Ministers Approve ICL Deal Despite Sharp Dispute

Finance Minister Yuval Steinitz says Israel Chemicals agreement would increase the country's revenues by NIS 700 million to NIS 1 billion a year.

The cabinet approved the Finance Ministry's compromise with Israel Chemicals Sunday, following a stormy four-hour debate.

Finance Minister Yuval Steinitz said the agreement would increase the country's revenues by NIS 700 million to NIS 1 billion a year. This figure includes corporate taxes, dividends and money the government saves from not having to clear out the salt pools at the southern end of the Dead Sea, which are overflowing due to the company's operations.

The agreement sets out ICL's obligations with respect to harvesting the salt and paying royalties for its potash-mining operations. A treasury official stated that the current agreement will be in effect for two years, after which the government could raise ICL's royalty rate. However, people present at the discussion said the Finance Ministry was still unable to present cold, hard figures regarding the agreement, even after Prime Minister Benjamin Netanyahu demanded them explicitly.

Last week, TheMarker caught a mistake in calculations by the ministry: It had overstated the state's take from ICL's revenues.

The ministers approved the agreement after Deputy Attorney General Avi Licht stated that given past governments' commitments to the company, this was a relatively good deal; the state could not easily change the company's royalty rates, as it recently did with respect to natural gas extraction. Licht was part of the team negotiating with ICL.

Steinitz also refused to state what the state offered ICL in order to get it to agree to fund 90% of the salt pool work.

Prof. Eytan Sheshinski, who headed the committee that advised the government to raise its take from gas extraction, said the state needed to appoint a body to deal comprehensively with profits from all natural resources, including potash, phosphates and water.