Improved Iron Dome sharpens foreign interest

Rockets intercepted over Ashkelon Credit: Amir Cohen Reuters
Rockets intercepted over Ashkelon Credit: Amir Cohen Reuters

Though costly, Iron Dome saves the Israeli economy billions, and Russia's invasion of Ukraine has made Europe take notice.

Israel’s Operation Breaking Dawn in the Gaza Strip and the response of Islamic Jihad again highlighted the importance of the Iron Dome anti-missile system in protecting Israeli lives and allowing the Israeli economy to carry on almost as usual.

This success will carry a price that the Ministry of Finance is already prepared for. A senior ministry official told "Globes" that the bill for the Tamir interceptor missiles, the business end of the Iron Dome system, would shortly be presented in the form of budget demands by the defense establishment and demands for financing of the ammunition used in the latest round of fighting, reserve duty days, and operational hours for aircraft and tanks.

Iron Dome improves

Iron Dome, the technological miracle that enables Israel to conduct rounds of fighting with minimal damage, was developed jointly by three entities: Rafael, which produced the firing system and the smart missiles; Israel Aerospace Industries (IAI), whose Elta unit produced the radar; and mPrest, which produced the command and control system.

Iron Dome was introduced into service, after rapid development, in 2011, and its performance has steadily improved over the years, from a 75% success rate in Operation Pillar of Defense in 2012 to 96% in the current round. This improvement, the IDF says, is thanks to improvements to the algorithms that operate the smart systems, to the radar, and to the interceptor missiles themselves, in addition to lessons learned from previous operations leading to greater efficiency.

Nevertheless, the success in Operation Breaking Dawn has to be put in perspective. Islamic Jihad has a small number of smart missiles, and most of its arsenal consists of locally made rockets. Its rate of fire is lower than that of Hamas, enabling Iron Dome to take out the vast majority of rockets fired.

Business as usual

Iron Dome is costly, both in development and in use. The Tamir missiles cost $50,000 each, and by Sunday morning the bill for firing 300 of them was NIS 15 million.

In September 2021, the US House of Representatives approved, by a large majority, an allocation to Israel of $1 billion for the procurement of Tamir missiles and the purchase of additional Iron Dome batteries following the running down of stockpiles in Operation Guardian of the Walls.

Naturally, the duration of fighting and the rate of fire from the Gaza Strip determines the cost of using Iron Dome. This cost, however, is dwarfed by the benefit from using the system. In the Second Lebanon War of 2006, Hezbollah managed to paralyze the whole of northern Israel, to hit vital infrastructure, to bring tourism to a halt, and to cause huge losses to the economy. The civilian cost of that war is estimated at NIS 10 billion at 2006 prices.

Eight years later, in Operation Protective Edge in 2014, after Iron Dome had become operational, the civilian cost amounted to just NIS 1.7 billion, according to the chief economist at the Ministry of Finance.

Attractive thanks to war in Ukraine

The latest operation represents a shop window, and will help in overseas sales of Iron Dome, to those countries to which it can be sold. It’s actually the Americans, partners in developing and producing the system, who are hardly buying. The US Army has two Iron Dome batteries that were purchased in 2018 for almost $400 million, but they have still not been commissioned for operational service. A year ago, Rafael and IAI suffered a disappointment when the US Army preferred to buy another system costing billions of dollars, developed by US company Dynetics. This choice came as a surprise, as Iron Dome is an operationally ready, proven system, while the US system is still under development and is thought to be more expensive.

Parts of the Iron Dome system, mainly the radar and the command and control module, have been sold to other countries, among others to Canada, the Czech Republic, Slovakia, and the UK, for billions of shekels. Sales of Elta’s radar amount to over NIS 4.5 billion. There have been media reports of a sale of the full system to Singapore, but these are unconfirmed.

In the past two years, with the signing of the Abraham Accords with the UAE and Bahrain, interest in Iron Dome has increased considerably. Sales to the UAE, Bahrain, and to Saudi Arabia have not yet happened, because of the fear of the leak of technological information, despite the urgent need of these countries for such a system in the face of the threat from Iran and its Houthi proxy in Yemen. Morocco has also made inquiries about the system that are still being examined.

The Russian invasion of Ukraine has also raised interest in the system.

Ukraine itself has several times made requests to purchase the system, but Israel has refrained from selling it out of the fear of Russia’s reaction. Other European countries that are now raising their defense spending have expressed interest, especially Germany. According to an Israeli source, German chancellor Olaf Scholz enquired about the system during his visit to Israel six months ago, and the request is in the process of being approved by the Ministry of Defense in consultation with Israel’s political leadership and with the US.

Laser system: Premature optimism

Iron Dome is just part of a five-layered system being developed by Israel against steep-trajectory weapons. Iron Dome is the fourth layer; the fifth is an interception system using laser beams known as Iron Beam or Light Shield currently under development.

