Israel Chemicals to set up special salt harvesting co

The Finance Ministry and Israel Chemicals are still arguing about the company's share of the 20-year NIS 4 billion salt harvesting project.

Israel Chemicals Ltd. (TASE: ICL) will set up a designated company to harvest the salt in the southern basin of the Dead Sea as part of the region's rehabilitation. The company is still in talks with the government over the financing of the rehabilitation.

The designated subsidiary will create the infrastructure for the salt harvesting, including procurement of the dredge, construction of the conveyor belt that will carry the dredged salt to the northern basin, and procurement of a dredge for the northern basin which will bury the salt.

Israel Chemicals has said that the project is unprecedented. A source at the company said that the CEO of the subsidiary should be a "person of stature who knows how to manage complex engineering projects." The source added, however, "Nothing has been finalized and there is no operative plan yet to be sent to Israel Chemicals' board for approval. This is a good plan, just as there are several other plans and ideas for handling the salt harvesting, which is likely to become an insanely huge project."

The Ministry of Finance and Israel Chemicals and its subsidiary Dead Sea Works are still arguing about the company's share of the salt harvesting project, which is estimated to cost NIS 4 billion over 20 years. There has been considerable progress in the talks in the past few weeks, after the parties agreed that the company would bear no more than 70% of the cost. Israel Chemicals originally offered to cover 40% of the cost.

In exchange for bearing the bulk of the cost, Israel Chemicals is asking the government for the right to expand its industrial operations at the Dead Sea, including construction of a new channel to carry water from the northern basin to the evaporation pools in the southern basin. This channel will cross Wadi Zeelim. Sources say that a deal on this point is likely within weeks.

Published by Globes [online], Israel business news - www.globes-online.com - on November 6, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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