Energy Ministry mulls phosphate export caps - Israel Environment, Ynetnews
 
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Energy Ministry mulls phosphate export caps

Brewing deal between ICL, Potash Corp sparks concerns over Israel's future over phosphate reserves. Special ministry team tasked with reviewing possible limitations

Amir Ben-David
Published: 11.11.12, 07:28 / Israel Environment

The Energy and Water Ministry is contemplating placing a cap on the exports of locally-mined phosphates in order to maintain the country's reserves, Yedioth Ahronoth reported. 

 

Currently, some 95% of Israel's phosphate production is exported.

 

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The ministry formed a team to review the possibility of limiting such exports as part of its plan to increase government supervision over natural resources, and against the backdrop of a possible merger between Israel Chemical (ICL) and Canada's Potash Corp.

 

According to the Wall Street Journal, Potash Corp – which is the world's largest fertilizer maker – is looking into the possibility of acquiring either all, or a part, of ICL.

 

Should negotiations mature into a deal, the merger "would put key state assets into the hands of the fertilizer giant at a time when its production capacity is growing but it needs to find new markets."

 

The possibility of the merger has sparked concerns in the ministry that it may promote increased mining on ICL's part, eventually compromising Israel's own reserves.

 

ICL mines some 7 million tons of rocks a year in its phosphate mines. In 2011, the company's operational revenues came to $220 million.

 

ICL pays the government royalties amounting to $0.73 per ton of raw rock, while phosphates – which make up about 50% of the raw rock – trade at roughly $185 a ton.

 

The team will also review the royalties' policy regarding ICL's phosphate mining operation in the Negev.

 

Researchers believe that the dwindling quantities of quality phosphates worldwide will drive up their prices.

 

The ministry's data predicts that the United States is likely to reach the end of its quality phosphate reserves within 25 years. Europe and India have no independent phosphate sources and China has decreased its output by 25% over the past year alone, as well as imposed various phosphate export levies, in an effort to conserve the valuable resource.

  

The original article appeared in Yedioth's Ahronoth's financial magazine, Mamon

 

 

 

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