0000941221icl:TradeAndOtherCurrentReceivablesMembericl:UsDollarCurrencyRiskMember 2022-01-01 2022-12-31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 20-F
(Mark One)
| ☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
| ☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the fiscal year ended December 31, | ||
OR
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
| ☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Date of event requiring this shell company report __________________ | ||
For the transition period from |
Commission File Number: 001-13742
(Exact name of Registrant as specified in its charter)
N/A
(Translation of Registrant’s name into English)
Israel
(Jurisdiction of incorporation or organization)
Millennium Tower, 23 Aranha Street, P.O. Box 20245 Tel Aviv, 61202 Israel
(Address of principal executive offices)
VP, Chief Compliance Officer & CompanyCorporate Secretary
Millennium Tower, 23 Aranha St.
Tel-Aviv61070256120201 Israel
Tel: +972 (3) 6844440
Millennium Tower, 23 Aranha St.
Tel-Aviv
Tel: +972 (3) 6844440
(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)
Securities registered or to be registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| Ordinary Shares, par value NIS 1.00 per share | ICL | The New York Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital or common stock as of the close of the period covered by the annual report.
The number of outstanding shares as of December 31, 20172023 was:
| Title of Class | Number of Shares Outstanding | |
| Ordinary shares | 1,314,025,336 |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes ☒ No ☐
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Yes ☐ No ☒
Note – Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
Yes ☒ No ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “large accelerated filer,” “accelerated filer,” and large accelerated filer”“emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):Act:
| Large Accelerated Filer ☒ | Accelerated Filer ☐ | Non-accelerated Filer ☐ |
Emerging Growth Company ☐ |
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☒ Accelerated Filer
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐ Non-accelerated Filer
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to § 240.10D-1(b). ☐
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
☐ U.S. GAAP
☒ International Financial Reporting Standards as issued by the International Accounting Standards Board
☐ Other
If “Other” has been checked in response to the previous question, indicate by check mark which financial statement item the Registrant has elected to follow.
☐ Item 17 ☐ Item 18
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes ☐ No ☒
(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
Yes ☐ No ☒
Annual Report
For the Period Ended December 31, 2023
ICL Group Ltd |  |
TABLE OF CONTENTS
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| PART II | |||||
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| 276 | |||||
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278 | |||||
This Annual Report contains statements that constitute “forward‑looking statements,” many of which can be identified by the use of forward‑looking words such as “anticipate,” “believe,” “could,” “expect,” “should,” “plan,” “intend,” “estimate”, "strive", "forecast", "targets" and “potential,” among others. The Company is relying on the safe harbor provided in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, in making such forward-looking statements.
Forward‑looking statements appear in a number of places in this Annual Report and include, but are not limited to, statements regarding our intent, belief or current expectations. Forward‑looking statements are based on our management’s beliefs and assumptions and on information currently available to our management. Such statements are subject to risks and uncertainties, and the actual results may differ materially from those expressed or implied in the forward‑looking statements due to various factors, including, but not limited to, those identified in “Item 3 - Key Information— D. Risk Factors” in this Annual Report. These risks and uncertainties include factors relating to:
Loss or impairment of business licenses or miningmineral extractions permits or concessions; volatility of supply and demand and the impact of competition; the difference between actual reserves and our reserve estimates; natural disasters;disasters and cost of compliance with environmental regulatory legislative and licensing restrictions including laws and regulation related to, and physical impacts of climate change and greenhouse gas emissions; failure to raise"harvest" salt which could lead to accumulation of salt at the water level inbottom of the evaporation Pond 5 in the Dead Sea; construction of a new pumping station;litigation, arbitration and regulatory proceedings; disruptions at our seaport shipping facilities or regulatory restrictions affecting our ability to export our products overseas; changes in exchange rates or prices compared to those we are currently experiencing; general market, political or economic conditions in the countries in which we operate; price increases or shortages with respect to our principal raw materials; pandemics may create disruptions, impacting our sales, operations, supply chain and customers; delays in the completion of major projects by third party contractors and/or termination of engagements with contractors and/or governmental obligations; the inflow of significant amounts of water into the Dead Sea which could adversely affect production at our plants; labor disputes, slowdowns and strikes involving our employees; pension and health insurance liabilities; changes to governmental incentive programs or tax benefits, creation of new fiscal or tax related legislation; and/or higher tax liabilities; changes in our evaluations and estimates, which serve as a basis for the recognition and manner of measurement of assets and liabilities; higher tax liabilities; failure to integrate or realize expected benefits from mergers and acquisitions, organizational restructuring and joint ventures; currency rate fluctuations; rising interest rates; government examinations or investigations; disruption of our information technology systems or breaches of our, or our service providers', data security; failure to retain and/or recruit key personnel; inability to realize expected benefits from our cost reduction program according to the expected timetable; inability to access capital markets on favorable terms; cyclicality of our businesses; The Company is exposed to risks relating to its current and future activity in emerging markets; changes in demand for our fertilizer products due to a decline in agricultural product prices, lack of available credit, weather conditions, government policies or other factors beyond our control; disruption of our, or our service providers', sales of our magnesium products being affected by various factors that are not within our control; our ability to secure approvals and permits from the authorities in Israel to continue our phosphate mining operations in Rotem Amfert Israel; volatility or crises in the financial markets; cost of compliance with environmental legislative and licensing restrictions; hazards inherent to mining and chemical manufacturing; litigation, arbitrationthe failure to ensure the safety of our workers and regulatory proceedings;processes; exposure to third party and product liability claims; product recalls or other liability claims as a result of food safety and food-borne illness concerns; insufficiency of insurance coverage; closing of transactions, mergers and acquisitions; war or acts of terror and/or political, economic and military instability in Israel and its region; including the current state of war declared in Israel and any resulting disruptions to our supply and production chains; filing of class actions and derivative actions against the Company, its executives and Board members; closing of transactions, mergers and acquisitions; and other risk factors discussed under ”Item 3 - Key Information— D. Risk Factors"Factors".
CAUTIONARY NOTE TO INVESTORS REGARDING MINERAL AND RESOURCES ESTIMATES
The US Securities and Exchange Commission (the “SEC”) adopted final rules in 2018 to amend and modernize the mineral property disclosure requirements for issuers whose securities are registered with the SEC under the US Securities Act of 1933, as amended (“Securities Act”), or the US Securities Exchange Act of 1934, as amended (the “Exchange Act”). Pursuant to subpart 1300 of SEC Regulation S-K, beginning with Fiscal Year 2021, ICL began to present new information with respect to its mining and operation plants in its Annual Report, including resource and reserve estimates, which differ materially from the reserve estimates presented prior to Fiscal Year 2021 by ICL.
A Mineral Resource is a resultreasonable estimate of mineralization, taking into account relevant factors, such as cut-off grade, likely mining dimensions, location or continuity that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.” The Mineral Resources presented in this Annual Report are not Mineral Reserves and do not reflect demonstrated economic viability. The estimates of Mineral Resources may be materially affected if mining, metallurgical, or infrastructure factors at the corresponding properties change from those set forthcurrently assumed by ICL.
Mineral Reserves are reported as the economically mineable portion of a Measured Mineral Resource and/or Indicated Mineral Resource, and take into consideration the mining, processing, metallurgical, economic, marketing, legal, environmental, infrastructure, social, and governmental factors (the “modifying factors”) that may be applicable to the deposit. Mineral Resources that are not Mineral Reserves do not meet the threshold for reserve modifying factors, such as estimated economic viability, that would allow for conversion to Mineral Reserves. There is no certainty that all or any part of a Mineral Resource will be converted into a Mineral Reserve. Estimates of Inferred Mineral Resources have significant geological uncertainty, and it should not be assumed that all or any part of an Inferred Mineral Resource will be converted to the Measured or Indicated categories.
Figures related to our mineral and resource estimates are rounded to reflect the relative accuracy of the estimates, and totals may not add correctly. In addition, the Mineral Resource and Reserve estimates are based on the factors related to the geological and grade models discussed in “Item 3. Key Information—4 ‑ Information on the Company— D. Risk Factors”Property, Plant and ”Item 5. OperatingEquipment,” and Financial Reviewthe criteria for reasonable prospects of eventual economic extraction as described therein. The Mineral Resource and Prospects.”Reserve estimates may be affected, positively or negatively, by additional exploration that expands the geological database and models of the properties described. The Mineral Resource and Reserve estimates could also be materially affected by any significant changes in the assumptions regarding forecast product prices, mining efficiency, process recoveries, or production costs. If the price assumptions decrease or the assumed production costs increase, then the cut-off grade would increase. The potential impacts on the Mineral Resource and Reserve estimates may be material and such estimates may need to be re-evaluated. The Mineral Resource and Reserve estimates are also based on certain critical assumptions, such as requisite mining permits continuing to be granted as-needed, tax rates remaining stable, and the absence of additional regulations on the corresponding properties. Except as described in “Item 4 ‑ Information on the Company— D. Property, Plant and Equipment” and the Technical Report Summary (defined below), Wardell Armstrong International Ltd (“Wardell”), our qualified persons, are not aware of any environmental, permitting, legal, title, taxation, socio-economic, marketing, political, or other relevant factors that could materially affect the Mineral Resource estimates.
INTRODUCTION
The financial information included in this Annual Report has been prepared in accordance with the International Financial Reporting Standards (“IFRS”), as issued by the International Accounting Standards Board (“IASB”). None of the financial information in this Annual Report has been prepared in accordance with accounting principles generally accepted in the United States.US.
This Annual Report contains translations of certain NIScurrencies amounts into U.S.US dollars at specified rates solely for your convenience. Unless otherwise indicated, we have translated NIS amounts as atof December 31, 2017,2023, into U.S.US dollars at an exchange rate of NIS 3.467 to $1.00, and euro amounts into U.S. dollars at an exchange rate of €0.8353.627 to $1.00, the daily representative exchange rate reported by the Bank of Israel foras of December 31, 2017.2023. Euro amounts were translated into US dollars at an exchange rate of €0.9 to $1.00.
Market data and certain industry data used in this Annual Report were obtained from internal reports and studies, where appropriate, as well as estimates, market research, publicly available information and industry publications, including publications, reports or releases of the International Monetary Fund (“IMF”), the U.S.US Census Bureau, the Food and Agriculture Organization of the United Nations (“FAO”), the International Fertilizers Association (“IFA”), the United States Department of Agriculture (the “USDA”(“USDA”) and, the United States Geological Survey.Survey, the CRU Group ("CRU") and Fertecon, the Fertilizer Association of India (“FAI”). Industry publications generally state that the information they include has been obtained from sources believed to be reliable, but that the accuracy and completeness of such information isare not guaranteed. Similarly, internal reports and studies, estimates and market research, which we believe to be reliable and accurately extracted by us for use in this Annual Report, have not been independently verified. However, we believe such data is accurate. There is only a limited amount of independent data available about certain aspects of our industry, market, and competitive position. As a result, certainsome data and information about our market rankings in certain product areas are based on our good faith estimates, which are derived from our review of internal data and information, information that we obtain fromour customers, and other third-partythird-party sources. We believe these internal surveys and management estimates are reliable; however, no independent sources have verified such surveys and estimates.
In presenting and discussing our financial position, operating results and cash flows,net income results, the management uses certain non-IFRS financial measures. These non-IFRS financial measures should not be viewed in isolation or as alternatives to the equivalent IFRS measures and should be used in conjunction with the most directly comparable IFRS measures. A discussion of non-IFRS measures included in this Annual Report and a reconciliation of such measures to the most directly comparable IFRS measures are contained in this Annual Report under “Item 3 - Key Information—5 – Financial Results and Business Overview — A. Selected Financial Data”Operating Results”.
