Recently, ICL bought a 30 percent stake on Allana Potash, a Canadian company that is preparing to mine a potash deposit in the Dalol depression in the Afar Region in the north-east of Ethiopia.
Lately ICL has also been having significant disagreements with the government of Israel concerning the appropriate level of natural resource taxation that should be imposed upon the company for its domestic operations there. Yesterday as a result of the resulting uncertainties ICL even publicly stated it was freezing its current investment plans there until the situation became clarified.
Accordingly, Idan Ofer came on a two-day visit to Ethiopia last week and visited the potash mine in the Dalol depression. This was no doubt useful in terms of assessing a pending potential investment there and also, perhaps, pour encourager les autres, as they say with respect to his domestic official tormentors over resource taxation back home in Israel.
In an exclusive interview with the Addis Ababa paper The Reporter, Idan Ofer said that he was satisfied with his visit. “I am happy with the development at the potash exploration site, the future potash mine, ” he said, adding, “Officials of Allana are closely working with the local authority and they are conscious of the demands of the local community. They pay much attention to the local community. So I am happy with that, ”
Ofer also said that ICL is would like to build a potash fertilizer factory at a cost of $600 million in Ethiopia. According to The Reporter Ofer said that before starting to mine the potash deposit, ICL would import raw materials needed to produce potash and phosphate fertilizers.
Then, ”After we start mining the potash deposit we will locally manufacture the potash fertilizer. We will primarily supply potash fertilizer for the local market in Ethiopia. But we will also export some portion of it. We want to make Ethiopia Africa’s potash hub, ” Ofer said.
Stefan Borgas, President and CEO of ICL, who accompanied Ofer, told The Reporter that ICL has already invested 25 million dollars on Allana’s potash project and was committed to invest an additional 59 million dollars in the near future.
Borgas confirmed his boss’s remarks stating his company will build the fertilizer factory within a year. “We will invest $600 million in the fertilizer processing plant. The potash mine and the factory will together open up 5, 000 jobs.
The site of the fertilizer factory is not yet specified. However, Borgas said Allana and ICL are closely working with the Ministry of Mines and Agricultural Transformation Agency. Other potential investments such as investment in power generation, another of Israel Corporation’s businesses, ICL’s parent company, were also placed publicly on the table in the discussions as well.
Ofer and Borgas also met, and discussed investment issues, with President Mulatu Teshome (Ph.D.), the Foreign Minister Tedros Adhanom (Ph.D.), the Minister of Mines Tolossa Shagi and senior officials of the Ministry of Agriculture. Ofer said to The Reporter he was more than satisfied with his discussions with the senior government officials.
“They are supporting our investment projects. They promised us that they will build a 130 km road from the mine to the Djibouti border in the near future.”
Finally Ofer added, in what is obviously a very loud message to his own Israeli government: “What I like about the Ethiopian government officials is that they encourage investment and they deliver what they promise. That does not often happen in other countries and that is why we want to invest here. If we were not satisfied we would not invest this amount of money here.”
There is nothing subtle at all about that; on the other hand there is nothing subtle in the way some Israeli officials have seem determined to squeeze every ounce they can out of the golden goose that is ICL, not withstanding all prior agreements that were freely put in place between them. They need to be careful now they don’t just go a squeeze too far, perhaps.