January 17, 2017 / 1:54 PM / a year ago

Israeli official opposes extension to ICL's Dead Sea mining permit

JERUSALEM, Jan 17 (Reuters) - Israel Chemicals’ (ICL) permit to mine in the Dead Sea should not be extended when it expires in 2030 but instead the rights should be put up for sale by tender, a senior Finance Ministry official recommended on Tuesday.

“Holding a tender is the correct way to maximise the public’s share of the Dead Sea’s natural resources,” Accountant-General Michal Abadi-Boiangiu wrote in a letter to the ministry’s chief economist, who heads a committee that will decide on the fate of the Dead Sea rights.

ICL, one of Israel’s largest companies and a key supplier of potash to China, India and Europe, has exclusive permits in Israel to extract minerals from the Dead Sea.

It had revenue of $4 billion over the first nine months of 2016, although its profits have suffered due to a sharp decline in potash prices.

Abadi-Boiangiu’s letter comes as a surprise since there have been talks between the two sides on extending the concession. She said, however, that ICL would still receive priority in the tender.

Shares in ICL were down 2.3 percent in afternoon trading in Tel Aviv, compared with modest declines in the broader market. The company declined to comment.

Abadi-Boiangiu ends her term at the end of the month and will be succeeded by Rony Hizkiyahu.

ICL has battled the state over plans to heavily tax mining companies and has frozen about $2 billion of investments in Israel while expanding operations abroad.

ICL competes with Russia’s Uralkali and North American trading group Canpotex Ltd, owned by Potash Corp of Saskatchewan, Mosaic Co and Agrium Inc .

Potash Corp owns a 13.8 percent stake in ICL. It sought to expand its holdings but was rebuffed by Israel’s government, which holds a golden share in the company. (Editing by Greg Mahlich)

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