In this Annual Report, unless otherwise indicated or the context otherwise requires, all references to “ICL,” the “Group,” the “Company,” “we,” “our,” “ours,” “us” or similar terms refer to Israel ChemicalsICL Group Ltd., together with its consolidated subsidiaries. When we refer to our “parent company”Company” or to “Israel Corporation,Corp.,” we refer to our controlling shareholder, Israel Corporation.CorporationLtd. Unless otherwise indicated or the context otherwise requires, references in this Annual Report to “NIS” are to the legal currency of Israel, “U.S.“US dollars”, “$” or “dollars” are to United States dollars, “euro” or “€” are to the Euro,euro, the legal currency of certain countries of the European Union,EU, and “British pound” or “£” are to the legal currency of the United Kingdom.UK. See “Item 4 - Information on the Company— A. History and Development of the Company”. We own or have rights to trademarks or trade names that we use in conjunction with the operation of our business. Solely for convenience, trademarks and trade names referred to in this Annual Report may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent of the law, our rights or the rights of the applicable licensor to these trademarks and trade names. In this Annual Report, we also refer to product names, trademarks, and trade names that are the property of other companies. Each of the trademarks and trade names of other companies appearing in this Annual Report belongs to its owners. Our use or display of other companies’ product names, trademarks, or trade names is not intended to and does not imply a relationship with, or endorsement or sponsorship by us of, the product, trademark, or trade name owner, unless we otherwise indicate.
The following is a glossary of selected terms used in this Annual Report.
| Bromine | A chemical element used as a basis for a wide variety of uses and compounds, and mainly as a component in flame retardants or fire prevention substances. Unless otherwise stated, the term “bromine” refers to elemental bromine. |
| CDP | Carbon Disclosure Project – A leading non-profit organization in the greenhouse gas emissions reporting field. |
| CFR | Cost and |
| CPI | The Consumer Price Index, as published by |
| CRU | Intelligence Company that provides information on global mining, metal and fertilizers market. |
| ICL ADS | ICL América do Sul (formerly Compass Minerals América do Sul S.A.). |
| Dead Sea Bromine | Dead Sea Bromine |
| GTSP | Granular Triple Superphosphate, used as fertilizer, a source of high phosphorus. |
| GSSP | Granular Single Superphosphate, used as a phosphate fertilizer. |
| Green Hydrogen | Hydrogen produced by splitting water into hydrogen and oxygen using renewable electricity. |
| DAP | Diammonium Phosphate - a fertilizer containing nitrate and phosphorus oxide. |
| EPA | |
| EU | European Union. |
| FAO | The Food and Agriculture Organization of the United |
| FOB | Free |
| Cost Per Tonne. | |
CIF | Cost, Insurance, and Freight. In CIF transaction, the price of goods includes, as well as FOB expenses, the expenses for insurance, shipping and any other costs that arise after the goods leave the factory gates and up to the destination port. |
| ICL Haifa (Fertilizers & Chemicals) | Fertilizers and Chemicals |
| Greenhouse Gases – air emissions contributing to climate change. | |
| Granular | Fertilizer having granular particles. |
| ICL Boulby | A UK subsidiary in the Potash segment. |
| ICL Iberia (Iberpotash) | Iberpotash S.A., a Spanish |
| IC | Israel Corporation Ltd. |
| That part of a mineral resource for which quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit. Because an indicated mineral resource has a lower level of confidence than the level of confidence of a measured mineral resource, an indicated mineral resource may only be converted to a probable mineral reserve. |
| Inferred Mineral Resource | That part of a mineral resource for which quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability. Because an inferred mineral resource has the lowest level of geological confidence of all mineral resources, which prevents the application of the modifying factors in a manner useful for evaluation of economic viability, an inferred mineral resource may not be considered when assessing the economic viability of a mining project and may not be converted to a mineral reserve. |
| DSW | Dead Sea Works Ltd., |
| DSM | Dead Sea Magnesium Ltd., a subsidiary in the Potash segment. |
| ICL Neot Hovav | Subsidiaries in the Neot Hovav area in the south of Israel, including facilities of Bromine Compounds |
| Rotem Amfert Negev Ltd., | |
| IFA | The International Fertilizers Industry Association, an international association of fertilizers manufacturers. |
| ILA | Israel |
| IMF | International Monetary Fund. |
| K | The element potassium, one of the three main plant nutrients. |
KNO3 | Potassium Nitrate, a soluble fertilizer containing N&P used as a stand-alone product or as a key component of some water-soluble blends. |
| KOH | Potassium hydroxide 50% liquid. |
| MGA | Merchant grade phosphoric acid. |
| Measured Mineral Resource | That part of a mineral resource for which quantity and grade or quality are estimated and based on conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors, as defined in this section, in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit. Because a measured mineral resource has a higher level of confidence than the level of confidence of either an indicated mineral resource or an inferred mineral resource, a measured mineral resource may be converted to a proven mineral reserve or to a probable mineral reserve. |
| Mineral Reserve | An estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted. |
| Mineral Resource | A concentration or occurrence of material of economic interest in or on the Earth's crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled. |
| MoEP | Israel Ministry of Environmental Protection. |
| N | The element nitrogen, one of the three main plant nutrients. |
| P | The element phosphorus, one of the three main plant nutrients, which is also used as a raw material in industry. |
| NYSE | The New York Stock Exchange. |
| Phosphate | Phosphate rock that contains the element phosphorus. Its concentration is measured in units of P2O5. |
| Polyhalite | A mineral |
| Probable Mineral Reserve | The economically mineable part of an Indicated and, in some cases, a Measured Mineral Resource. Quantity, grade and/or quality of Probable Mineral Reserves are computed from information similar to that used for Proven Mineral Reserves, but the sites for survey, sampling and measurement are further apart or are otherwise less efficiently spaced. The degree of assurance, although lower than that for proven reserves, is high enough to assume continuity between points of observation. |
| Proven Mineral Reserve | The economically mineable part of a Measured Mineral Resource. Proven Mineral Reserve quantities are computed from information received from explorations, channels, wells, and drilling; grade and/or quality are computed from the results of detailed sampling. The sites for inspection, sampling and measurement for proven reserves are spaced so closely to each other so that the geologic character is well defined so the size, shape, depth and mineral content of reserves can be reliably determined. |
| Chlorine | A chemical, raw material in various productions process. A byproduct of Dead Sea Magnesium production. |
| Sylvinite | A byproduct from the production of Magnesium from the raw material – Carnallite. Transferred to DSW as an additional source for potash production. |
| Polymer | A chemical compound containing a long chain of repeating units linked by a chemical bond and created by polymerization. |
| Potash | Potassium chloride (KCl), used as a plant’s main source of potassium. |
P2O5 | Phosphorus pentoxide. |
| REACH | Registration, Evaluation, Authorization and |
| Reserves | The part of a mineral deposit that could be economically and legally extracted or produced at the time of the Mineral Reserve determination. Reserves are divided between “proven reserves” and “probable reserves”. |
| Salt | Unless otherwise specified, sodium chloride (NaCl). |
| S | Sulphur – a chemical used for the production of sulfuric acid for sulfate and phosphate fertilizers, and other chemical processes. |
| Soluble NPK | Soluble fertilizer containing the three basic elements for plant development (nitrogen, phosphorus and potash). |
| Tami | Tami (IMI) Research and Development Institute Ltd., the central research institute of ICL. |
| TASE | Tel Aviv Stock Exchange, Ltd. |
| USDA | United States Department of Agriculture. |
| WPA | White Phosphoric Acid, purified from MGA. |
| UK | The United Kingdom. |
| Urea | A white granular or |
| YTH/YPC | The Chinese partner in the Company’s joint venture YPH in China. |
| 4D | Clean green phosphoric acid, used as a raw material for purification processes. |
| PM | Particular matter. |
Not Applicable.
Not Applicable.
A. SELECTED FINANCIAL DATA
We have derived the consolidated statements of income data for the years ended December 31, 2017, 2016, 2015, 20142023, 2022 and 20132021 and the consolidated statements of financial position as of December 31, 2017, 2016, 2015, 20142023, 2022 and 20132021 from our audited consolidated financial statements which have been prepared in accordance with IFRS, as issued by the IASB for the years ended, December 31, 2017, 2016, 2015, 20142023, 2022 and 2013.2021. You should read the consolidated financial data set forth below in conjunction with our consolidated audited financial statements and related notes and the information under “Item 5 - OperatingFinancial Results and Financial Review and Prospects”Business Overview”, appearing elsewhere in this Annual Report. Our reporting currency is the U.S.US dollar. Our historical results are not necessarily indicative of our results to be expected in any future period.
ICL Group Limited 1
Selected financial data:
| For the Years Ended December 31, | |||
| 2023 | 2022 | 2021 | |
| US$ millions | |||
Sales | 7,536 | 10,015 | 6,955 |
Gross profit | 2,671 | 5,032 | 2,611 |
Operating income | 1,141 | 3,516 | 1,210 |
Income before taxes on income | 974 | 3,404 | 1,092 |
Net income attributable to the shareholders of the Company | 647 | 2,159 | 783 |
| Earnings per share (in dollars): | |||
Basic earnings per share | 0.50 | 1.68 | 0.61 |
Diluted earnings per share | 0.50 | 1.67 | 0.60 |
| Weighted average number of ordinary shares outstanding: | |||
Basic (in thousands) | 1,289,361 | 1,287,304 | 1,282,807 |
Diluted (in thousands) | 1,290,668 | 1,289,947 | 1,287,051 |
Dividends declared per share (in dollars) | 0.27 | 0.91 | 0.21 |
| For the Years Ended December 31, | |||
| 2023 | 2022 | 2021 | |
| US$ millions | |||
| Statements of Financial Position Data: | |||
Total assets | 11,627 | 11,750 | 11,080 |
Total liabilities | 5,590 | 6,037 | 6,344 |
Total equity | 6,037 | 5,713 | 4,736 |
ICL Group Limited 2
| For the Year Ended December 31, | |||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |
| US$ millions, except for the share data | |||||
| Sales | 5,418 | 5,363 | 5,405 | 6,111 | 6,272 |
| Gross profit | 1,672 | 1,660 | 1,803 | 2,196 | 2,410 |
| Operating income (loss) | 629 | (3) | 765 | 758 | 1,101 |
| Income (loss) before income taxes | 505 | (117) | 668 | 632 | 1,101 |
| Net income (loss) attributable to the shareholders of the Company | 364 | (122) | 509 | 464 | 819 |
| Earnings (loss) per share (in dollars) : | |||||
| Basic earnings (loss) per share | 0.29 | (0.10) | 0.40 | 0.37 | 0.64 |
| Diluted earnings (loss) per share | 0.29 | (0.10) | 0.40 | 0.37 | 0.64 |
| Weighted average number of ordinary shares outstanding: | |||||
| Basic (in thousands) | 1,276,072 | 1,273,295 | 1,271,624 | 1,270,426 | 1,270,414 |
| Diluted (in thousands) | 1,276,997 | 1,273,295 | 1,272,256 | 1,270,458 | 1,270,414 |
| Dividends declared per common share (in dollars) | 0.13 | 0.18 | 0.28 | 0.67 | 0.50 |
| As at December 31, | |||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |
| US$ millions | |||||
| Statements of Financial Position Data : | |||||
| Total assets | 8,714 | 8,552 | 9,077 | 8,348 | 7,973 |
| Total liabilities | 5,784 | 5,893 | 5,889 | 5,348 | 4,294 |
| Total equity | 2,930 | 2,659 | 3,188 | 3,000 | 3,679 |
We disclose in this Annual Report non-IFRS financial measures titled adjusted operating income and adjusted net income attributable to the Company’s shareholders. Our management uses these adjusted operating income and adjusted net income attributable to the Company’s shareholdersmeasures to facilitate operating performance comparisons from period to period. We calculate our adjusted operating income by adjusting our operating income to addadding certain items, as set forth in the reconciliation table below. CertainSome of these items may recur.recur. We calculate our adjusted net income attributable to the Company’s shareholders by adjusting our net income attributable to the Company’s shareholders to addadding certain items, as set forth in the reconciliation table below, excluding the total tax impact of such adjustments and adjustments attributable to the non-controlling interests.adjustments.
