As Israel Chemicals Profits Soar, the Dead Sea Suffers

The Dead Sea from far above: note the divided northern and “southern” portions.

The Dead Sea, besides being declared a candidate for one the earth’s 7 New World Wonders is also the site of one of Israel’s oldest and most lucrative chemical industries, the Dead Sea Works. This company, along with those operating in Jordan are being accused of causing considerable damage to both the Dead Sea itself,  and to the area’s tourism industry; especially the hotels on Israel’s side of the world’s saltiest body of water.

Despite these ongoing environmental issues, Israel Chemicals, owners of the Dead Sea Works, recently declared operating profits of 41 percent due to rising potash prices, according the Marker.

Closer view of Dead Sea Works evaporation ponds – and cause of rising waters near Dead Sea hotels

The big increase in operating profits are due to a combination of factors, including a strong Israeli Shekel, and a sharp rise in the price of potash (one of the Dead Sea’s chief products) and phosphate fertilizer prices. The Dead Sea Works is one of the area’s oldest industries, with operations dating back to Mandatory Palestine times.

Both Israel and Jordan have been reaping profits from chemicals extracted from the Dead Sea with one of the largest customers being India, whose sharply increasing population, now said to be well over a billion souls, has resulted in a high demand for quality fertilizers.

Recent problems from global warming and climate change on the Sub-Continent, however, has resulted in severe drought in many agricultural regions in India.  As a result, this has  caused a drop in potash orders for both Israel and Jordan which resulted in companies like Dead Sea Works to have a problem with their potash contracts to India, due to falling demand.

Storing Dead Sea minerals prior to shipping

This situation has changed, however, with sales to other countries; including potash sales to Brazil at $550 per ton and penetration into the US market, where potash prices reach $600 per ton. This helped ICL achieve a relatively high $449 per ton average sales price.

ICL also acquired the Spanish specialty fertilizers manufacturer Antonio Fuentes Mendez and the specialty fertilizers division of the American fertilizer company Scotts Miracle-Gro.

These acquisitions contributed $137 million to the growth in sales for ICL.

While all this sounds good for Israel’s Dead Sea chemicals industry, it is definitely a big problem for the ecological condition of the Dead Sea itself. This  is actually causing water levels to rise in lake’s southern portion where man-made evaporation pools have resulted in levels of salt to build up and cause water levels to rise to a point where Israeli hoteliers are fearing that tourism to the Dead sea may be diverted to the Jordanian side.

Rising waters may cause hotels to “float” as well.

Despite previous potash contract problems with India, ICL says that future sales prospects with both India and China are very promising.

Regarding China, a contract was  signed last month to supply China with 500,000 tons of potash by the end of the year at $470 per ton, according to the Haaretz article. As demand for all of the Dead Sea’s minerals, including potash, bromine, and phosphates increases, so will the damage being caused to the “lowest spot on earth” and one of the world’s most interesting natural wonders.

Photos: Dead Sea Works

Read more about Dead Sea eco-issues:

Time Running Out for Saving Dead Sea Hotels

Israeli Hotel Owners Fear Diversion of Dead of Dead Sea Tourism to Jordan

Global Warming Effects in India Hit Israel and Jordan’s Dead Sea Potash

That Sinking Feeling: Dead Sea Sinkhole Swallows Student