Israel Chemicals Quits Potash Project in Ethiopia

Israel Chemical potash
Fertilizer heavyweight Israel Chemicals abandons potash project in Ethiopia for good.

By TesfaNews,

Fertilizer heavyweight Israel Chemicals (NYSE:ICL) said on Thursday that its board of Directors have decided to abandon its potash project in Ethiopia citing failure by the government to provide the necessary infrastructure and regulatory framework for its Danakil project in northeast Ethiopia.

Israel Chemicals (ICL) also said the rejection by the Ethiopian tax authority of Allana Afar’s appeal regarding the “unjustified and illegal tax assessment, which Allana Afar (a unit of ICL) has declined to pay” as the second most reason that force the company to terminate the project.

ICL had acquired the project last year from the Toronto-based Allana Potash Corp. in a $137-million takeover bid.

As one of the largest suppliers of crop nutrient potash to China, India and Europe, the termination notice definitely comes with a shock to both Ethiopia and Djibouti governments besides its possible implications for the broader potash sector in the world.

Having ICL as a major customer with its expected 4 million tons of potash exports every year, the Djiboutian government have invested billions of dollars in the development of a dedicated potash terminal facilities in Tadjourah.

The Ethiopian government also borrowed billions of dollars to bring the potash product up to the Tadjourah potash terminal in Djibouti that includes the construction of a 120 km upgraded highway from the Djibouti side, a 300 Km highway road up to the project site along with a 216 Km Asayita – Tadjourah railway line.

None of these costly infrastructure developments have yet finalized and hence the primary reason for ICL to quite the project altogether.

Ethiopia would have had access to a sea outlet as short as 100 Km through the Eritrean borders than the planned 600 Km via Djibouti had it amicably solved its political and border issue with Eritrea.

President and CEO of Allana Resources, Farhad Abasov, once said,

“obviously it would make commercial sense to transport the material from Ethiopia across the border to Eritrea. It would be ideal if this could overcome any political tensions between the two countries, but should that be difficult, then Djibouti would be the alternative export route, with the potash trucked there.”

  • Raee

    “ቈልዓ ይጐዪ’ምበር ኣይቅድምን” ዝብልኹም ከም’ዝ ናይ ወያነ ነገር እዩ። It looks what Weyane is doing in Ethiopia is for show off, and out of inferiority complex. It was not a well thought and studied project. Weyane does not know that it requires Shaebia’s brain to compete with Shaebia. Weyane will not make peace with Shaebia as long as he is staying in power. Its crime against Eritrea is incalculable. Anyways, Weyane is on its way to file ስልጣን bankruptcy in Ethiopia by the Ethiopian people.

    • Lalmba

      Yes, that shows their limitless stupidity and bottomless hatred of Eritrea! These people have an unbelievable inferiority complex when they hear the word Eritrea. Think about it, they had the privilege of using our ports for practically nothing until they decided to abandon them, based on idea that no normal people would see as feasible and tenable. Ignorance will keep them yawning for our assets from a far!
      ኣታዮ ሃሳስ፡ ላይ ኤርትርያ ላይ ባሕሪ በር ፍጹም ለይግነ ዶኾነይ!

      • Dendenhaben

        Well said lalmba.

    • HIDROM

      It is time for the Ethiopians to get rid of Weyane, if they want export their Potash resources through Eritrea at minimum cost, The Israelis have done the right move to stop the Ethiopian Potash at this point in time.

      Picture this: if Weyane were smart, they could have exported their Potash thru Eritrean ports which is only 100 km from from the border. But here they are, they chose to transport its Potash though Dijoubit what is 1000 km way This is some some thing no sane person or business man will chose. But that is the Weyane did and what did the Israelis do? They are business men to make money and they could not afford to transport the Ethiopian Potash to Djibout which is 1000 km from the sersouce..

      In any case, the Israelis should continue the possession or ownership of the Ethiopian Potash resources and wait until the Weyane is kicked out to Ethiopia, which they will be kicked. Then only then could the Israelis could make money by exporting the Ethiopian Potash thru the Eritrean ports. It is long term venture, but it is some thing that will pay off to both the Israelis and the Eritreans in the long run

      That is the story and it is some thing the Israelis should wait.