You should not view adjusted operating income or adjusted net income attributable to the Company’s shareholders as a substitute for operating income or net income attributable to the Company’s shareholders as determined in accordance with IFRS, and you should note that our definitions of adjusted operating income and adjusted net income attributable to the Company’s shareholders may differ from those used by other companies. Additionally, other companies may use other measures to evaluate their performance, which may reduce the usefulness of our non-IFRS financial measures as tools for comparison. However, we believe adjusted operating income and adjusted net income attributable to the Company’s shareholders provide useful information to both management and investors by excluding certain expensesitems that management believes are not indicative of our ongoing operations. Our management uses these non-IFRS measures to evaluate the Company's business strategies and management's performance. We believe that these non-IFRS measures provide useful information to investors because they improve the comparability of theour financial results between periods and provide for greater transparency of key measures used to evaluate our performance.
ICL Group Limited 3
The table below reconciles total adjusted operating income and total adjusted net income attributable to the shareholders of the Company,, to the comparable IFRS measures:
| For the Year Ended December 31, | |||
| 2023 | 2022 | 2021 | |
| US$ millions | |||
| For the Year Ended December 31, | |||||
| 2017 | 2016 | 2015 | 2014 | 2013 | |
| US$ millions | |||||
| Operating income (loss) | 629 | (3) | 765 | 758 | 1,101 |
| Impact of employee strike (1) | - | - | 248 | 17 | - |
| Capital (gain) loss (2) | (54) | 1 | (215) | (36) | - |
| Write-down and impairment of assets (3) | 32 | 489 | 90 | 71 | 10 |
| Provision for early retirement and dismissal of employees (4) | 20 | 39 | 48 | - | 60 |
| Provision for legal claims (5) | 25 | 5 | 38 | 149 | - |
| Provision for historical waste removal (6) | - | 51 | 20 | - | 25 |
| Other | - | - | - | 1 | - |
| Total adjustments to operating income (loss) | 23 | 585 | 229 | 202 | 95 |
| Adjusted operating income | 652 | 582 | 994 | 960 | 1,196 |
| Net income (loss) attributable to the shareholders of the Company | 364 | (122) | 509 | 464 | 819 |
| Total adjustments to operating income (loss) | 23 | 585 | 229 | 202 | 95 |
| Adjustments to finance expenses (7) | - | 38 | - | 31 | - |
| Total tax impact of the above operating income & finance expenses adjustments | (4) | (81) | (58) | (64) | (20) |
| Tax assessment and deferred tax adjustments (8) | 6 | 36 | 19 | 62 | 118 |
| Adjustments attributable to the non-controlling interests | - | (5) | - | - | - |
| Total adjusted net income - shareholders of the Company | 389 | 451 | 699 | 695 | 1,012 |
| Operating income | 1,141 | 3,516 | 1,210 |
Provision for early retirement (1) | 16 | - | - |
Write-off of assets and provision for site closure (2) | 49 | - | 1 |
Legal proceedings, dispute and other settlement expenses (3) | (2) | 22 | 5 |
Charges related to the security situation in Israel (4) | 14 | - | - |
Divestment related items and transaction costs (5) | - | (29) | (22) |
| Total adjustments to operating income | 77 | (7) | (16) |
| Adjusted operating income | 1,218 | 3,509 | 1,194 |
| Net income attributable to the shareholders of the Company | 647 | 2,159 | 783 |
| Total adjustments to operating income | 77 | (7) | (16) |
Total tax adjustments (6) | (9) | 198 | 57 |
| Total adjusted net income - shareholders of the Company | 715 | 2,350 | 824 |
| (1) | For 2023, reflects provisions for early retirement, due to restructuring at certain sites, as part of the Company’s global efficiency plan. |
| (2) |
| (3) | For 2023, reflects a reversal of a legal provision. For 2022, reflects mainly the costs of a mediation settlement regarding the claims related to the Ashalim Stream incident. For 2021, reflects mainly settlement costs related to the termination of a partnership between ICL Iberia and Nobian, as well as reimbursement of arbitration costs related to a potash project in Ethiopia. |
| (4) | For 2023, reflects charges relating to |
| (5) | For 2022, reflects a |
| (6) |
| Current assets | ||||
| Cash and cash equivalents | 83 | - | 83 | |
| Short-term investments and deposits | 90 | - | 90 | |
| Trade receivables | 932 | 7 | b1 | 939 |
| Inventories | 1,226 | - | 1,226 | |
| Assets held for sale | 169 | (169) | b2 | - |
| Other receivables | 225 | 11 | b1, b3 | 236 |
| Total current assets | 2,725 | (151) | 2,574 | |
| Non-current assets | ||||
| Investments in equity-accounted investees | 29 | - | 29 | |
| Financial assets available for sale | 212 | - | 212 | |
| Deferred tax assets | 132 | - | 132 | |
| Property, plant and equipment | 4,521 | - | 4,521 | |
| Intangible assets | 722 | - | 722 | |
| Other non-current assets | 373 | 53 | 426 | |
| Total non-current assets | 5,989 | 53 | 6,042 | |
| Total assets | 8,714 | (98) | 8,616 | |
| Current liabilities | ||||
| Short-term credit | 822 | (65) | b3 | 757 |
| Trade payables | 790 | - | 790 | |
| Provisions | 78 | - | 78 | |
| Liabilities held for sale | 43 | (43) | b2 | - |
| Other current liabilities | 595 | - | 595 | |
| Total current liabilities | 2,328 | (108) | 2,220 | |
| Non-current liabilities | ||||
| Long-term debt and debentures | 2,388 | (765) | b3 | 1,623 |
| Deferred tax liabilities | 228 | - | 228 | |
| Long-term employee provisions | 640 | - | 640 | |
| Provisions | 193 | - | 193 | |
| Other non-current liabilities | 7 | - | 7 | |
| Total non-current liabilities | 3,456 | (765) | 2,691 | |
| Total liabilities | 5,784 | (873) | 4,911 | |
| Equity | ||||
| Total shareholders’ equity | 2,859 | 775 | 3,634 | |
| Non-controlling interests | 71 | - | 71 | |
| Total equity | 2,930 | 775 | 3,705 | |
| Total liabilities and equity | 8,714 | (98) | 8,616 |
| Sales | 5,418 | (309) | - | 5,109 | ||
| Cost of sales | 3,746 | (165) | - | 3,581 | ||
| Gross profit | 1,672 | (144) | - | 1,528 | ||
| Selling, transport and marketing expenses | 746 | (15) | - | 731 | ||
| General and administrative expenses | 261 | (12) | 10 | c1 | 259 | |
| Research and development expenses | 55 | (1) | - | 54 | ||
| Other expenses | 90 | - | - | 90 | ||
| Other income | (109) | - | - | (109) | ||
| Operating income | 629 | (116) | (10) | 503 | ||
| Finance expenses | 229 | - | (17) | c2 | 212 | |
| Finance income | (105) | - | - | (105) | ||
| Finance expenses, net | 124 | - | (17) | 107 | ||
| Income before income taxes | 505 | (116) | 7 | 396 | ||
| Provision for income taxes | 158 | (39) | b1 | 2 | 121 | |
| Net income | 347 | (77) | 5 | 275 | ||
| Net loss attributable to the non-controlling interests | (17) | - | - | (17) | ||
| Net income attributable to the shareholders of the Company | 364 | (77) | 5 | 292 | ||
| Earnings per share attributable to the shareholders of the Company: | ||||||
Basic earnings per share (in dollars) | 0.29 | 0.23 | ||||
Diluted earnings per share (in dollars) | 0.29 | 0.23 | ||||
| Weighted-average number of ordinary shares outstanding: | ||||||
| Basic (in thousands) | 1,276,072 | 1,276,072 | ||||
| Diluted (in thousands) | 1,276,997 | 1,276,997 |
| Sales | 5,363 | (245) | - | 5,118 | ||
| Cost of sales | 3,703 | (144) | - | 3,559 | ||
| Gross profit | 1,660 | (101) | - | 1,559 | ||
| Selling, transport and marketing expenses | 722 | (14) | - | 708 | ||
| General and administrative expenses | 321 | (8) | 5 | c1 | 318 | |
| Research and development expenses | 73 | (2) | - | 71 | ||
| Other expenses | 618 | - | - | 618 | ||
| Other income | (71) | 2 | - | (69) | ||
| Operating loss | (3) | (79) | (5) | (87) | ||
| Finance expenses | 157 | - | (17) | c2 | 140 | |
| Finance income | (25) | - | - | (25) | ||
| Finance expenses, net | 132 | - | (17) | 115 | ||
| Share in earnings of equity-accounted investees | 18 | - | - | 18 | ||
| Loss before income taxes | (117) | (79) | 12 | (184) | ||
| Provision for income taxes | 55 | (28) | b1 | 4 | 31 | |
| Net loss | (172) | (51) | 8 | (215) | ||
| Net loss attributable to the non-controlling interests | (50) | - | - | (50) | ||
| Net loss attributable to the shareholders of the Company | (122) | (51) | 8 | (165) | ||
| Loss per share attributable to the shareholders of the Company: | ||||||
Basic loss per share (in dollars) | (0.10) | (0.13) | ||||
Diluted loss per share (in dollars) | (0.10) | (0.13) | ||||
| Weighted-average number of ordinary shares outstanding: | ||||||
| Basic (in thousands) | 1,273,295 | 1,273,295 | ||||
| Diluted (in thousands) | 1,273,295 | 1,273,295 |
| Sales | 5,405 | (226) | - | 5,179 | ||
| Cost of sales | 3,602 | (138) | - | 3,464 | ||
| Gross profit | 1,803 | (88) | - | 1,715 | ||
| Selling, transport and marketing expenses | 653 | (14) | - | 639 | ||
| General and administrative expenses | 350 | (8) | 5 | c1 | 347 | |
| Research and development expenses | 74 | (2) | - | 72 | ||
| Other expenses | 211 | - | - | 211 | ||
| Other income | (250) | - | - | (250) | ||
| Operating income (loss) | 765 | (64) | (5) | 696 | ||
| Finance expenses | 160 | - | (17) | c2 | 143 | |
| Finance income | (52) | - | - | (52) | ||
| Finance expenses, net | 108 | - | (17) | 91 | ||
| Share in earnings of equity-accounted investees | 11 | - | - | 11 | ||
| Income before income taxes | 668 | (64) | 12 | 616 | ||
| Provision for income taxes | 162 | (23) | b1 | 3 | 142 | |
| Net income | 506 | (41) | 9 | 474 | ||
| Net loss attributable to the non-controlling interests | (3) | - | - | (3) | ||
| Net income attributable to the shareholders of the Company | 509 | (41) | 9 | 477 | ||
| Earnings per share attributable to the shareholders of the Company: | ||||||
Basic earnings per share (in dollars) | 0.40 | 0.38 | ||||
Diluted earnings per share (in dollars) | 0.40 | 0.37 | ||||
| Weighted-average number of ordinary shares outstanding: | ||||||
| Basic (in thousands) | 1,271,624 | 1,271,624 | ||||
| Diluted (in thousands) | 1,272,256 | 1,272,256 |
| Net income | 347 | (72) | 275 | |
| Components of other comprehensive income that will be reclassified subsequently to net income (loss) | ||||
| Currency translation differences | 152 | (8) | b1 | 144 |
| Changes in fair value of financial assets available for sale | (57) | - | (57) | |
| Tax income relating to items that will be reclassified subsequently to net income (loss) | 5 | - | 5 | |
| 100 | (8) | 92 | ||
| Components of other comprehensive income that will not be reclassified to net income (loss) | ||||
| Actuarial losses from defined benefit plan | (17) | - | (17) | |
| Tax income relating to items that will not be reclassified to net income (loss) | 3 | - | 3 | |
| (14) | - | (14) | ||
| Total comprehensive income | 433 | (80) | 353 | |
| Comprehensive loss attributable to the non-controlling interests | (13) | - | (13) | |
| Comprehensive income attributable to the shareholders of the Company | 446 | (80) | 366 |
| Net loss | (172) | (43) | (215) | |
| Components of other comprehensive income that will be reclassified subsequently to net income (loss) | ||||
| Currency translation differences | (90) | 2 | b1 | (88) |
| Changes in fair value of derivatives designated as a cash flow hedge | (1) | - | (1) | |
| Changes in fair value of financial assets available for sale | 17 | - | 17 | |
Tax expense relating to items that will be reclassified subsequently to net income (loss) | (5) | - | (5) | |
| (79) | 2 | (77) | ||
| Components of other comprehensive income that will not be reclassified to net income (loss) | ||||
| Actuarial losses from defined benefit plan | (48) | - | (48) | |
| Tax income relating to items that will not be reclassified to net income (loss) | 8 | - | 8 | |
| (40) | - | (40) | ||
| Total comprehensive loss | (291) | (41) | (332) | |
| Comprehensive loss attributable to the non-controlling interests | (59) | - | (59) | |
| Comprehensive loss attributable to the shareholders of the Company | (232) | (41) | (273) |
| Net income | 506 | (32) | 474 | |
| Components of other comprehensive income that will be reclassified subsequently to net income (loss) | ||||
| Currency translation differences | (205) | 9 | b1 | (196) |
| Changes in fair value of derivatives designated as a cash flow hedge | (2) | - | (2) | |
| (207) | 9 | (198) | ||
| Components of other comprehensive income that will not be reclassified to net income (loss) | ||||
| Actuarial gains from defined benefit plan | 63 | - | 63 | |
| Tax expense relating to items that will not be reclassified to net income (loss) | (15) | - | (15) | |
| 48 | - | 48 | ||
| Total comprehensive income | 347 | (23) | 324 | |
| Comprehensive loss attributable to the non-controlling interests | (9) | - | (9) | |
| Comprehensive income attributable to the shareholders of the Company | 356 | (23) | 333 |
B. CAPITALIZATION AND INDEBTEDNESS
Not Applicable.
