'Canada firm shouldn't merge with Israel Chemicals'
Outgoing Environmental Protection MK expresses opposition to PM regarding potential merger, cites "real endangerment of interests."
Gilad Erdan Photo: Screenshot
Outgoing Environmental Protection Minister Gilad Erdan sent a letter to Prime
Minister Binyamin Netanyahu this weekend, expressing vehement opposition to a
potential merger between Israel Chemicals and a Canadian natural resource firm
that has shares in the Israeli company.
Israel Chemicals, the firm
responsible for the majority of mineral extraction on the Israeli side of the
Dead Sea, has three categories of shareholders: Israel Corp., which owns 52.30
percent, Potash- Corp Agricultural Society Ltd. – held by Potash Corporation of
Saskatchewan, Canada – which holds 13.85% and members of the public and other
institutions who govern 33.85%.
The Canadian firm is now considering
bidding for the remainder of Israel Chemicals that it does not yet possess,
according to Bloomberg News. Such a move, Erdan stressed, could cause severe
environmental implications to the Dead Sea as well as harm the region
“The completion of the merger in question without finishing
the process of establishing a national policy for managing natural resources
would lead to the real endangerment of economic, social and environmental
interests of the highest priority,” Erdan wrote.
Erdan also called upon
incoming finance minister Yair Lapid to immediately declare that he would freeze
conversation on the subject until a discussion within the new government
An outline of the investment plan in question indicates that such
a deal could lead to a significantly increased amount of potash production by
foreign parties and thereby inflict added environmental damage upon the Dead Sea
region, the minister argued.
Likewise, if the Canadian firm gains a
majority hold on company shares, as an international company it could transfer
the bulk of production to Jordan, where labor costs are cheaper.
situation could damage the livelihood of thousands of Israeli families, Erdan
“As we know, PotashCorp holds a global monopoly in potash
production and can influence the prices of potash internationally against the
interests of the State of Israel by exploiting its resources,” Erdan wrote, “and
this is depending on whether the Canadian company increases the production of
potash or reduces it.”
For decades, Israel Chemicals has been mining
minerals from the Dead Sea and has caused enormous damage to its environs –
decreasing the basin’s water level and harming the area’s natural ecology, Erdan
Because an expanding financial agreement with Potash- Corp could
only expose Israel to further such risks, as well as social and environmental
ramifications, the government must first conduct a thorough examination of the
country’s potash and phosphate resources, as well as create a unified policy on
natural resource management before proceeding with any merger, Erdan
An Israel Chemicals representative did not address the
implications of a merger with, or acquisition by, a foreign company, but touted
the company’s environmental record.
“In the last three years, [ICL]
invested over a billion shekels in that field, an investment that allows it to
operate according to the most stringent standards in the world and even higher,”
the representative said, adding that the continuously dropping water levels in
the sea were a result of Israel and its neighbors diverting 1.5 billion cubic
meters of water annually for other uses.
The company reiterated the fact
that it is the largest employer in the Negev and contributes NIS 12 billion to
Israel’s GDP, facts that make its fate politically sensitive.
Ministry refused to wade into the debate, saying that it would not interfere in
talks between private companies, though it reserved the right to take a position
in the future if an offer were to be put on the table.
Lapid declined to
comment on the matter, while Potash Co. did not respond to requests for comment.