      • Young EriBlood

        When you said 1,000KM I was like wait… then when you think about it your actually right. For example, if cargo is destined for EU markets, it’s like shipping the Argo back 500km and taking another 500km fourth post-Eritrea port. These dumb small brain woyane gangs are dumbest has it gets.

        • HIDROM

          Thanks for bringing it up, I never thought of that. At this point in time, the Weyane (or the Israelis} are to transport their Potash 1000 km to Djibouti. But I never thought the other 1000 miles from Djibouti before it reaches the Eritrean ports on the way to Israel or Europe,

          Now I know as to why the Israelis stopped the operation. It economically sensible to the Israelis to take this action.

    • HIDROM

      Do not forget, here is Djibouti, which is addicted KHAT, even if after tramsporting the Potash to 1000 km from the site to Djibouti, fDo not forget there are no, I mean no port employees.

      Do not forget, from 11 AM 4 PM from the PRESIDENT Djibouti to the house wives, fevery one is in another universe, and they are gone to chew KHAT During this time span, Djibouti is at stand still chewing KHat and that must be one on of the reasons as to why the Israelis stopped the project.

  • Any investment Ethiopia engages with Djibouti is part of the package it engineered to weaken Eritrea by effecting a long term economic consequences. Starting from its infamous “ግመል ታጠጣበት project to the recently completed $3.4 billion dollar railway. But every action taken by Woyane returns back to itself with a long term consequences. Abandoning Assab port for instance have already resulted with the establishment of a major military and naval base from Gulf states, and a revenue of more than half a billion dollar a year for the next 3 decades with out Eritrea investing a single cent on it.

    As if that is not enough, the new Israeli owners of the Dallol Potash project in Ethiopia are now following the previous owners such as BHP and Allana to start packing up. But why? The answer is obvious. ICL can not compete itself with the Colluli potash project of Eritrea which is by far the world’s shallowest, low cost and most importantly closest to the sea. No other Potash project in the world is as closer to the sea as the Colluli potash project. The closer it gets to the sea is the lesser the cost of transporting the product. That also mean the bigger the profit margins as the price of potash in the world market is already at a record low.

    The Dallol potash have a 25 year mine life while Colluli a hooping 200 years. Therefore, ICL knows it can not compete with Colluli by transporting its potash 600Km via rail while the former only 180Km to the already built Massaw port or 75Km to the future port of Marsa Fatima.

    This is another long term economical consequences to the Ethiopian regime due to its hostile and unrealistic anti-Eritrea business model. Here we go now as there will be no other company in the world that will take up the now defunct Dallol potash project as it is now declared economically not profitable anymore.

    For the billions of dollars the regime borrowed to build the roads and railway lines from the mine to Djibouti port, it is now nothing than a white elephant with no economic value.

    Welcome to the zero sum game of TPLF’s no-war no-peace agenda against Eritrea.

    • Habte

      Maybe these people already knew the project was not profitable, perhaps they just wanted the rail road to Tigray built on the pretext of the potash project, and slap the company with unrealistic tax burden and make it cost prohibitive …there are lots of anecdotal stories about the way the do business, weyane that is.

      • HABEN

        Sounds like Afar has geared-up for Oromo, Amhara and Konsso type of uprising. CLI makes excuse and decides to leave sooner than letter, at’hadema ibuyat. Several other companies will follow suit and leave Woyane high and dry!

    • ERITREANFORLIFE

      TN, is it true that ambassador Girmai Asmerom past away in NEW YORK? I know it has nothing to do with the topic, just wondering.

  • eritsinaat

    Ethiopia has an option of completing the project with China. Because China has interest in building the rail infrastructure and taking the potash as well. So it can be a one-stop deal for Ethiopia and China. Don’t you think so? I am just saying.

    • anokito

      Your scenario is very probable. I see also a probability that Ethiopia and Eritrea will come to a term at one point that will allow their projects more attractive to the world market and more profitable to both countries. Eritrea has the leverage of accessibility and Ethiopia has the sheer volume of the potash.

    • That’s actually the only and last resort the Ethiopian regime left with – to sell the potash project to a country that is know for buying all the potash in the world.

  • Selam

    Let’s just focus on our own business.

    • Snoop

      Wise!

    • Ask if you do not see the connection the project has with Eritrea.