C. REASONS FOR THE OFFER AND USE OF PROCEEDS
Not Applicable.
D. RISK FACTORS
Summary of Risk Factors
Our business, liquidity, financial condition and results of operations could be materially and adversely affected, and even materially so, if any of the risks described below occur. As a result, the markettrading price of our ordinary sharessecurities could decline, and investors could lose all or part of their investment. This Annual Report also contains forward‑looking statements that involve risks and uncertainties. See “Special Note Regarding Forward‑Looking Statements.” Our actual results could differ materially and adversely from those anticipated, in these forward‑looking statements as a result ofdue to certain factors, including the risks facing the Company as described below and elsewhere in thisthe Annual Report. This Annual Report (including the factors noted incontains forward‑looking statements that involve risks and uncertainties, see “Special Note Regarding Forward‑Looking Statements”)Statements“. Material risks that may affect our business, operating results and financial condition include, but are not necessarily limited to, those relating to:
| • | Our ability to operate and/or expand our production and operating facilitiesworldwide is dependent on our receipt of, and compliance with, permits issued by governmental authorities. A decision by a government authority to deny any of our permit applications may impair the Company’s business and its operations. |
Our miningmineral extraction operations are dependent on concessions, licenses and permits granted to us by the respective governments in the countries wherein they are located.
Securing the future of concessions, as well as materialphosphate mining operations at Rotem Israel depends on obtaining several approvals and permits from the authorities in Israel.
Compliance with and changes in environmental laws and regulations could require us to the conditions of these concessions could materiallymake substantial capital expenditures and incur costs and liabilities and adversely affect our business, financial condition and results of operations.performance.
We extract potash, phosphate, bromine, magnesiumare exposed to risks related to climate change and certainnatural disasters, impacts of climate-related transition risks, including current and future laws and regulations, as well as other minerals in Israel, potash and salt in Spain, potash, salt, Polysulphate™ and certain other minerals in the United Kingdom and phosphate in China, pursuant to concessions and permits in those countries.
Our operations and sales are exposed to high volatility in the supply and demand, mergers of key producers\customers\suppliers,pricing fluctuations in commodity markets, expansion of production capacity and competition from some of the world’s largest chemical and mining companies.
Our competitors include some of the world’s largest chemical and mining companies, some of which are state‑ownedoperations could be adversely affected by price increases or government‑subsidized. The potential production capacity is currently greater than the global demand, which has affected price levels. In light of the fact that some of our products are commodities available from several sources, the primary competitive factorshortages with respect to water, energy and our products is the price. The prices of our products are influenced by the prices prevailing in the market, while recent years saw a decline in the prices of commodities, such as potash and phosphates. Prices have remained low due to higher supply and lower demand deriving from several reasons, including low prices in the agricultural market. Additional competitive factors include product quality, customer service and technical assistance. If we are unable to compete effectively with these companies, our results of operations would almost certainly be significantly and adversely affected.
The accumulation of salt at the bottom of Pond 5, the central evaporation pond in our solar evaporation pondponds system used to extract minerals from the Dead Sea in Israel, requires the water level of the pond to be constantly raised in orderregular harvesting salt to maintain a fixed brine volume and thereby sustain the production capacity of extracted minerals.
We are exposed to risks associated with our international sales and operations,activity, which could adversely affect our sales to customers in various countries as well as our operations and assets in various countries. Some of these factors may also make it less attractive to distribute cash generated by our operations outside Israel to our shareholders, use cash generated by our operations in one country to fund our operations or repayments of our indebtedness in another country and support other corporate purposes or the distribution of dividends.
Changes in our evaluations and estimates, which serve as a basis for analyzing our contingent liabilities and for the recognition and measurement of assets and liabilities, including provisions for waste removal and the reclamation of mines, may materially and adversely affect our business, financial condition and results of operations.
Due to the nature of our operations, we may be exposed to the risk of adverse ecological events, which may result in impacts that exceed the boundaries of our facilities, cause environmental damage or damage to human health/life and lead to the shutdown of our sites or administrative, civil and/or criminal proceedings.
Accidents occurring during our industrial and mining operations, including failure to ensure the safety of our workers and processes, could adversely affect our business.
Geopolitical changes such as war or political sanctions may materially and adversely affect our business, financial condition and results of operations.
Risks Related to Our Business
Our mineral extraction operations are dependent on concessions, licenses and permits granted to us by the respective governments in the countries in which we operate
Our mineral extraction businesses depend on concessions granted to us by the respective governments in the countries in which we operate. Loss of concessions, licenses and/or permits, as well as material changes to the conditions thereof, could materially and adversely affect our business, financial condition and results of operations.
We extract potash, phosphate, bromine, magnesium and certain other minerals in Israel, potash and salt in Spain, Polysulphate®, salt, and certain other minerals in the United Kingdom and phosphate in China, pursuant to concessions and permits in those countries.
Israel
Pursuant to the Israeli Dead Sea Concession Law, 1961 (hereinafter – the Concession Law), as amended in 1986, and the concession deed attached as an addendum to the Concession Law, DSW was granted a concession to utilize the resources of the Dead Sea and to lease the land required for its plants in Sodom for a period ending on March 31, 2030. According to the Concession Law, should the government decide to offer a new concession after the expiration date, to another party, it will first offer the new concession to DSW on terms that are no less attractive than those it may offer to that party. There is no assurance that the Company will continue to hold the concession beyond that period.
ICL Group Limited 6
In accordance with section 24 (a) of the Supplement to the Concession Law, it is stated, among other things, that at the end of the concession period all the tangible assets located in the concession area will be transferred to the government, in exchange for their amortized replacement value – the value of the assets as if they are purchased as new at the end of the concession period, less their technical depreciation based on their maintenance condition and the unique characteristics of the Dead Sea area.
There is no certainty as to the manner of interpretation of the provisions of the Concession Law in this context that would be adopted in a legal proceeding, to the extent such proceeding were to occur. For further information, see Note 18 to our Audited Financial Statements.
We mine phosphate rock from phosphate deposits in the Negev desert in accordance with a mining concession from the State of Israel, which is valid until the end of 2024. In the fourth quarter of 2023, Rotem Israel submitted a bid in the tender for a new mining concession held by the Ministry of Energy. In addition, Rotem Israel has two lease agreements in effect until 2024 and 2041 as well as an additional lease agreement for the Oron plant, which expired in 2017. As of the reporting date, the Company has an agreement in principle, with the Israel Land Authority - Southern Region, regarding the receipt of a lease agreement for Oron plant until the end of 2025.
There is no certainty that these concessions and leases will be extended and/or renewed under the same terms or at all. Failure to renew said concessions and leases or different terms could materially and adversely affect our business, financial condition and results of operations.
Our existing phosphate mines in the Negev desert hold limited reserves of phosphate rock designated for phosphoric acid production. The Company is working to promote a plan for mining phosphates in Barir field which is located in the southern part of the South Zohar deposit in the Negev Desert in Israel. The Company is working to promote suitable alternatives for future phosphate operations at Rotem Israel and to obtain required permits and approvals, including by conducting pilots to adapt various potential types of phosphate rock for the Company’s products as part of an effort to utilize and increase existing phosphate reserves.
There is no certainty regarding the timelines for the submission of the plan for the Barir field site, its approval, or further developments in this respect, nor is there certainty regarding future phosphate rock resources, our pilots’ success and/or by what date they will be achieved. Failure to obtain such approval or a significant delay in receiving it, or in finding alternative sources of phosphates in Israel, will have a significant negative impact on our future mining reserves and business. As a result, our business, financial condition and results of operations will be adversely affected, even materially. For further information, see “Item 4 ‑ Information on the Company— D. Property, Plant and Equipment”, and Note 18 to our Audited Financial Statements.
Spain
ICL Iberia was granted mining rights based on legislation of Spain’s Government from 1973 and the regulations accompanying this legislation. Pursuant to the special mining regulations, ICL Iberia received individual licenses for each of the 126 different sites that are relevant to current and future mining activities. Some of the licenses are valid until 2037 and the remainder are effective until 2067. Maintaining mining activity in Spain also requires municipal and environmental licenses. If such licenses are not renewed once expired, this would likely have an impact, possibly in a substantial manner, on the mining activity in Spain and the Company’s financial results. For further information, see “Item 4 - Information on the Company— D. Property, Plant and Equipment”, and Note 18 to our Audited Financial Statements.
ICL Group Limited 7
United Kingdom
ICL Boulby, ICL's subsidiary in the UK, holds onshore and offshore mineral leases and licenses, allowing for the extraction of diverse minerals, in addition to numerous easements and rights of way from private landowners. The offshore mineral field is leased from The Crown Estate on a production royalty basis and includes provisions to explore and exploit all targeted and known polyhalite and salt mineral resources of interest to ICL Boulby.
ICL Boulby has actively engaged in negotiations with the private property owners and has successfully secured the recent renewals of most of the existing lease agreements as well as purchased the minerals of one lease area on a freehold basis. The renewal of part of the remaining leases was referred to the High Court of Justice in London for a decision regarding the calculation mechanism. The Company estimates that the proceedings will be concluded by the end of 2024. Additional leases, which are still being negotiated, will continue to operate under the terms of the previous leases.
