Israel raises royalty fee on phosphates 84.5 pct

Israel's Infrastructure Ministry will raise the royalties it levies on mining of phosphatesclassifier equipment in 2010 to 44.3 cents a tonne, an increase of 84.5 percent from the rate charged until last year, it said on Wednesday. This will mainly impact Israel Chemicals, which mines and processes phosphate rock from open-pit mines in the Negev desert in southern Israel.

The new royalty fee is up sharply from the 2.5 cents the government charged until 1997, the ministry added. Israel Chemicals produced 2.7 million tonnes of phosphate rock in 2009, 73 percent of which was used in the manufacture of phosphate fertilisers and phosphoric acid. In the first half of 2010 it produced 1.55 million tonnes of phosphate rock. "This won't have a lot of impact on Israel Chemicals. At most we're talking about a couple of millions of dollars," Gilad Alper, an analyst at the Meitav brokerage, told Reuters. Some other changes that regulators are considering could have more of an impact, he said, referring to royalty payments for potash, ICL's main product, as well as raising its corporate tax rate.