Initial estimates spoke of operation readiness of Light Shield in 2023, but that now seems over-optimistic. According to Yaakov Nagel, who was acting head of Israel’s National Security Council and was involved in the development of the laser technology, the system will not be ready before 2025, and even then it will be a complement to Iron Dome only. Nagel says the new system will be based upon Iron Dome’s radar and command and control systems, and will be integrated with it. The system will decide whether to launch an interceptor missile at the rocket threat or to use a laser beam, in accordance with the range and speed of the rocket and weather conditions. This means that the hopes pinned on Light Shield are exaggerated.

Rafael too ejects the optimistic forecasts for Light Shield. "The assessment is that it will take three to five years for the system to be operational. That estimate was given at the start, and it remains valid," Rafael told "Globes".

Published by Globes, Israel business news - en.globes.co.il - on August 8, 2022.

© Copyright of Globes Publisher Itonut (1983) Ltd., 2022.

Rockets intercepted over Ashkelon Credit: Amir Cohen Reuters
Rockets intercepted over Ashkelon Credit: Amir Cohen Reuters
Africa Israel Residence CEO Ronit Eshed Levy credit: Cadya Levy "Jewish communities abroad want to move together to Jerusalem"

Africa Israel Residence CEO Ronit Eshed Levy told the Globes Going Long on Israel investment conference about urban renewal in Jerusalem.

Arkia aircraft credit: Arkia Arkia to introduce business class on New York flights

For the first time in its history Arkia will operate business class with round-trip Tel Aviv New York tickets starting from $3,500.

Knesset passes 2025 budget credit: Noam Moskovitz Knesset Spokesperson Knesset approves 2025 state budget

The NIS 620 billion budget has ballooned by NIS 100 billion and will rely on a fiscal deficit of 4.9% of GDP.

Tel Aviv Stock Exchange  credit: PR Volumes peak on Tel Aviv Stock Exchange

Greater optimism in Israel and a shift away from US markets have brought trading volumes in Tel Aviv to a historical high, but will the trend be sustained?

Volkswagen credit: PR VW announces huge collaboration with Mobileye

A new advanced driving assistance system will be installed in millions of cars annually.

Navina founders Ronen Lavi and Shay Perera credit: Eyal Izhar Israeli clinical AI co Navina raises $55m

Navina equips clinicians and care teams with real-time, data-driven insights that improve the quality of care and financial outcomes.

Yoni Assia  credit: eToro PR Trading platform eToro set for IPO

The company has filed a prospectus with the SEC, showing that its revenue tripled in 2024, with 96% deriving from crypto trading.

Minister of Finance Bezalel Smotrich and Minister of Transport Miri Regev  credit:  Marc Israel Sellem, The Jerusalem Post Deal: Gush Dan congestion charge for Kiryat Shemona railway

Miri Regev is close to final agreement with the Ministry of Finance on funding for her pet project in return for removal of her objection to the congestion charge.

Nakash brothers credit: Aviv Hoffi Nakash brothers set to dissolve Israel partnership

Avi Nakash has fallen out with Joe and Rafi Nakash over his claims that former CEO Avi Hormaro stole rights in the Group's companies, which include Arkia, the Orchid hotel chain and Ampa.

Air Haifa  credit: ATR Paphos ban for Israeli airlines continues to May

Air Haifa has postponed the launch of its Haifa-Paphos route until May 1, signaling that the security ban on Israeli airlines using the Cypriot airport will continue in April.

ONE ZERO CEO Eyal Gafni credit: Cadya Levy One Zero CEO: Outdated fees can be avoided with simple awareness

Eyal Gafni told the Globes "Going Long on Israel" Conference that with higher awareness the public can stop keeping their money in current accounts with zero returns.

Shekels credit: Shutterstock Vladerina32 Shekel rebounds on volatile forex market

Without a further trigger, such as an escalation on the security front or a further deterioration in political stability, there is no expectation in the market for foreign exchange turmoil.

Ishay Davidi credit: Cadya Levy FIMI CEO: Foreign investors flocking back to Israel

Ishay Davidi told the Globes "Going Long on Israel" Conference that investors who pulled out of Israel after October 7 have begun returning in large numbers.

Yali Rothenberg  credit: Cadya Levy Accountant General: No prospect of rating upgrade

Ministry of Finance Accountant General Yali Rothenberg sees 2025 as a stabilizing year for Israel's debt:GDP ratio.

Wix Credit: PR Wix employees gain $102m on options

The intrinsic value of options exercised by Wix employees in 2024 rose to $102 million from $19.5 million in 2023.

Tel Aviv Stock Exchange credit: Shutterstock Tel Aviv stocks: Rebound or long slide?

Statistics show a two-thirds chance of high returns after a steep one-day fall. Yields on Israel government bonds are rising sharply.

Twitter Facebook Linkedin RSS Newsletters גלובס Israel Business Conference 2018