Historically, the renewal of leases has not been problematic. ICL Boulby is confident in the renewal of all land and mineral leases, as required and expects to have or will obtain all government approvals and permits necessary for exploiting all targeted mineral resources.
Nevertheless, in the event such rights are not obtained, the mining activity in the UK may be substantially affected as well as the Company’s financial results. For further information, see “Item 4 - Information on the Company— D. Property, Plant and Equipment”, and Note 18 to our Audited Financial Statements.
China
YPH, ICL's subsidiary in China, which is equally owned with Yunnan Phosphate Chemicals Group Corporation Ltd. ("YYTH"), holds a phosphate mining license that was issued in 2015 by the Division of Land and Resources of the Yunnan district in China for the Haikou Mine (hereinafter – Haikou) which the Company operates and which is valid until January 2043. In addition, the Company held an unutilized mining license for the Baitacun mining site which expired in April 2023. In 2022, the Company completed a risk survey to assess the feasibility and profitability of this mining site and is currently working to renew its license for an additional ten years. If Haikou's license is not renewed once expired, this would likely to have an impact, possibly in a substantial manner, on our mining activity in China and the Company’s financial results. For further information, see “Item 4 - Information on the Company— D. Property, Plant and Equipment”, and Note 18 to our Audited Financial Statements.
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Our ability to operate and/or expand our production and operating facilitiesworldwide is dependent on our receipt of, and compliance with, permits issued by governmental authorities. A decision by a government authority to deny any of our permit applications may impair the Company’s business and its operations
Existing permits are subject to challenges with respect to their validity, revocation, modification and non‑renewal, including as a result of environmental events or other unforeseeable occurrences. Any challenge that materializes could lead to significant costs and materially and adversely affect our business, financial condition and results of operations. In addition, a failure to comply with the terms of our permits could result in payment of substantial fines and subject the Company and its managers to criminal sanctions.
Furthermore, our production processes generate byproducts, some of which are saleable while others are to be reused or disposed of as waste. Storage, transportation, reuse and waste disposal are generally regulated by governmental authorities in the jurisdictions in which we operate. Permits issued by governmental authorities are contingent on our compliance with relevant regulations. In 2021, a new Urban Building Plan was approved, the main objectives of which are to regulate areas for phosphogypsum storage reservoirs. Due to the ambiguity of the guidelines regarding the calculation of building permit fees, in August 2023, the Company signed a settlement agreement with the Tamar Regional Council. If the required new permits will not be obtained and/or the validity, revocation, modification or non-renewal of our existing permits occurs as a result of our noncompliance with regulations relating to storage, transportation, reuse and waste disposal, significant investments may be required and/or production may be interrupted or even ceased, which can materially and adversely affect our business, financial condition and results of operations.
Our operations and sales are exposed to high volatility in supply and demand, pricing fluctuations in commodity markets, expansion of production capacity and competition from some of the world’s largest chemical and mining companies, as well as mergers of key producers/customers/suppliers
In addition to seasonal and cyclical variations, the Company is exposed to volatility driven by various factors, such as weather conditions, the entry into the market of new manufacturers and products, mergers of key players (producers/suppliers/customers) and expansion of existing manufacturers’ production capacity. Our competitors include some of the world’s largest chemical and mining companies, some of which are state‑owned or government‑subsidized.
We continuously monitor our competitive environment and will continue to seek ways to execute our strategy. If we are unable to effectively adjust to continuously changing competitive conditions our business, financial condition and results of operations could be materially and adversely affected.For further information, see “Item 4 – Information on the Company — B. Business Overview”.
Overestimation of mineral and resource reserves could result in lower-than-expected sales and/or higher than expected costs and may have a material adverse effect on our business, financial condition and results of operations
We base our estimates of mineral resources and reserves on engineering, economic and geological data that is compiled and analyzed by our engineers and geologists. However, resource and reserves estimates are by nature imprecise and rely to some extent on statistical inferences drawn from available drilling data, which may prove unreliable/inaccurate. There are numerous inherent uncertainties in estimating quantities and qualities of mineral deposits, resources and reserves, as well the quality of the ore, and the costs of mining recoverable reserves and the economic feasibility thereof, including many factors beyond our control. Estimates of economically feasible commercial reserves necessarily rely on several factors and assumptions, all of which may vary considerably from the actual results, such as:
Geological and mining conditions and/or effects of prior mining that may not be fully identified/assessed within the available data or that may differ from those based on our experience;
ICL Group Limited 9
Assumptions concerning future prices of products, operating costs, updates to the statistical model and geological parameters according to past experience and developing practices in this field, mining technology improvements, development costs and reclamation costs; and
Assumptions concerning future effects of regulation, including the issuance of required permits and taxes imposed by governmental agencies.
If these factors and assumptions change, we may need to revise our mineral resource and reserves estimates.
Any revisions to our previous resource or reserve estimates or inaccuracies in our estimates related to our existing mineral resources and resource reserves could result in lower-than-expected sales and/or higher than expected costs and may have a material adverse effect on our business, financial condition and results of operations.
For further information, see “Item 4- Information on the Company— D. Property, Plant and Equipment”.
Compliance with and changes in environmental laws and regulations could require us to make substantial capital expenditures and incur costs and liabilities and adversely affect our performance
Our operations are subject to extensive environmental laws and regulations relating to the protection of the environment, including those governing the emission or discharge of pollutants into the environment, product use and specifications and the generation, treatment, storage, transportation, disposal and remediation of solid and hazardous wastes. Violations of applicable environmental laws and regulations, or of the conditions of permits issued thereunder, can result in substantial penalties, injunctive orders, civil and criminal sanctions, operating restrictions, permit revocations and/or facility shutdowns, which may have a material adverse effect on our ability to operate our facilities and accordingly our financial performance. Certain environmental laws make us potentially liable on a strict, joint and several basis for the investigation and remediation of contamination at, or originating from, facilities that are currently or formerly owned or operated by us and third-party sites to which we send or have sent materials for disposal or materials for recycling, along with related natural resources damages.
As a leading global specialty minerals company, we are significantly affected by the legal provisions and licensing regime in the areas of environmental protection and safety. It should be noted that the Company may be exposed to criminal proceedings, fines and significant impairment of the operation of our facilities as a result of failing to meet the requirements of our emissions permits including the provisions of the Israeli Clean Air Law, and particularly, regarding the scope of current and future requirements as prescribed by the Israeli Ministry of Environmental Protection respecting the implementation of the this law’s provisions at the Company’s plants in Rotem Israel, as well as compliance with the timeframes for implementation of such requirements. In January 2024, a new emission permit was issued to Rotem Israel under the Israeli Clean Air Act (hereinafter - the Law) valid until January 2031. The Company is in active discussions with the Israeli Ministry of Environmental Protection (MoEP) to assure adherence to all stipulations outlined in the permit, including the conditions specified in an administrative order under Section 45 of the Law, and to achieve satisfactory resolutions to notable timeline execution challenges for a limited number of projects. In addition, examinations and investigations of our facilities conducted by enforcement authorities may result in administrative and legal proceedings.
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Legislative and regulatory changes around the world may prohibit or restrict the use of our products, due to environmental protection, or health and safety considerations. From time to time, various governmental authorities have proposed or implemented bans or other limitations on certain chemical products. Standards adopted in the future may affect us and change our methods of operation. Furthermore, some of our licenses, including business licenses and mining licenses must be renewed from time to time. Renewal of such licenses is not certain and may be made contingent on additional conditions and significant costs. Difficulties in obtaining such licenses could have an adverse effect on our operations, business and results.
In addition, new environmental laws and regulations, new interpretations of existing laws and regulations, or increased governmental enforcement of laws and regulations could require us to make additional unforeseen expenditures.
Due to the nature of our operations, we may be exposed to the risk of adverse ecological events, which may result in impact that exceeds the boundaries of our facilities, cause environmental damage or damage to human health/life and lead to the shutdown of our sites or administrative, civil and/or criminal proceedings
Due to the nature of our operations, we may be exposed to the risk of adverse ecological events, including incidents like chemical spills, pollution, leaks, and other types of events that result in the release of hazardous or toxic substances into the environment. Depending on the toxicity and volume of the substances involved, the impact of such events can extend beyond site boundaries, affecting nearby ecosystems, water sources, communities and wildlife.
The long-term consequences of environmental damage can be significant and may require extensive remediation efforts and/or compensation. Such events could affect not only the employees working in the facility but also people living in the surrounding areas and consequently the reputation of the company. In the event of a significant ecological incident, regulatory authorities may mandate the temporary or permanent shutdown of the manufacturing site until safety concerns are addressed. This can result in significant impairment of the operation of our facilities, financial losses, disruption of operations, and potential long-term reputational damage.
Adverse ecological events with impacts beyond factory boundaries may also trigger administrative and legal actions. Regulatory bodies may investigate the incident, and legal proceedings, both civil and criminal, may follow. Fines, penalties, and lawsuits can result from non-compliance with environmental and safety regulations or adverse impacts to human health or the environment without regard to fault.
We may also be found liable for claims related to reclamation where mining operations and other activities were conducted, even after such activities have ceased.
For information respecting legal proceedings and actions, see Note 18 to our Audited Financial Statements and “Item 8 - Financial Information— A. Consolidated Statements and Other Financial Information— Legal Proceedings”.
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We are exposed to risks related to climate change and natural disasters, impacts of climate-related transition risks, including current and future laws and regulations, as well as other factors resulting from climate change, which could adversely impact our business, financial condition, results of operations or liquidity
Climate change may cause more frequent and severe natural disasters and weather conditions such as extreme temperatures, change in precipitation, water levels, wildfires and storms. Impacts of climate-related transition risks include, among other things, legal and regulatory changes and reputational risks expressed by our stakeholders’ perception of our role, accountability and actions taken in relation to a lower-carbon economy and the like.
Physical impact related to climate change may also have a significant effect on industries and the economy. Such impact may include extreme heat, extended drought durations altering water availability and quality, changes to water level and temperature, increases in the frequencies and intensities of storms and extreme convective events, which could also result in damage to facilities or equipment. The impact may also encompass changes in the availability of natural resources, leading to the disruption of supply chains. Such physical risks have the potential to financially disrupt operations through increased costs and business interruptions.
Natural disasters such as flooding and earthquakes, as well as extreme weather conditions and receding water levels may disrupt our operations, upstream raw material supply and downstream distribution of our products. In Israel, some of our plants are located in the Jordan Rift Valley, or Syro-African Depression, a seismically active area. Due to the hydrological deficit, the water level of the Northern Basin of the Dead Sea is receding at the rate of over one meter per year, which may require us to reduce our usage of minerals from the Dead Sea. Furthermore, sinkholes and underground cavities have been discovered in that area, and its appearance is increasing over the years. Most of the sinkholes develop in the Northern Basin of the Sea, where there is little activity by ICL Dead Sea. However, in recent years there has been a steady development of sinkholes around the feeding channel, through which water is pumped from the Northern Basin to the Southern Basin. DSW takes actions to monitor the development of these sinkholes and to fill them when they appear. The development of sinkholes in areas where we operate, together with a failure to detect and treat those sinkholes can cause significant damage and could materially and adversely affect our business, financial condition and results of operations.
In the Sodom area, where many of the Company’s plants in Israel are located, there are occasional flash floods in the streambeds, which have led to the initiation of a major flood protection response plan by ICL. While we have insurance coverage for these types of damage, subject to payment of deductibles, we do not have full property insurance with respect to all our property/assets, and it may not be sufficient to cover all related damage.
The erosion of the Arava stream which flows along the international border between Israel and Jordan and into the Dead Sea, could endanger the stability of the eastern dikes in the future. Although we designed a project to address these risks, we cannot guarantee that we will receive the permits to conduct the project or that the project will succeed.
