Israel Chemicals to shut oil shale plant

The employees at the Mishor Rotem plant will be transferred to other units.

Sources inform ''Globes'' that Israel Chemicals Ltd. (TASE: ICL) will close its oil shale plant at Mishor Rotem in the Negev. The plant has scores of employees, whom the company plans to transfer to other units in the area.

Israel Chemicals' management has been debating the viability of the oil shale plant for a long time, because the operation's profit margin is limited as the energy produced is mostly consumed by the neighboring Rotem Ampert factory, a producer of phosphate acid and phosphates.

Israel Chemicals' management concluded that the improved availability of cheaper and more environmentally friendly natural gas in recent years rendered the oil shale plant redundant. In a few months, Israel Chemicals will open its natural gas power station at Mishor Rotem, the company's latest measure to base its energy consumption on natural gas.

"In effect, the mining of shale oil has no commercial purpose for Israel Chemicals, except as research for the state. Continuation of the activity requires the company to invest capital for the integration of new technologies. The company changed its strategy, pinning its hopes on environmentally friendly sources, such as natural gas, and it wants to transfer the entire plant to the state. Israel Chemicals has no interest in continuing this activity," a source involved in the matter told "Globes".

Israel Chemicals' share price fell 1.2% by mid-afternoon today to NIS 59.51.

Published by Globes [online], Israel business news - - on March 6, 2011

© Copyright of Globes Publisher Itonut (1983) Ltd. 2011

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