      • Economy

        Indeed! Y know it was just after indepenence that a project accessories was sent to Assab and the then responsible person ordered the company to send from Assab to DJ. Imagine after it was transferred from Assab to Dj there was a delay so another instruction was given again to turn it back to Assab. By the time it reached Assab half of the accessories were missed. I have heard the same person saying before Eritrea dump its products we should try to manufacture before her. This was a sentiment at the initial stage but for my surprise those who were advocating for the independence of Eritrea turned out to be antagonistic. So SELAM the cause of all these problems are Weyane leaders. This had consquence to our country’s economy and it is the cause and effect of our youth desertation for economic benefit. This is because our ports were paralyzed not to be productive!

  • Young EriBlood

    In March, ICL acquired the full stake of Allana Potash for $109 million. Allana had mining rights for potash in northeastern Ethiopia and ICL controlling shareholder Idan Ofer declared, “We will make Ethiopia the potash center of Africa.”

    We witnessed what happened next. Lol

    Meaning while in Eritrea: WE’RE UNDER CONSTRUCTION.

  • sentek

    What a load of crap. This company was given a notice to pay taxes or get the hell out. Instead, they were using Allan Afar to appeal the ruling not to pay. Second, Meles told them before they got in, using port Asab is not an option. Tio port would have been good if Wedi Afom develop his own home, leave power since we will never pay a dime to shabo in this life time. The only avenue is the same one we outlined years ago. Once the Tadjoura port and rail to Mekelle is completed, any mining company from Ethiopia will jump on it. Think about it, 20 years ago nobody thought it was possible to cut port fee by 70% but here we are two days after the opening of rail way Ethiopia to Djibouti port, who is crying over Asab except shabo? Rest in peace our visionary. More to come, stay tuned.

    • Young EriBlood

      You are blind. Wait till the GERD is complete and filling commense. Tiny Gybooty will be influenced under Arab league nations after Egypt feels thirsty via Nile dam dispute. They knew you guys screwed them over on feasibility studies. You bet now they’re gonna fund OLF & Company since they were wrongfully accused just by hosting an even. U.S. also does that.silly minds.

      I give woyane 2018 or less to come down crashing.

    • Young EriBlood

      Plus, do you know how easy it is for opposition rebels to disrupt the rail line? All they need is a truck and cables and pull off. That’s my prediction by year end. There will be incidents and attacks reported on constant basis.

      • the cancer

        So you are deliberately voicing of terror to disturb Ethiopia’s economy, you people and your government are indeed the cancer of East Africa..

        • Aman

          That is What ethiopia had been doing to Eritrea for many years, Karma is a bitch ain’t it…

    • ኣሌክ – Alec you

      “we will never pay a dime”

      LOL.. Wtf are u talking about Ugumesh??.. U were using our ports for free, that is the funny thing. U wer the one that lost big-time. And now our port Assab** is bringing millions Ugum-boy. U took advantage of our good-kind Eri-Heart, but this time never!! And besides.. The Ethio-ppl are coming for ur heads. Just keep what u do best.. And that’s killing, killing and killing the poor Ethio-ppl.???? But remember Ayte Ugumesh=> when push comes to shove, ur going to pay dearly. ????

      • Zemen

        The Sidama and Gedeo peoples of south Ethiopia have declared to stand with Oromos fight Woyane, and they started it already. Meanwhile, in Benishangul, the bamboos are full of anti-Woyane lions which are watching Woyane movements closely.

        • ኣሌክ – Alec you

          Woyane-Tigray’s end is assured!!

      • sentek

        Young shabo, im sure thats what they told you but please ask your hate teacher, TN. I know for fact Asab was NOT free. I was indeed small fee compare to Djibouti but in return shabo used our money, export our goods without planting and people can move no questions were asked. But, wedi afom got too comfortable, he really thought Eritrea can do without Ethiopia or he didnt think Meles would make the tough call. Truth is young shabo, Eritrea can not do without Ethiopia economically speaking. Any given time we flex, your little nakifa is on chock hold. Every little project, revenue that went to Djibouti, it should have been Eritrea but you have unwise leaders. As for Asab, its no longer us asking, its the people of Afar wanting to be free. Stay tuned.

