June 17, 2013 / 10:39 AM / 5 years ago

Israel sets up panel to study royalties from natural resources

TEL AVIV, June 17 (Reuters) - Israel’s government has established a committee to examine the policy for collecting royalties from natural resources other than oil and natural gas, the Finance Ministry said on Monday.

The committee will be headed by Eitan Sheshinski, who led a similar panel that made recommendations regarding royalties from oil and gas. Other members of the committee include Eugene Kandel, head of the National Economic Council, Michal Abadi-Boiangiu, the Finance Ministry’s accountant-general, and Michael Sarel, head of the ministry’s economics and state revenues administration department.

The committee “will act to ensure that the government’s share from taxes, royalties and other payments reflects what is due to the public as a result of the use of national natural resources,” the ministry said.

The panel will need to examine mineral extraction from the Dead Sea taking into consideration an agreement signed between the government and Israel Chemicals (ICL) as well as the public debate that followed news that Canada’s Potash Corp was interested in acquiring control of ICL, the ministry said.

ICL struck a deal with Israel’s government in late 2011 to pay 10 percent in royalties on minerals extracted from the Dead Sea. The firm, which has an exclusive permit to extract minerals from the Dead Sea, had previously paid 5 percent royalties.

Finance Minister Yair Lapid said in April he would set up a public committee to re-examine the state’s rights to natural resources managed by private companies. He also said he opposed the sale of ICL to Potash Corp.

Two weeks later Potash Corp, the world’s No. 1 fertiliser producer, said it was abandoning efforts to take over ICL because of strong opposition in Israel.

ICL chief executive Stefan Borgas has said the company pays over 1 billion shekels ($278 million) a year in taxes and royalties, or 35 percent of its domestic profits, and expects the government take to reach 45 percent.

ICL shares were down 3.7 percent to 38.59 shekels in afternoon trade.

The committee will submit its recommendations by June 2014.

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