Another example that could indicate of a chronic change is the low water levels in the Rhine River in Germany, a key transport route, which experienced water levels too low for transport barges to operate. Such events may increase our inland transportation costs.
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Impacts of climate-related transition risks include, among other things, policy constraints on emissions, imposition of carbon pricing mechanisms, water restrictions, land use restrictions or incentives, changing consumer behavior and preferences, and market demand and supply shifts.
Over the past several years, climate change and GHG emissions have been of increasing concern worldwide. Laws and regulations that govern climate change and GHG emissions already have impact on ICL Group’s operations and may present transition risks for both the short and long term.
Carbon taxes and cap-and-trade-emissions schemes are increasingly viewed in global jurisdictions as a way of pricing carbon – a key policy driver to reduce GHG emissions. Currently, one of ICL Europe's sites, ICL Iberia, is covered by the EU-ETS Emissions Trading System, and in the UK, ICL Boulby is subject to the UK Emissions Trading Scheme. In Israel, a new carbon tax on fossil fuels, including natural gas, has been proposed in the “Knesset“- the Israeli house of representatives, to be implemented gradually over the course of the current decade. Other carbon mechanisms could come into play in the future.
Additionally, under the European Green Deal, the EU adopted a Carbon Border Adjustment Mechanism (CBAM) Regulation in 2023, which was created to stop carbon leakage from the EU (i.e., the risk that EU's carbon emissions reduction regulations will be offset by increases in emissions in jurisdictions with less stringent regulations) which will apply to some of our operations. The EU CBAM charge will phase in over a period of nine years, beginning in 2026. Regulations relating to GHG emissions are at various stages of consideration by the US federal government as well as in some US states.
Consequently, it is expected that in the short to medium term, ICL will need to purchase carbon allowances through specific programs (such as the EU and UK ETS) and/or incur additional capital costs for energy and emission reduction measures. Similarly, carbon taxes or restrictions/taxes on fossil fuel electricity production could increase our energy costs as well as the costs of supplied materials and services across the ICL value chain.
We are subject to laws and regulations that will require us to disclose information related to climate risks. As of 2026 ICL’s large EU subsidiaries are expected to report under the EU's Corporate Sustainability Reporting Directive over financial year 2025. The US Securities and Exchange Commission issued a rule requiring disclosure of climate-related risk on March 6, 2024, and we expect other jurisdictions to adopt regulatory disclosure requirements relating to climate risks and opportunities disclosures, GHG emissions and other ESG metrics in the foreseeable future.
The potential impact of climate change and associated laws and regulations on the Company's operations and business, and those of our customers and suppliers, is uncertain. The cost of adjustment to and compliance with legislative and regulatory changes regarding climate change and GHG emissions, and adjustments to the physical impacts of climate change, could materially and adversely affect our business, financial condition and results of operations and liquidity.
For further information, see “Item 4 – Information on the Company — B. Business Overview” and Note 18 to our Audited Financial Statements.
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We may be adversely affected if we cannot meet the goals and commitments that we establish in relation to climate change and other social and environmental sustainability matters
There has been an increased focus, including from investors, the general public governmental and nongovernmental authorities, regarding environmental, social and governance (ESG) matters, including with respect to climate change, GHG emissions, packaging and waste, sustainable supply chain practices, deforestation, and land, energy and water use. This increased awareness with respect to ESG matters, including climate change, may result in more prescriptive reporting requirements with respect to ESG metrics, an increased expectation that such metrics will be voluntarily disclosed by companies such as ours, and increased pressure to make commitments, set targets, or establish goals, and take action to meet them. As a result of this increased focus and our commitment to ESG matters, we have voluntarily provided disclosure and established targets and goals with respect to various ESG matters, including climate change. For example, we have made public commitments regarding our intended reduction of carbon emissions, including a reduction of our Scope 1 and 2 GHG emissions by 30% by 2030 (as compared to 2018) and our goal to be carbon neutral by 2050 across our Scope 1 and 2 GHG emissions. Our ability to achieve these or any other ESG and climate-change related goals or targets is subject to numerous factors and conditions, many of which are outside our control. Examples of such factors include evolving regulatory requirements affecting sustainability standards or disclosures or imposing different requirements, the pace of changes in technology, the availability of requisite financing, the availability of suppliers that can meet our sustainability and other standards and the emissions performance of others in our value chain. Furthermore, standards for tracking and reporting such matters continue to evolve. Our selection of voluntary disclosure frameworks and standards, and the interpretation or application of those frameworks and standards, may change from time to time or differ from those of others. Methodologies for reporting this data may be updated and previously reported data may be adjusted to reflect improvement in the availability and quality of third-party data, changing assumptions, changes in the nature and scope of our operations, and other changes in circumstances. Our processes and controls for reporting sustainability and other matters across our operations and supply chain are evolving along with multiple disparate standards for identifying, measuring, and reporting sustainability metrics, including sustainability-related disclosures that may be required by the SEC and EU, reporting frameworks, and other regulators policy makers locally and globally, and such standards may change over time, which could result in significant revisions to our current goals, reported progress in achieving such goals, or ability to achieve such goals in the future. If we fail to achieve or are perceived to have failed or been delayed in achieving, or improperly report on our progress toward achieving these goals and commitments, or are otherwise alleged to have made climate-related statements that are incorrect, without support or that constitute so called “greenwashing,” it could negatively affect the public’s preference for our products or investor confidence in our stock, as well as expose us to government enforcement actions and private litigation.
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The accumulation of salt at the bottom of Pond 5, the central evaporation pond in our solar evaporation ponds system used to extract minerals from the Dead Sea, requires regular harvesting of the salt to maintain a fixed brine volume and thereby sustain the production capacity of extracted minerals as well as prevent potential damage to the foundations and structures of hotels and other buildings situated close to the edge of the Pond
The production process of the raw material requires that a fixed brine volume is preserved in Pond 5. Failure to maintain a constant volume of brine in Pond 5 could result in a reduction of production capacity.
In addition, rising of the water level of Pond 5 above a certain point may cause structural damage to the foundations of hotel buildings situated close to the water’s edge, to the settlement of Neve Zohar and to other infrastructure located along the western shoreline of the Pond.
The preservation of the water level in Pond 5 at its maximum height (15.1 meters), which was reached at the end of 2021, was conducted through a joint project of the Dead Sea Preservation Government Company Ltd. and DSW (which financed 39.5% of the project's cost) for construction of coastline defenses. The project included the raising of the dike along the western beachfront of Pond 5 across from the hotels together with a system for lowering subterranean water. The construction work with respect to the hotels' coastline was completed, and the elevation work in the intermediate area between two hotel complexes conducted by the Dead Sea Preservation Government Company Ltd. is nearing completion.
Commencing 2022 onwards, the brines' volume in Pond 5 is preserved by the salt Harvesting project ("the Permanent Solution"), the plan of which was approved by the National Infrastructures Committee and the Israeli Government and, and that includes the construction of the P‑9 pumping station. As of the reporting date, the water level in pond 5 does not exceed its maximum height (15.1).
The "Permanent Solution" was established in the agreement with the Government of Israel in 2012, aiming to provide a defense at least until the end of the current concession period in 2030.
There is no guarantee that the said projects for maintaining the Pond’s water level will be at the cost we currently estimate or will prevent damage to the surrounding infrastructure or to our operations in the Pond. Higher cost of the harvesting process or failure to provide solutions and/or any proof of damage caused could materially and adversely affect our business, financial condition and results of operations.
For further information see “Item 4 – Information on the Company — D. Property, Plant and Equipment” and Note 18 to our Audited Financial Statements.
Any disruption in the transportation systems we use to ship our products and receive raw materials could have a material adverse effect on our business, financial condition and results of operations
Part of our sales turnover is comprised of bulk products characterized by large quantities. Most of this production quantity is shipped through dedicated facilities from two seaports in Israel, one seaport in Spain and another seaport in the UK. Any significant disruption to seaport facilities and/or the array of transportation from the seaports, including a port workers’ strike, regulatory restrictions and changes in the rights of use of seaport facilities, including potential disruptions from recent geopolitical and security risks, may delay or prevent exports of our products to our customers, which could materially and adversely affect our business, financial condition and results of operations. In addition, any significant disruption, shortage, or unavailability in the array of transportation to the seaports and between various sites, primarily through trains and trucks, carrying our products and the raw materials we use in our business could result in customer dissatisfaction, loss of production or sales and higher transportation, higher insurance premiums, loss of insurance coverage, or equipment costs.
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We rely heavily upon truck, rail, tug, barge and ocean freight transportation to obtain the raw materials we need, to distribute raw materials between our mines and facilities and to deliver our products to our customers. In addition, the cost of transportation is an important part of the final sale price of our products. Finding affordable and dependable transportation is important in obtaining our raw materials and to supply our customers. Higher costs for these transportation services or an interruption or slowdown due to factors including high demand, high fuel and energy prices, labor disputes, layoffs or other factors might materially and adversely affect the Company’s business, its financial condition and results of operations.
In addition, the Company transports hazardous materials using specialized transport facilities, such as isotanks for the conveyance of bromine. A malfunction in the transportation of hazardous materials in one of our specialized transport facilities may have an environmental impact and/or cause harm to the welfare of local residents, and, as a result, expose the Company to lawsuits and/or administrative proceedings or fines. This could also lead to a shutdown of such materials’ transportation systems for a certain period until the cause of such malfunction is discovered and/or for purposes of preventative maintenance and improvement of the transportation array. During times of war, the schedule for bromine transportation and direct loading is conducted according to the authorities' guidelines. As a result, such measures may have a material adverse effect on the Company’s operations, financial condition and results of operations.
We are exposed to risks associated with our international sales and operations which could adversely affect our sales to customers as well as our operations and assets in various countries. Some of these factors may also make it less attractive to distribute cash generated by our operations outside Israel to our shareholders, use cash generated by our operations in one country to fund our operations or repayments of our indebtedness in another country and support other corporate purposes or the distribution of dividends
As a multinational company, we sell in many countries where we do not produce. A considerable portion of our production is designated for export. As a result, we are subject to numerous risks and uncertainties relating to international sales and operations, including:
The occurrence of any of the above in the countries in which we operate or elsewhere could jeopardize or limit our ability to transact business there and could materially adversely affect our revenue and operating results and the value of our assets located outside Israel.assets.
War, and/or governmental instability around the world are likely to negatively impact us. This impact may manifest itself in production delays, distribution delays, business and economic uncertainty and volatility of global markets, loss of property, injury to employees, political sanctions and difficulties in obtaining insurance coverage or increased insurance premiums.
The Ukraine-Russia Conflict impacted global agriculture in 2022 and resulted in elevated grain prices, which – in turn – drove prices higher for crops and livestock. The global grain stock-to-use ratio ended 2022 at its lowest in more than a decade.
In October 2023, the Israeli government declared a state of war in response to an attack on civilians at its southern border. Subsequently, additional attacks were launched towards northern Israel. The new security situation has led to several challenges, including some disruptions in supply chains, a shortage of personnel due to mobilization for reserve duty, and fluctuations in foreign currency exchange rates relative to the Israeli shekel. For further information, see risk factor “Due to our location in Israel and/or being an Israeli company, which also operates outside of Israel, our business and operations may be exposed to war or acts of terror”.
Regional tensions involving Houthis attacks on commercial ships have recently intensified, affecting shipping operation in the Red Sea. This could lead to delays in shipments as well as increased shipping costs.
The extent of the above risks might make it economically unattractive to utilize cash generated byimpact of a war on our operations in one country to fund our operations or repayments of liabilities in another country, support other corporate purposesoperational and needs or distribute dividends.financial performance will depend on future developments, including, but not limited to:
The duration, severity and extent of a war, along with the necessary measures undertaken by government authorities or other organizations to manage and mitigate its effects.
