroSA and Sasol were in the process of establishing regional offices in Iran and were working with their Iranian partners in "groundbreaking work in the petro-chemical sector".

She said that over the past year, South African mining companies had been assisting with the exploitation of Iranian zinc and manganese deposits.

Iran is a major supplier of oil to South Africa.

In 2001, two-way trade between the two countries was valued at R9-billion but was heavily in Iran's favour due to massive oil exports, only marginally offset by about R300-million in imports from South Africa.

Iranian Foreign Minister Kamal Kharrazi said at the opening of the seventh session of the South Africa-Iran Joint Commission in Pretoria on Monday that much work needed to be done to realise the potential of bilateral and trade relationships.

Kharrazi said Iran and South Africa were both agents of peace and stability in their regions, and their respective presidents had both received global recognition for doctrines based on humanitarian values, justice and equality.

Whereas President Thabo Mbeki was the architect of the African Renaissance philosophy and the Nepad programme, President Mohammad Khatami was the author of the "dialogue of civilisations", which sought to promote peace and denounce racism in all its forms.

Dlamini-Zuma said both countries shared the view that only democracy would bring peace to Iraq, the Middle East, Burundi and the Democratic Republic of Congo.

Dlamini-Zuma said there had been significant Iranian direct investment in the South African economy recently, including a R560-million input by an Iranian housing consortium in a Western Cape housing development and an expanded investment in a project in the Eastern Cape.

But Dlamini-Zuma said the trade balance being heavily skewed in favour of Iran was a "worrying characteristic of our relationship".

She said a South Africa-Iran Business Forum would be set up this week.