ICL to cover major costs for Dead Sea cleanup

Tel Aviv—Israel Chemicals Ltd. (ICL) has signed an agreement with the Israeli government to cover the majority of the cost for removing the excess salt from its Dead Sea evaporation ponds. The move is expected to cost the company $1 billion over the next decade. An initial understanding was reached between the company and its Dead Sea Works (DSW) subsidiary and the Israeli Finance Ministry in January. Potash is extracted from the evaporation ponds, and the removal of the excess salt is necessary in order to protect the nearby hotels. ICL is planning to build a massive conveyor belt system to handle the huge amounts of salt that need to be removed and deposited at the northern end of the Dead Sea. The agreement also calls for a 10 percent royalty on potash sales exceeding 1.5 million mt/y. Prior to the agreement, DSW paid the government 5 percent in royalties and 10 percent on sales exceeding 3 million mt/y. Any budget overruns are to be covered by DSW. Meanwhile, the Finance Ministry made clear that the change in the royalty payments would not impact the dispute between ICL and the government regarding underpaid royalties from previous years. The Finance Ministry believes it is owed $150 to $200 million – ICL disagrees. The matter is currently in arbitration.