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ICL has held concession for five decades

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Goverment seeking 'rightful share' of asset

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ICL to receive around $3 billion if it loses concession

By Steven Scheer

JERUSALEM, Nov 6 (Reuters) - Fertiliser maker ICL Group

has given up right of first refusal for its Dead Sea

concession under a plan to tender the asset announced by

Israel's government on Thursday, but it will receive some $3

billion if it loses the permit when it expires.

ICL, which extracts mainly potash and magnesium from the

concession, has held exclusive rights to minerals from the Dead

Sea site for five decades, with the permit set to expire in

2030.

The finance ministry, however, said it was preparing for a

"competitive, international and equitable tender ... intended to

ensure the rightful share for the public and the State from this

unique natural resource."

ICL, one of the world's largest potash producers, declined

to comment but has previously said its Dead Sea assets were

worth $6 billion.

Its stock closed down nearly 15% in Tel Aviv on Thursday

while its New York-listed shares were down 16% at 1557

GMT.

ICL TO HAND OVER ASSETS IN 2030 FOR TENDER

Under a deal reached with the government, ICL would transfer

the assets required for full and ongoing operation of the Dead

Sea concession in 2030 in exchange for $2.54 billion plus the

future actual costs of the project, the ministry said.

It could also participate in the tender. And industry

sources believe ICL has a good chance of continuing the Dead Sea

concession.

If not, it could use the $3 billion from the state to expand

and strengthen other areas of its business such as advanced

agriculture, phosphate, bromine, and flame retardants, the

sources said.

ICL was initially founded as a state-owned firm called

Israel Chemicals but was later partially privatised. In 1975, it

bought Dead Sea Works, which had already held the Dead Sea

concession - located at the Biblical site of Sodom - since 1961.

Potash, a key ingredient in fertiliser, and magnesium

account for about 30% of ICL's annual revenue of $7 billion. ICL

has ongoing potash supply deals with customers in China and

India. It also has a potash mine in Spain.