ICL warns Israel phosphate reserves drying up, seeks new license
* New desert mine would secure reserves for 30 years
* Israel gov't take from ICL profits to reach 45 pct
* Company is target for Canada's Potash Corp
* Tel Aviv exchange CEO says ICL delisting would hurt Israel
By Tova Cohen
TEL AVIV, April 10 (Reuters) - Israel Chemicals' new chief executive Stefan Borgas warned Israel's phosphate reserves are drying up and called on the government to grant the company licenses to mine at a new site in the southern Negev desert.
Borgas, who took over as CEO of ICL last year, said the fertiliser producer's phosphate activities at Rotem, in the Negev, are among the highest-cost operations in the world.
"To become competitive we must reduce operating costs and increase volume significantly," Borgas said at a ceremony marking 20 years of trade in shares of ICL, a takeover target for Canada's Potash Corp.
The only new reserves that can be mined economically are in Sde Barir, near the town of Arad, whose residents are strongly opposed to new mining activities fearing health repercussions.
"By allowing us to mine phosphates in Sde Barir, we will invest hundreds of millions of dollars and will be able to secure reserves for around 30 years," Borgas said. "But if we do not receive the licenses, it means that we will have to stop our Israeli phosphate activities within 10 years."
ICL, the second-largest company by market value on the Tel Aviv exchange, is controlled by conglomerate Israel Corp .
Borgas defended ICL in the wake of a campaign by some politicians to increase the amount ICL and other natural resource companies pay the government in royalties.
ICL pays over 1 billion shekels ($275 million) a year in taxes and royalties, or 35 percent of its domestic profits, and will in future pay even more due to changes in tax policies, Borgas said.
"We expect the government take to reach 45 percent, which is the highest government take paid by any fertiliser or chemical company in the world," he said.
Israel Corp CEO Nir Gilad said since Israel's January election there were no talks between Potash and the government, which must approve any acquisition.
Israeli media reported that Israel Corp Chairman Amir Elstein had met Canadian Foreign Minister John Baird but Gilad declined comment. Baird also met Israeli Finance Minister Yair Lapid on Tuesday but Lapid's spokeswoman said they did not discuss Potash's bid.
Ester Levanon, CEO of the Tel Aviv Stock Exchange, expressed concern that the acquisition of all of ICL by a foreign company, and the delisting of its shares, would hurt Israel.
She estimated ICL accounts for about 20 percent of Israel's weighting in the MSCI global index and backed a partial merger allowing each company to continue to trade in its home market.
"It's a viable solution ... and if Potash would like to merge with Israel Chemicals that's the way it should be," Levanon told Reuters.
Trending On Reuters
We are living longer but not creating financial plans to keep pace. Advisers give tips on how to make sure you don’t outlive your money. Video