State proposes taking more cash, imposing stricter regulations for Dead Sea mineral extraction

A raft of proposals for the next franchise for Dead Sea mineral extraction published by the Finance and Environmental Protection ministries and the Tax Authority include deducting more cash for the state from operating profits, reducing allocated land, charging for the use of water and imposing planning and building and other laws on the company.

The franchise, which dates back to 1961 and runs out in 2030, is currently held by ICL Group, formerly Israel Chemicals Ltd., a subsidiary of the Ofer family’s Israel Corporation, the country’s largest holding company.

According to a media briefing, 53% to 64% of ICL’s total operating profitability comes from the Dead Sea Works, which extract potassium-rich potash, a key ingredient in fertilizers. The company, said the briefing, has seen average operating profits of $690 million to $830 million annually between 2017 and 2023.

Among the proposals unveiled are halving the land in southern Israel earmarked for the franchise, raising the government take from around 35 percent to 50% of operating profits, charging for the use of both salty and fresh water, abolishing government subsidies for keeping water levels stable in evaporation pools adjacent to hotels, and removing the current exemption for certain laws that apply to the rest of Israel.

A joint statement by the Finance and Environmental Protection ministries and the Tax Authority says, “In light of the importance of the area from an economic, tourist and historical point of view, the report places great emphasis on creating a balance between the continued production of essential minerals, which are an important pillar of Israel’s economy, and the need to preserve the special environment of the Dead Sea. The report’s recommendations aim to… ensure sustainable utilization of the Dead Sea’s resources while protecting the area for future generations.”