This article was updated on 18th September 2018.
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Welcome to Israel
Bordering the Mediterranean Sea, Israel is located between Lebanon and Egypt. With a total land mass of 20,770 km2 and a population of 8.547 million as of 2016, Israel has a mostly temperate climate throughout the year.
|The national flag of Israel.
Image Credit: CIA Factbook
While the tensions between Israeli and Palestine have marred this nation’s progress to a certain extent, Israel has a very technologically advanced market economy that is supported by a significant inflow of foreign investments. In fact, as of 2016, Israel’s GDP reached $318.7 billion USD.
The natural resources of Israel include potash, copper ore, natural gas, phosphate rock, magnesium bromide, clays and sand. Additionally, cut diamonds are one of the leading exports of the country, which otherwise is primarily dependent on crude oil and raw material imports. The discovery of natural gas fields located near the coast of Israel have successfully transformed the nation’s energy prospect in a big way. In fact, it is estimated that approximately 2.4 trillion cubic feet of natural gas is present within the Karish and Tanin gas deposits, which were originally discovered in 2009 and 2010, respectively2.
Overview of Resources
Each year, Israel exports approximately 45 million tons of potash, a useful fertilizer, thereby making this country the fourth largest exporter of the product following Canada, Russia and Germany3. Additionally, the high salinity of the waters allow for Israel to be a leading exporter of magnesium bromide, which is a useful mineral found in numerous sedatives and anti-convulsant medications.
The natural gas exports of Israel have organised with a deal worth about $15 billion USD4 with the Egyptian company Dolphinus Holdings. The extracted gas being sent to Egypt will be acquired from Tamar and Leviathan; two deep-water offshore gas fields located in the Mediterranean Sea. The Leviathan gas field is one of the largest offshore natural gas discoveries in recent times.
The national map of Israel. Image Credit: CIA Factbook
Since the construction of its first plant in 1995, Dead Sea Magnesium Ltd., a subsidiary of Israel Chemicals Ltd. (ICL), has remained a principal producer of different forms of magnesium and magnesium alloys in Israel. The present production rates of Dead Sea Magnesium is approximately 33,000 TPY.
Industrial Minerals and Gemstones
Although Israel is not directly involved in the production of rough diamonds, the country has a globally recognized market that is well known for its diamond cutting, trading and polishing companies; specializing in large, high-value gemstones. In fact, Israel is considered to have one of the most advanced diamond polishing and processing technologies in the world, as these factories utilize various advanced techniques including lasers for diamond cutting processes, brutting machines, automatic polishing machines and computer aided design systems5.
Dead Sea Bromine Group (DSBG), a subsidiary of ICL, was involved in the extraction of brines and carnallite from the Dead Sea in 2010. By 2016, Israel’s production of bromine reached 170,000 tons as a result of the increased global demands for this important metal. Note that the Dead Sea is estimated to contain at least 1 billion tons of bromine.
The country’s sulfur requirements are met by imports mainly from Germany, Kazakhstan, Canada, and Russia. Israel’s development has been largely due to the building and road construction sector, which uses a great deal of the raw materials, such as gravel, sand and limestone, which are mined and quarried in the country.
Samedan Mediterranean Sea Inc., a subsidiary of Noble Energy Inc. of the U.S., operates the Mari-B offshore gasfield in the Mediterranean Sea. In 2010, the company’s production of dry natural gas increased to 1.34 billion m3 from 1.18 billion m3 in 2009.
In 2010, Noble had discovered the Leviathan prospect with 450 billion m3 and the previous year it had discovered the Tamar prospect with nearly 240 billion m3 reserves. Similarly, Bontan Corp. revealed that its Mira and the Sarah offshore prospects had 120 and 42 billion m3, respectively. In 2010, two companies of Canada, Zion Oil & Gas Inc. of the U.S. and Adira Energy Ltd., began drilling operations at onshore Joseph license and onshore Eitan license, respectively.
While these numbers have supported to growth of the Israeli economy, Israel has claimed that by 2030 they will cease to use all diesel fuel, coal and gasoline use in an effort to move towards a more renewable future. This announcement was made during a recent energy conference in Tel Aviv in February 2018, during which Energy Minister Yuval Steinitz claimed that by 20309, Israel will also cease to import cars that run on gasoline and diesel fuel. This effort will require a substantial amount of support, as natural gas currently dominates the Israeli market by 70% and coal remains the second largest power source currently used in the country.
The government of Israel is keen on promoting its mining sector, as well as ensuring a secure environment for investment in this industry.
The Mining Unit of Israel managed by the Controller of Mines, which is responsible for the following:
- Ensuring an orderly supply of raw materials to the building and road construction industries around the country
- Ensuring that quarry activity remains consistent with relevant laws and regulations
- Taking action against illegal mining and quarrying activities
The government has initiated a Quarry Rehabilitation Fund to rehabilitate abandoned quarries, allowing these locations to serve other more productive purposes.
Since January of 2018, Potash Corporation of Saksatechwan, Canada has agreed to sell its entire holding in Israeli Chemicals of 13.8%, an offer which amounted to approximately $700 million USD. Since this decision, the share price for Israel Chemicals has risen by approximately 10%, which is a total share worth of approximately $19 billion USD in the Tel Aviv and New York stock exchanges10.
Following the implementation of a gas export policy in 2013 that allowed Israel to export approximately 40% of its newly discovered natural gas reservoirs, Israel has discovered that their country is home to more gas than it can actually use. Currently, Noble Energy and its Israeli partneres are investing approximately $3.75 billion to extend the Leviathan gas field from the Haifa coast; a project that is almost 30% complete.
The mineral sector of Israel has positive prospects given that the strength of the country’s economy and global market trends remain stable.
Disclaimer: The Author of this article does not imply any investment recommendation and some content is speculative in nature. The Author is not affiliated in any way with any companies mentioned and all statistical information is publically available.