        • ኣሌክ – Alec you

          Ugumesh, of-course u wer using Assab free of charge. And that is based-fact.

          “Another important fact that is conveniently left out by Meles and his ilk is when Ethiopia did use the port of Assab between 1991-1997, they were paying Eritrea nothing from a profit standpoint, let alone a ‘single cent’. As the IMF quote below shows, Ethiopia was using the port of Assab for free.

          As stipulated under an intergovernmental transit and port services agreement as well as a customs arrangement (amended annually), the port of Assab is a free port for Ethiopia, with its own Ethiopian customs branch office, and goods shipped to or from Ethiopia remain exempt from the Eritrean customs duties and related charges.”

          So u see Ugumesh, Eritrea was not financially gaining from Ethiopia when u were using the port. It’s the other way around. ???? Again Assab is bringing million baby.
          ___________________________________________________
          And just for reminder..

          Like Ambassador David Shinn said .. in his op-ed piece on US-Eritrea relations alluded to the fact that one of the causes of the 1998-2001 border war was the perceived inferiority complex that Tigrayans have towards Eritreans and the score settling they felt they needed to do as a result once they had access to the resources of a larger state.

          Even ur masters knows u..Ugum-boy.????????????
          ___________________________________________
          And about the Afar Mumbo Jumb, keep on dreaming Ugumesh it’s free. But mark my words we’re going to sandwich Tigray/Agame till u can’t breathe, now Tigrayans are the most hated creatures in Ethiopia… U are already getting deported from Ethiopia, And soon ur gonna pay for ur crimes. Stay tuned on that one. Boy am gonna enjoy that. ????

        • Zurug!

          what investment ssay thank you to china and the ever growing debt….and for “shabo” they aren’t the ones but your green eyed uncles
          as for Eritrea don’t worry we will be ok just feed your people.

    • Aleshesume zore alu!

      “WECHO ENTEGELEBETWO WECHO” Y r very sarcastic! When Haileselassie annexed Eritrea his vision was to develop only Ethiopia living aside the Eritreans into misery. This is exactly what y r saying. I repeat “Once the Tadjoura port and rail to Mekelle is completed, any mining company from Ethiopia will jump on it.” Imagine Mekele! It is the mentality and the attitude which should be in place for development. “More to come, stay tuned.” Y believe y ve introduced a short cut and this will improve the situation. Never!
      Without bringing a total change whatever is done the same old story will continue.

  • RIP Girma Asmerom

    So sad about the passing away of Ambassador Girma Asmerom. He was a loyal pubic servant and represented Eritrea at the United Nations in New York, Africa Union in Addis Ababa, European Union in Brussels and Washington, DC, RIP. He will be missed.

  • Miriam saleh

    Former PFJD gang who decepted Aster to go to Eritrea get arrested has passed away. It sad day for Eritrea this thug has gone naturally instead of suffocate to death at the very cell where where Aster is locked.

    • Ebay-Asmara

      Kidi hasawit. STFU, you don’t care abt Aster or anyone else. You’re just using her as a political tool. Go be a hoe to ur jihadist azzholes, instead. Shermuta!

  • Ethio

    I think both government has to bare their share of blame when it comes to paralyzing people to people relation on both country.
    But if that is the outcome then both country has to face the consequence so no more winning and crying. So Eritreans as you support your gov’t despite your faced the harsh condition on this particular issue we Ethiopians do support our gov’t too.

    • WECHO ENTEGELEBETWO WECHO

      It is really painful to see y both in this forum. This is because “chehotene kemuge”. We repeatdly said the same thing is hapenning i.e the fault of Haileselassie and Mengistu had created a lot of destruction and loss of many untimely death from both countries. Y r repeating the same old story. We r doing our best to the benefit of our people and country. For heaven sake go away from this forum.

      • Ethio

        Why i am painfull to you man? By now these two brotherly people should enjoyed all the development at it gets and benefit from it. The Ethiopian government doing all it can by giving love and bellongingnes to Eritreans. But the other side is doing everything to sustain the hate by putting a gasoline on already raging fire. I feel sad about it but we can’t denied the fact that there is hate atmosphere that is planted among the peoples. I wish i said it differently but i just call a spade is spade.

  • Pingback: Ethiopia Accused Allana Potash for Tax Evasion()