ICL teams with Leviev on Namibian phosphate mining

Stefan Borgas
Stefan Borgas

Israel Chemicals and Leviev Group plan large-scale maritime mining and phosphate downstream manufacturing.

Israel Chemicals (TASE: ICL: NYSE: ICL) has signed a Memorandum of Understanding with LLNP Ltd., a Namibian subsidiary of the Leviev Group, to perform a feasibility study for building a large-scale maritime mining and phosphate downstream manufacturing business in Namibia. LLNP, controlled by Israeli businessman Lev Leviev, holds permits and exploration rights to mine phosphate deposits for an estimated one billion tons.

The cost of extracting the phosphate is anticipated to be very competitive compared to competitors, which, in turn, is expected to enable downstream production to deliver best cost of goods.

Over the next several months, ICL and LLNP will finalize the technology development required to produce phosphate downstream products from marine deposits, including the establishment of a local industrial pilot plant. Upon its successful completion, a detailed feasibility study will be prepared to secure financing for the project.

The location of the plant on Namibias Atlantic shore, close to the marine mining site is expected to provide major logistical advantages due to its proximity to markets in North and South America and competitive freight rates to East Africa. An adjacent port will be used to export goods, as well as to import raw materials required in the production process. The production plant will also benefit from its proximity to land-based transportation systems (including a railway line) serving areas with high demand in Southern and West Africa.

LLNPs parent company, Leviev Group, has technological knowledge of maritime mining based on its substantial experience in maritime mining in Namibia. This will complement ICL's extensive experience, advantages and position in the specialty phosphate market.

The partnership with LLNP follows ICLs recent formation of a phosphate joint venture with Yunnan Yuntianhua, Chinas leading phosphate company. The Chinese JV is comparable to the planned operation in Namibia based on a mine producing 2.5 million tons of phosphate rock per year.

The JV with LLNP is part of the execution of ICLs Next Step Forward strategy to diversify its sources of phosphate-raw materials in order to build its specialty phosphate business, in this case in the Americas and in Africa for the agriculture, food ingredients and engineered materials markets. These steps are expected to ensure the continuation of ICL's phosphate operations.

ICL CEO Stefan Borgas said, Our joint platform will enable ICL to serve the evolving and fast-growing needs of the food and agro markets on the African continent. In the short term, we will focus on proving the technology required for this project and to demonstrate that it will enable us to operate as one of the worlds cost leaders in integrated phosphate specialties. The majority of the substantial investment in the project is expected to commence in 3 to 4 years. This initiative is meant to serve as the next wave in ICLs expansion of its specialty business after most of our existing growth projects are completed. We do not expect this project to represent an additional financial burden on our company over the short term.

Published by Globes [online], Israel business news - www.globes-online.com - on December 7, 2015

Copyright of Globes Publisher Itonut (1983) Ltd. 2015

Stefan Borgas
Stefan Borgas
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