Israel's ICL Signs Three-Year Potash Deal with Chinese Customers

JERUSALEM--Shares of leading potash supplier Israel Chemicals Ltd. (ICL.TV) were slightly higher Thursday after the company said it had signed a three-year deal to provide 3.3 million metric tons of potash to a group of Chinese companies, including Zhejiang AMP International, Guangdong Tihane Agriculture Materials Ltd., and Asia Mineral Processing Co.

The price of the potash to be supplied in the contract will be based on current market prices for similar deals, ICL said.

Earlier this week Russian potash producer Uralkali (URKA.RS) said it had agreed to sell a million metric tons of potash to Chinese companies for $400 a ton.

ICL said it will begin supplying the Chinese companies immediately, and has agreed to sell them 660,000 tons of potash during the first half of this year, which would amount to about $264 million, based on the price of the Uralkali deal.

Potash, a potassium-derived compound used in agricultural fertilizer, is produced in large quantities from the minerals in the Dead Sea, which borders Israel, Jordan and the West Bank.

In October, Israel Corp., ICL's biggest shareholder, said it was in talks with Potash Corp. of Saskatchewan Inc. (POT.T), the world's largest fertilizer producer, to increase the Canadian company's 15% stake in ICL, or merge with the Israeli potash maker. The government, which owns special shares in ICL, would have to approve such a deal because it could involve giving a foreign company control over Israel's natural resources. It has said it would consider an official offer.

At 1108 GMT, shares of ICL were up 0.06 shekels, or 0.13%, at ILS47.41 ($12.81), in a lower Tel Aviv market.

Write to Sara Toth Stub at [e-mail]

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