The possibility of temporary closures of our facilities or the facilities of our suppliers, customers, their contract manufacturers, and the possibility of certain industries shutting down.
The ability to purchase raw materials in times of shortages resulting from supply chain disruptions and production shutdowns.
The ability of our suppliers, contractors and third-party providers to meet their obligations to us at previously anticipated costs and timelines without significant disruption.
Our ability to continue to meet the manufacturing and supply arrangements with our customers at previously anticipated costs and timelines without significant disruption.
The duration and severity of the sustained global or local recession, and the uncertainty as to when economy will fully recover.
Significant disruption of global financial markets and credit markets, which may reduce our ability to access capital or our customers’ ability to pay us for past or future purchases, which could negatively affect our liquidity.
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The ultimate impact of a war is highly uncertain and subject to change. To the extent that a war may negatively impact our business, results of operations, liquidity or financial condition, it may also have the effect of increasing many of the other risks described in this “Risk Factors” section.
The spread of a pandemic may materially and adversely affect our business, financial condition and results of operations
Spread of a pandemic is likely to negatively impact us. This impact may manifest itself in production delays, disruptions in supply chains, employees’ health as well as business and economic uncertainty and volatility to global markets.
In March 2020, the World Health Organization declared Covid-19 a pandemic which spread across the globe introducing significant business and economic uncertainty and volatility to global markets.
The spread of the pandemic has led us to modify our business practices, health and safety measures and procedures to protect our employees.
A pandemic introduces various challenges, including potential disruptions to production and uncertainties regarding global recession and impacts on financial markets. Concerns encompass facility closures, raw material shortages, and decreased demand for our products. The ability of suppliers and contractors to meet obligations and maintain timelines adds to the complexities.
There is no certainty that such measures will be sufficient to mitigate the risks posed by any pandemic. Furthermore, our ability to perform certain functions may be affected if we are required to take additional steps.
The ultimate impact of a health epidemic is highly uncertain and subject to change. To the extent that a pandemic may negatively impact our business, results of operations, liquidity or financial condition, it may also have the effect of increasing many of the other risks described in this “Risk Factors” section.
Our operations could be adversely affected by price increases or shortages with respect to water, energy and our principal raw materials as well as by increases in transportation costs.
We use water, energy and various raw materials as inputs and we could be affected by higher costs or shortages inof these materials, as well as by changes in transportation prices.prices. A significant increase in price or shortage of raw materials, inter alia: ammonia, sulphur, WPA and 4D (which we purchase from third parties) could adversely and materially affect our results of operations, financial position, and our business.
Our plants consume large amounts of energy. Moreover, energy is a significant component of the shipping costs of a considerable share of our products. Significant price increases for energy, or energy shortages, would affect shipping costs, production costs and/or quantities.
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The supply of electricity to our production processes and facilities at our magnesium plant require a continuous supply of electricity. While our magnesium plant has two power supply sources —in Israel is provided by our power station in Sodom and the national power grid. Our operations in Israel are dependent on these two sources, so significant malfunctions at the power station and/or interruption of power supply from the national grid in Israel — there ismay lead to additional financial liabilities and potential shutdowns at our production facilities, which could negatively affect ICL's ability to supply its products to both external customers and other ICL's sites using them as raw materials and reduce revenue from decreased production capacity. In addition, our magnesium plant requires a riskcontinuous supply of damage toelectricity, so any interruption in the power supply from these two sources concurrently. Prolongedto the magnesium plant may cause significant damage to regular power supply may damageour magnesium production process. In prior years, due to events not in the plants andcontrol of the environment.
While our plants are prepared for theto use of alternative energy sources (fuel oil and/or diesel fuel), failure to obtain NG in a timely manner or energy shortages stemming from high demand in local markets, export preference and the like, can result in an increase in our energy costs and/or energy shortages,in production losses, and could materiallyadversely and adverselymaterially affect our business, financial condition and results of operations.
We can provide no assurance that we will be able to passimpose on to our customers increased costs relatingwith respect to water, energy or otherand principal raw materials, such as sulphur, that are supplied by third parties.materials. Our inability to pass onimpose such cost increases could adversely affect our margins. In addition, shortages inFor further information, see “Item 4 ‑ Information on the Company— B. Business Overview” and Note 5 to our principal raw materials may disrupt our production capacity and adversely affect our business performance.Audited Financial Statements.
Completion of certain of our major projects may be dependent on third‑party contractors and/or governmental obligations. Furthermore, termination of engagements with contractors might entail additional costs.costs
As part of our ongoing operation, the Company is required to execute key projects, which are of great importance to the Company’s continued operation and ability to significantly improve its competitive position in certain markets. Thus, for example, in DSW, a 24-kilometer conveyor system for transferring salt back to the Northern Basin, is currently undergoing detailed engineering design, and is planned to be commissioned in 2027. In addition, the Company is working to include a second dredger with commissioning planned in 2026. We are also advancing significant investments in projects to increase our production capacity for our main product lines and in environmental projects. The completion of certain of our majorkey projects maycould also be dependent on third‑partythird-party contractors. For example, in 2012,Situations wherein such contractors encounter financial or operational difficulties, or have significant disagreements with the Company, entered into agreements regardingcould cause a significant delay in the planned timetables for completion of a project to construct a new cogeneration power station (EPC) in Sodom, Israel (hereinafter – the Station). The Station will have a production capacity of about 330 tons of steam per hourand/or material deviations from its budget and about 230 megawatt hours, which will supply electricitymay even jeopardize its completion altogether. This could adversely and steam requirements for the production plants at the Sodom site and for third party customers. The Company intends to operate the Station concurrently with the existing power station, which will be operated on a partial basis in a "hot back‑up" format, for production of electricity and steam. The total electricity production in the short term will be about 245 MWH.
The inflow of significant amountsquantities of water into the Dead Sea could adversely affect production at our plants.plants
The inflow of significant amountsquantities of water into the Dead Sea could adversely affect production at our plants.plants and may alter the composition of the Dead Sea water, in a manner that lowers the concentration of the solution pumped into the evaporation ponds, which may adversely affect production at ICL plants, our results of operations financial position, and our business. This risk may materialize, among other things, as a result of the construction of a canal connecting the Mediterranean Sea with the Dead Sea, the inflow of water from the Sea of Galilee (Kineret)(Kinneret) to the Dead Sea via the Jordan River, or the construction of a canal from the Red Sea to the Dead Sea.Sea.
ICL plants. An examination conducted by the World Bank, which is reviewing the construction of the canal connecting the Red Sea and the Dead Sea indicated that, a discharge of up to 400 million cubic meters into the Dead Sea will have no adverse environmental effects, as no layering effect will be caused, and the water will evaporate and/or mix with the water of the Dead Sea. For this reason it appears that inflow on such a scale will also create no significant damage to our plants, although the actual impacts may be different. However, if the Red Sea-Dead Sea Canal results in a lower concentration of sodium chloride in the water in the Dead Sea, it could adversely and materially affect production at our plants, our results of operations financial position, and our business.
We are exposed to the risk of labor disputes, slowdowns and strikes.strikes
From time to time, we experience labor disputes, slowdowns and strikes. A significant partportion of our employees are subject to collective labor agreements, mainly in Israel, China, Germany, United Kingdom, Spain, the Netherlands and the Netherlands.Brazil. Prolonged slowdowns or strikes at any of our plants couldmay disrupt production and cause theresult in non-delivery of products that had already been ordered, andordered. Also, ramp-up time is needed in order to return to full production capacity at the facilities. Furthermore, dueDue to the mutual dependencyinterdependence between ICL plants, slowdowns or strikes inat any ICL plantof ICL's plants may affect the production capacity and/or production costs at other ICL plants. During labor disputes, the workers union may impose certain sanctions which may include blocking or delaying the transfer of goods through the factory gates; such disputes may escalate into a strike. Labor disputes, slowdowns or strikes, as well as the renewal of collective labor agreements, may lead to significant costs and loss of profits, which could adversely, and even materially, affect our operating results and our ability to fully implement future operational changes for efficiency purposes.In the course of labor disputes, the workers union may impose certain sanctions which may include blocking or delaying the transfer of goods through the factory gates; such disputes may escalate into a strike.
Some of our employees have pension and health insurance arrangements that are our responsibility.responsibility
Some of our employees in Israel and overseas have pension and health insurance arrangements that are our responsibility. Against some of these liabilities, we have monetary reserves that are invested in financial assets. See Note 19 to our Audited Financial Statements for information about our employee benefits liabilities and composition of plan assets. Changes in life expectancy, changes in the capital marketmarkets or changes in other parameters by which undertakings to employees and retirees are calculated, as well as statutory amendments, could increase our net liabilityliabilities for these arrangements. For information about our employee benefits liabilities and composition of plan assets, see Note 16 to our Audited Financial Statements.
The discontinuation, cancellation or expiration of government incentive programs or tax benefits; entry into force of new or amended legislation or regulations with respect to additional and/or increased fiscal liabilities to be imposed on us; or imposition of new taxes or changes to existing tax rates, could all materially and adversely affect our business, results.financial condition and results of operations
Any of the following may have a material adverse effect on our operating expenses, effective tax rate and overall business results:
| The applicable tax rates may increase; |
| We may no longer be able to meet the requirements for continuing to qualify for some incentive programs; |
Our tax expenses and the resulting effective tax rate reflected in our consolidated financial statements may increase over time as a result of changes in corporate income tax rates and/or other changes in tax laws in the various countries in which we operate. We are subject to taxes in many jurisdictions, including jurisdictions in which we have a limited presence, and discretion is required in the determination of the provisions for our tax liability. Considering recent trends in international tax law and OECD recommendations, significant changes to international tax laws and practices may be adopted by various jurisdictions. Such changes could result in us being subject to tax in jurisdictions in which we currently are not subject to tax (including jurisdictions in which we have limited or no operations other than performing sales activities). Similarly, we are subject to examination by the tax authorities in many different jurisdictions. As part of such tax examinations, the relevant tax authorities may disagree with the taxable income reported and may also dispute our interpretation of the applicable tax legislation relating, among other things, to natural resource taxes and inter-company agreements.
CFC taxation
The Company operates in many countries around the world. Under certain conditions, tax laws in certain countries provide that income from passive activities (and in certain cases, active activities) from Controlled Foreign Companies ("CFC") shall be considered taxable income even if not distributed. The conditions include, among other, the ratio between active and passive income and tax rates applied in foreign countries. Although the Company is acting in accordance with the relevant tax legislation, there is a risk that tax authorities will require additional tax payments, to the extent that the Company's position regarding meeting the conditions of Controlled Foreign Companies (CFC) will not be accepted.
BEPS and Pillar 2 proposed arrangements
The Base Erosion and Profit Shifting (“BEPS”) project and other initiatives like Pillars 1 and 2 undertaken by the Organization for Economic Cooperation and Development (“OECD”) may have adverse consequences to our tax liabilities. These initiatives contemplate changes to numerous international tax principles, national tax incentives and enforce other arrangements like minimum effective tax liability of 15% under Pillar2. These changes, when adopted by individual countries, could adversely affect our provision for income taxes. Countries have been translating the BEPS recommendations into specific national tax laws and are expected to do so further, mainly with respect to Pillar 1 and 2. It remains difficult to predict the magnitude of the effect of such new rules on our financial results.
A Pilar 2 legislation which will be applicable to the Company commencing 2024, and, with respect to certain components of the plan, 2025, was enacted in December 2023 in The Netherlands. The Company estimates that this Dutch pillar 2 legislation will not have a material impact on its financial statements.
