In a bid to diversify the sources of its raw materials, Israel Chemicals said on Monday it was planning to open a phosphate mine and processing plant in Vietnam together with a local company.
- ICL Repositioning After Horrible Year
- Israel Corp. States $89 Million Q2 Loss
- Israel Chemicals Eyes Ethiopia Potash Mine
- Tel Aviv Shares Extend Their Gains on Syria Quiet
The joint venture with Duc Giang will market phosphate products primarily in Vietnam and nearby Southeast Asian, the Israel Chemicals said in a statement. The two sides signed on Monday a memorandum of understanding in a ceremony attended by Vietnam’s ambassador to Israel. They plan to extract phosphate and manufacture downstream products based on the chemical.
“Both ICL and Duc Giang believe their cooperation will be productive and serve as the basis for the further expansion and intensification of cooperation between the two companies in Vietnam and surrounding countries,” Israel Chemicals said.
Last month, Israel Chemicals said it planned to grow the company by expanding its sources of potash and phosphate, which are two of the primary raw materials used in its products. Phosphates are key to the company’s food and agricultural products and engineered materials.
Despite the announcement, shares of Israel Chemicals fell 1.4% in the Tel Aviv Stock Exchange trading Monday to NIS 24.95.
Israel Chemicals said the Vietnam project would not replace the company's three phosphate mines in Israel's Negev desert, but would reduce its dependence on them. The Negev mines are expected to exhaust their reserves sometime in the next seven to 10 years. The Health Ministry has so far blocked the company from receiving permits to establish a new mine in Sde Barir near the desert town of Arad. Residents have objected to opening a mine nearby, citing concerns over radiation.
The proposed Sde Barir mine has pitted the interests of some local residents against the interests of organized labor at Israel Chemicals.
Moshe Hadad, head of the union representing workers at Israel Chemicals’ mining subsidiary, Rotem Amfert Negev, said the mine would be economically beneficial to the region and criticized Health Minister Yael German for blocking permits.
“The agreement signed by ICL and Duc Giang is transferring the phosphate mining industry from Israel to Vietnam with the loss of livelihood for 10,000 Negev residents,” he said. Hadad called on Finance Minister Yair Lapid to intervene and help cut the red tape.