State has failed for years to properly manage Dead Sea Works — Comptroller report
Report maps failure by multiple ministries and government agencies to regulate, supervise, and charge for the mining of minerals that belong to the public
Sue Surkes is The Times of Israel's environment reporter
For years, multiple ministries and government agencies failed to regulate, supervise, and charge for the use of natural resources that belong to the public, according to a state report published Tuesday on the country’s handling of the Dead Sea Works mining conglomerate.
The State Comptroller’s report accused the Environmental Protection Ministry of failing to include environmental obligations and guidelines in some business licenses granted to Dead Sea Works, which extracts minerals from the evaporating saltwater lake. Such requirements form the basis for the ministry to supervise and regulate what happens.
As a consequence, Dead Sea Works was under no obligation, for example, to report continuous, significant, and ecologically damaging leaks of potash into the Judean Desert nature reserve from the 18-kilometer (11-mile) long conveyor belt that transports an average of 1.4 million tons of the material annually to a transport terminal above the Dead Sea.
Dead Sea Works pumps water from the Dead Sea into vast industrial ponds. The water evaporates in the sun, leaving mineral-rich brine from which phosphate, potash, bromine, and magnesium are extracted and sold. The first two are key ingredients of industrial fertilizers.
Nationalized in 1951, Dead Sea Works grew from a private potash factory established in 1930. In 1961, the Knesset granted it exclusive rights for the next 69 years to mine a large portion of the Dead Sea and use much of the surrounding area for its operations. That lease will run out in 2030.
The franchise 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.
Environmental groups have long accused successive governments of treating the powerful company with kid gloves.
According to the report, the ministry failed to have business permits include guidelines or requirements on the treatment of vast quantities of salt-related and other waste the plant generates each year.
It also did not charge the plant levies for burying waste, giving up on an estimated NIS 90 million to NIS 135 million ($25 million to $37 million), which could have been used to support initiatives such as waste recycling.
Around a quarter of the water drawn by Dead Sea Works from the Dead Sea leaks out of the largest evaporation pool, the State Comptroller found, so that the plant pumps more water than necessary to compensate for the loss. Yet the ministry failed to demand that steps be taken to reduce or block the leak, the report said.
The report accuses the Energy Ministry of failing to regulate mining in the concession area, describing “a continuing and disturbing regulatory failure, with far-reaching environmental and economic consequences.”
Despite agreeing on a framework for supervising mining activities in 2009, the Energy Ministry failed to issue mining licenses or conduct the kind of inspection tours it carried out at other mining sites and received no reports on what was being mined. The result, according to the State Comptroller, was that it could not monitor whether natural resources were being utilized efficiently.
Furthermore, neither the Energy Ministry nor the Israel Land Authority charged the company mining fees, which would have been worth more than NIS 120 million ($33 million) over the past decade. Nor did they demand that the Dead Sea Works rehabilitate abandoned quarries, the comptroller charged.
In addition, Dead Sea Works benefited from lease fees based on 1970s land valuations, the State Comptroller found, paying just NIS 2.7 million ($745,000) in 2024 for a concession area of just under 60,000 acres (240,000 dunams).
Criticizing the Tamar Regional Council for not pushing the Environmental Protection Ministry to regulate Dead Sea Works more seriously, the State Comptroller also found that data held by the various actors was inadequate and either not properly shared or not acted upon.
The comptroller called on the Finance Ministry to act together with the Environmental Protection Ministry to solve the problems raised and to explore the possibility of creating a single authority to manage the franchise in the future. The treasury is leading efforts to negotiate a new lease to replace the existing franchise when it expires in five years.
He demanded that the Israel Land Authority’s director, the relevant ministers, and the directors general of the finance, environmental protection, and energy ministries close the gaps he identified and conduct a “deep” review of how they managed other large industrial concerns.
In September, the finance and environment ministries and the Tax Authority released for public comment a draft franchise for Dead Sea Works, which included taking more of the operating profits for the public’s benefit, reducing the amount of land in the concession, charging for the use of water, and imposing planning and building and other regulations on the company.
The Energy Ministry responded that the State Comptroller had misunderstood the mining situation.
Quarries in the concession area, which were used by the concession holder for the needs of the factory and were not used to trade in quarry materials, did not require a license according to the Mines Ordinance and were not required to pay to the Quarry Rehabilitation Fund, a statement said.
The concession holder was obliged to rehabilitate all mining sites within the concession area in line with the Dead Sea Concession Law, it added.
The ministry said it conducted periodic audits of these sites and found no deviations from the approved plans.
