from the July 2014 issue

Israel Chemicals to invest $600m in Ethiopian potash mine

We are pleased to note that an Israeli company is making a substantial investment in Africa. Israel chemicals, controlled by the Israel Corp. has stated its intention to make Ethiopia Africa's center of potash production.

Israel Chemicals to invest $600m in Ethiopian potash mine
Israel Corporation (TASE: ILCO) controlling shareholder Idan Ofer has promised to make Ethiopia "Africa's center of potash production," and invest in the country's electricity infrastructure.

Israel Chemicals, controlled by Israel Corp. recently bought a 30% stake in Canada's Allana Potash, which is preparing to mine potash deposit in the Dalol region in the Afar Regional State, in northeast Ethiopia.

Ofer, who last year moved to London from Israel visited Ethiopia for two days last week. He visited the potash mine in the Dalol region and told journalists that he was satisfied with his visit. "I am happy with the development at the potash exploration site, the future potash mine. Officials of Allana are closely working with the local authority and they are conscious of the demand of the local community. They pay much attention to the local community. So I am happy with that."

Ofer said that Israel Chemicals is planning to build a potash fertilizer factory at a cost of $600 million in Ethiopia. According to Ofer, before starting mining the potash deposit, Israel Chemicals will import raw materials and produce potash and phosphate fertilizers. "After we start mining the potash deposit we will locally manufacture the potash fertilizer. We will primarily supply the potash fertilizer for the local market in Ethiopia. But we will also export some portion of it. We want to turn Ethiopia into Africa's potash hub."

Ofer was accompanied by Israel Chemicals CEO Stefan Borgas who said that Israel Chemicals has already invested $25 million dollars in Allana's potash project and was committed to invest an additional $59 million dollars in the near future. Borgas said his company will build the fertilizer factory within a year. "We will invest $600 million dollars in the fertilizer processing plant. The potash mine and the factory will together open up 5,000 jobs. We have already invested $600,000 in farmers education on the use of fertilizers. There are six hundred demonstration sites all over the country," Borgas said.

Ofer and Borgas met with Ethiopia's President Mulatu Teshome, Foreign Minister Tedros Adhanom, Minister of Mines Tolossa Shagi, and senior officials of the Ministry of Agriculture top discuss investment issues.

Ofer said, "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. What I like about the Ethiopian government officials is that they encourage investment and they deliver what they promised. 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."

Reprinted from the Israel High-Tech & Investment Report July 2014

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