Management of Israel Chemicals Ltd. (TASE: ICL) unit ICL Fertilizers (Rotem Amfert Negev) will not procure a new mechanical shovel for mining phosphates at Mishor Rotem, because it is not worthwhile. The company's shovel broke down after more than 20 years in use, and the company has hired Taavura Holdings Ltd. as a contractor to operate an alternative shovel.
The decision not to make a long-term investment of tens of millions of shekels to buy a new mechanical shovel led to work disruptions by IC Fertilizers employees at Mishor Rotem. Regular work only resumed on Tuesday, when the Beersheva District Labor Court ordered management and employees to discuss the issue over the coming month.
IC Fertilizers estimates the cost of a mechanical shovel for mining the rock from which the phosphates are extracted at $10 million. The 700-ton shovel can dig 40 tons of rock at one scoop. It is 17 meters high and 11 meters long, carries a crew of 25, with dozens more employees responsible for maintenance.
"The shovel has been broken for months, and ten of the employees who work with it have retired. Management has not hired replacements," IC Fertilizers workers committee chairman Moshe Hadad. "We recently learned that there are no plans to resume work by the shovel or to buy a new one. We demand that management buy or lease an alternative shovel, which the employees will operate."
An IC Fertilizers executive said today, "The case of the shovel represents the company's dilemma about any large long-term investment, mainly because of the uncertainty over future phosphates mining at Sde Barir. If we have no assurance that we will use the shovel for a long time, there is no economic justification to buy it. The shovel is a small problem for the workers."
Israel Chemicals has been fighting to obtain a permit to mine phosphates at Sde Barir, located eight kilometers from Arad. It estimates that phosphates at Mishor Rotem will be exhausted within a decade. But Arad residents oppose mining at Sde Barir, and they are supported by an opinion that the mining is a health hazard for them. Minister of Health Yael German refuses to allow mining at Sde Barir, and Israel Chemicals is threatening to move its phosphates business abroad, which will jeopardize the jobs of IC Fertilizers' 1,200 employees.
Published by Globes [online], Israel business news - www.globes-online.com - on July 31, 2013
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