Arava Mines Suspends Work at Timna Valley

Mexico's mining and steel giant Altos Hornos de Mexico (AHMSA) has told its local subsidiary, AHMSA Steel (Israel), that it plans to suspend operations at Arava Mines next month. That would cost 150 workers their jobs.

AHMSA, Mexico's third largest steel producer, says it made the decision made after failing to receive NIS 35 million it said was promised by the government, as part of a planned NIS 265 million investment in developing the Timna copper mines near Eilat. The development project was to have provided work to about 600 employees as well, as about 1,500 service providers in the area.

When AHMSA began looking into investing in Israel, about three years ago, the Industry, Trade and Labor Ministry was enthusiastic about the prospects and pointed out that the proposal met the eligibility criteria of the Law for the Encouragement of Capital Investment. So far the Mexican company has invested $60 million-$70 million in Israel.

"We spoke with the ministers and saw that the approach was positive, so we immediately decided to invest," the CEO of both AHMSA Steel (Israel) and Arava Mines, Carla Garcia-Granados, said. "It was only in August 2008 that we received a letter from the [ministry's] Investment Center, which said that the criteria had changed, and that our request did not meet the new criteria. But the request was submitted in accordance with the criteria of 2006, and it met all of them. We invest all over the world and in no law-abiding country did I have to work as hard as I did in Israel. Even banana republics are easier to work in. There at least you know that you can't trust what someone says. Here the words of a cabinet minister are worth nothing, with all due respect," Garcia-Granados said.

The Investment Center informed Arava Mines that it could appeal the decision, but no appeals committee was established, apparently due to delays in the ministries of finance and of industry, trade and labor.