Israel: Israel Mining Report 2011

Trends and opportunities

The market

Israel is a nation with very limited natural resources. The most significant natural resources discovered in Israel include natural gas (the first significant discoveries were made in early 2009), sand, some copper and the Dead Sea’s mineral rich saline waters that have allowed Israel to become a large scale producer of potash, salt, bromine, magnesia, magnesium metal and fertilisers.

Israel is considered to be the world’s second largest producer of bromine, the sixth largest producer of potash and the seventh largest producer of phosphate rock.

Several dozen quarries operate in the country with an estimated annual production of 50-60 million tonnes of raw materials (including those used in constrution).

The annual consumption of sand (mostly for construction) is estimated to be anywhere between 10-20 million tonnes a year. Due to the fact that sand reserves in the coastal plain have been over exploited and sand ‘pirates’ have been prevalent, the government is now attempting to prepare a master plan for the supply of sand through 2020.

Israel enjoys considerable deposits of oil shale in the southern parts of the country.  

Opportunities

Export of locally applicable mining technologies (eg. production processes, software, machinery/equipment) into Israel.

Outward investment in local mining projects (eg. natural gas drilling, infrastructure).

Competitive environment

The ICL Group is one of the world’s leading fertiliser and specialty chemical companies with exclusive concessions to extract high quality, low cost minerals from Israel’s Dead Sea and rights to mine the Negev Desert. ICL is a major producer of potash, compound potash and phosphate fertilisers, food grade phosphoric acid, elemental bromine, magnesium and a major player in specialty chemical high margin niche markets. The group’s activities are conducted by several daughter companies including ICL Fertilizers, Dead Sea Works, Dead Sea Bromine, Dead Sea Magnesium, etc.

In the natural gas sector, there is a leading consortium of companies in charge of the recently discovered gas offshore in Northern Israel. This consortium is made up as follows:

• Nobel Energy, which is a leading independent energy company engaged in worldwide oil and gas exploration and production, owns 36 per cent. The company is listed on the New York Stock Exchange.
• Isramco Negev 2 Ltd., an Israeli private partnership, owns 28.75 per cent.
• Avner Oil Exploration, an Israeli private partnership, owns 15.625 per cent.
• Delek Drilling (a daughter company of a local conglomerate called the Delek Group owns 15.625 per cent.
• Dor Gas Exploration (a daughter company of the Dor Alon energy company) owns 4 per cent. 

Altos Hornos de Mexico SA (AHMSA) is a large Mexican corporation involved in copper mining in the Timna mines in southern Israel. Copper mining in Israel began around the establishment of the country in 1948 but operations were ceased in the late 1970’s when a drop in prices made the import of finished copper more economic. It is only in recent times that the new mining technologies and higher commodity prices justified the re-opening of the mines by AHMSA.