http://www.globes.co.il/en/article-israel-chemicals-closes-ethiopian-potash-operations-1001155742
Israel Chemicals closes Ethiopian potash operations
Published by Globes [online], Israel business news - www.globes-online.com - on October 6, 2016
ICL said it would write off $170 million and accuses the Ethiopian government of not providing infrastructures and a regulatory framework.
Israel Chemicals (TASE: ICL: NYSE: ICL) has notified the TASE and NYSE that it is closing down its potash operations in Ethiopia. ICL said it will write off $170 million, which is the net book value of the project.
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."
However, ICL now accuses the Ethiopian government of "failure to provide the necessary infrastructures and regulatory framework for the project." ICL added that "This follows the Ethiopian Tax Authority's rejection of Allana Afar's appeal regarding the unjustified and illegal tax assessment, which Allana Afar has declined to pay."
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MARKET NEWS | Thu Oct 6, 2016 | 6:49am EDT
Israel Chemicals ends potash project in Ethiopia
JERUSALEM, Oct 6 (Reuters) -
* Israel Chemicals (ICL) said on Thursday its board had decided to terminate its potash project in Ethiopia.
* ICL, one of the largest suppliers of crop nutrient potash to China, India and Europe, cited the Ethiopian government's "failure to provide the necessary infrastructures and regulatory framework" for the project.
* It also follows the Ethiopian tax authority's "rejection of Allana Afar's appeal regarding the unjustified and illegal tax assessment, which Allana Afar has declined to pay".
* Allana Afar is a unit of ICL.
* The Ethiopian project was meant to be an alternative source of potash in case ICL failed to get its Israeli Dead Sea licence renewed after 2030 as well as an uncertain business and regulatory environment in Israel.
* ICL said the net book value of the investment in the project as of June 30 was $170 million. It will recognise in its financial reports an impairment of the investment amount as well as a provision for expected closing costs. (Reporting by Steven Scheer)
http://www.reuters.com/article/icl-ethiopia-potash-idUSL5N1CC2C8
Received on Thu Oct 06 2016 - 10:01:11 EDT