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Changes in our evaluations and estimates, which serve as a basis for analyzing our contingent liabilities and for the recognition and manner of measurement of assets and liabilities, including provisions for thewaste removal of waste and the reclamation of mines, may materially and adversely affect our business, financial condition and results and financial situation.of operations
As part of the preparation and composition of our financial statements, we are required to exercise discretion, make use of evaluations and estimates and make assumptions that affect, among other things, the amounts of assets and liabilities, income and expenses. When formulating such estimates, the Company iswe are required to make assumptions concerning circumstances and events that involve uncertainty, even great uncertainty.uncertainty, such as, legal claims pending against ICL. We exercise our discretion based on our past experience, various facts, external factors and reasonable assumptions, according to the circumstances relevant to each estimate. It should be noted that actual results may differ, and even materially so, from such estimatesestimates. Therefore, this may materially and therefore may adversely affect our business, financial results.condition and results of operations. For example, in 2016, following discussions with the authorities relating the plan for treating the salt pile on the Sallent site, it was found that a number of changes in the plan are required with respectfurther information, see Note 2 to the water pumping process, which constitutes part of the removal plan. As a result, based on the estimate of the projected costs, the Company recognized a provision in its financial statements for 2016, in the amount of $40 million. It is noted that the said provision is based on a long‑term forecast, covering a period of more than 50 years, along with observed estimates and, accordingly, the final amount that will be required to treat the salt could change, even significantly, from the amount of the present provision.
Negotiation processes with respect to potential acquisitions or joint ventures, as well as the integration of acquired or jointly developed businesses, require management to invest time and resources, in addition to significant financial investments,, and we may not be able to realize or benefit from the potential involved in such opportunities. Future acquisitions could lead to substantial cash expenditures, dilution due to issuance of equity securities, the incurrence of debt and contingent liabilities, including liabilities for environmental damage caused by acquired businesses prior to or after the date we acquired them, a decrease in our profit margins, impairment of intangible assets and goodwill; and increased governmental oversight over the Company’s activity in certain areas. There is no guarantee that businesses that have been or will be acquired or joint ventures will be successfully integrated with our current productsbusinesses and operations,, and we may not realize the anticipated benefits of such acquisitions or joint ventures and even incur losses as a result thereof.
Some of our partners or potential partners in these business initiatives are governments, governmental bodies or publicly owned companies. We may face certain risks in connection with our investments in the joint ventures and/or partnerships including, for example, if our partners'the needs, desires or intents of our partners change, if the government changes or if the ownership structure of our partners changes.
In addition, we are working on a number ofemploying several initiatives to improve our existing operations, including initiatives to increase production in Spain and reduce operating costs at our facilities. In ICL Iberia in Spain we are consolidating all
If our facilities into a single site which includes a mine and a processing plant, which would reduce costs per ton and allow for the elimination of additional bottlenecks and further expansion. In ICL UK we are executing a transition from the production of potash to the production of Polysulphate™ (planned production of up to about 800 thousand tonnes in 2019), and an expansion of the mining area in order to provide more resources. These initiatives may involve very high costs and/or take longer than we anticipate, and may not be realized and\or ultimately achieve their goals. If these initiatives will not succeed, our business, financial situationcondition and results of business and operations, as well as our competitive position, could be materially and adversely affected.
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As a multinational company, our sales may be adversely affected by currency fluctuations and restrictions,, as well as by credit risks.risks
Our global activities expose us to the impact of currency exchange rate fluctuations. Our financial statements are prepared in U.S.US dollars. Our sales are made in a variety of currencies, primarily in U.S.US dollars and euros. As a result, we are currently subject to significant foreign currency risks that affect our financial results and may face greater risks as we enter new markets. We may also be exposed to credit risks in some of these markets. The imposition of price controls and restrictions on the conversion of foreign currencies could also have a material adverse effect on our financial results. Part of our operating costs are incurred in currencies other than U.S.US dollars, particularly in euros, NIS, GBP, BRL and RMB. As a result, fluctuations in exchange rates between the currencies in which such costs are incurred and the U.S.US dollar may have a material adverse effect on the results of our operations, the value of the balance sheet items denominatedmeasured in foreign currencies and our financial condition.
We use derivative financial instruments and "hedging" measures to manage some of our net exposure to currency exchange rate fluctuations in the major foreign currencies in which we operate. However, not all of our potential exposure is covered, and somecertain elements of our consolidatedthe Company’s financial statements, such as our operating profit, long-term employee liabilities (IAS 19), lease liabilities (IFRS 16) and equity, are not fully protected against foreign currency exposures. Therefore, our exposure to exchange rate fluctuations could have a material adverse effect on our financial results.
See “Item 11 - – Quantitative and Qualitative Disclosures about Market Risk—Risk — Exchange Rate Risk”Risk”.
Because some of ourthe Company’s liabilities bear interest at variable rates, we are exposed to the risk of interest rate increases.increases
A portion of our liabilities bear interest at variable rates. Werates and therefore, we are exposed to the risk stemming from an increase in interest rates, which would increase our financing expenses and adversely affect our results.rates. Such increase in interest rates may also occur as a result of a downgrade in our credit rating. See “Item 11 - Quantitative and Qualitative Disclosures about Market Risk— Interest Rate Risk”.
From time to time, the Company uses financial instruments including derivatives in order to hedge this exposure. The Company uses interest rate swap and cross currency swaps contracts mainly in order to reduce the exposure to cash flow risk in respect of changes in interest rates.
As part of the global reform in interest rate benchmarks, the USD Libor and the Libor GBP settings ceased from July 1, 2023 and January 1, 2022, respectively and replaced by SOFR (USD) and SONIA (GBP) Benchmark.
An increase in interest rates would increase our financing expenses and could materially and adversely affect our business, financial condition and results of operations.
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We aremay be exposed to material fines, penalties and other sanctions and other adverse consequences arising out of FCPA investigations and related matters.matters
We are required to comply with the U.S.US Foreign Corrupt Practices Act (the "FCPA"), the UK Bribery Act and similar anti-corruption laws in other jurisdictions around the world, in the countries where we do business.operate. We operate and sell in countries that may be considered to be ofas high risk in this regard. Compliance with these laws has been subject to increasing focus and activity by regulatory authorities, both in the US and elsewhere, in recent years. Actions by our employees, as well as third party intermediaries acting on our behalf, in violation of such laws, whether carried out in the United StatesUS or elsewhere in connection with the conduct of our business, could expose us to significant liability for violations of the FCPA or other anti-corruption laws and accordingly may have a material adverse effect on our reputation and our business, financial condition and results of operations.
Our information technology (IT) systems and operational technology (OT) systems, including our hardware, software and telecommunications networks, as well as those of our third-party vendors and service providers, are critical to the operation of our business, and essential toincluding our ability to successfully perform day-to-day operations. An intrusion,
Any cyberattack, interruption, breakdown, destruction, disruption, cybersecurity breach or breakdown ofother similar incident with respect to our, information technologyor our third-party vendors’ or service providers’, IT systems, and/OT systems or infrastructure by authorized or unauthorized persons could materially and adversely affect our business and operations and, in some cases, even lead to environmental damage. In addition, a significant disruption to our computerized systems could causedamage or other harm ofor damage to the civilian population located in the vicinity of our production facilities. We may not be able to anticipate, detect or react to such incidents in a timely manner or adequately remediate any such incidents. Moreover, wesuch incidents could experience business interruption, information or money theft and/or reputational damage as a result of cyber-attacks, which may compromise our systems, lead to data leakage and to disruption ofalso disrupt sensitive production facilities and/or the security thereof, whether internallythereof; compromise our, or at our third party providers. third-party vendors’ or service providers’, systems or networks; result in theft, loss or destruction of information, money or other assets; require significant management attention and resources; result in the violation of applicable data privacy and cybersecurity laws and regulations; subject us to legal liabilities, damages, penalties, fines, enforcement actions and notification obligations; negatively impact our reputation among our customers, business partners and the public, and cause us to incur significant costs, any of which could have a material adverse effect on our business, financial condition and results of operations.
Our, and some of our third-party vendors’ and service providers’, systems and networks have been, and are expected to continue to be, the target of malware and other cyber-attacks. In spite ofcyberattacks. Despite our investment in measures to reducemitigate these risks, we cannot guarantee that these measures will be successful in preventing any compromise, and/disruption or disruptionfailure of our information technologydata or our IT systems, OT systems or infrastructure. We also have a limited ability to control or monitor the operations and related data. In addition, assecurity of our third-party vendors and service providers, and there can be no assurance that the data, IT systems, OT systems or infrastructure owned or controlled by such third parties will be secure. Further, we may have limited recourse with such third-party vendors or service providers in the event an issue arises. As we become more dependent on information technologiesIT systems, OT systems and infrastructure to conduct our operations, and as the number, sophistication and sophisticationseverity of cyber-attackscyberattacks increase, the risks associated with cyber securitycybersecurity increase. These risks apply both to us,Additionally, as cybersecurity threats and to third parties on whose systems we rely for the conduct of our business. Cyber threats are persistent and constantly evolving. Such threats have increased in frequency, scope and potential impact in recent years, which increase the difficulty of detecting and successfully defending against them. As cyber threatsincidents continue to evolve, we may be required to incur additional expenses in order to enhance our protective measures or to remediate any information security vulnerability. Cyber-attacksvulnerability, security breach or other similar incident.
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These risks apply to both our operations and to the operations of third parties crucial to our business. Cybersecurity threats and incidents, characterized by uniqueness, persistence and constant evolution, may be carried out by organized criminals, terrorists, hacktivists, nation-states, state-sponsored organizations or other threat actors with malicious intentions and significant resources and sophistication, any of which may see their effectiveness enhanced by the increasing use of artificial intelligence (AI). Given the high level of threat and sophistication, robust defense capabilities and increased resources are imperative but cannot guarantee complete protection from cybersecurity risks. These risks encompass various forms, including, but not limited to, installation of malicious software, ransomware, viruses, social engineering (including phishing attacks and other intrusion, interruption, destructionforms of digital impersonation), denial of service attacks, employee theft or breakdownmisuse, unauthorized access to data, software bugs, server malfunctions, software or hardware failure, and other cybersecurity threats and incidents. These risks may derive from human error, fraud or malice from employees or third parties or accidental technological failure and have increased in frequency, scope and potential impact in recent years, posing challenges in effective detection, defense, mitigation and remediation. Notably, these risks have been heightened in connection with ongoing global conflicts and other geopolitical events, and we cannot be certain how this new risk landscape will impact our operations. When geopolitical conflicts develop, critical infrastructures may be targeted by nation-states or state-sponsored organizations even if they are not directly involved in the conflict, and there can be no assurance that our business will not become a potential target.
Our operations also depend on the timely backups, maintenance, upgrade, software updates and replacement of such systems. While we regularly evaluate the need to backup, maintain, upgrade, update or replace such systems to protect our operations, stay current on products offered by our third-party vendors and service providers, and improve the efficiency and scope of our IT and OT capabilities, such efforts may not result in the productivity or cybersecurity improvements at the levels anticipated or could adversely impact our operations by requiring substantial capital expenditures, diverting management’s attention, or causing delays, disruptions or difficulties in transitioning to new systems. Any of the foregoing, if not anticipated or appropriately mitigated, could have an adverse and material effect on our business, financial condition and results of operations.
Even though the Company has insurance coverage associated with the foregoing, it may not be sufficient to cover all potential losses. We also cannot ensure that our existing cybersecurity insurance coverage will be sufficient to cover the successful assertion of one or more large claims against us, continue to be available on acceptable terms, or at all, or that the insurer will not deny coverage as to any future claim.
For further information technology systems and/or infrastructure alsoon our cybersecurity policies and measures, see “Item 16K — Cybersecurity.”
Compliance with and changes in data privacy and cybersecurity laws and regulations could require significant management attentionus to make substantial capital expenditures and resources, negatively impactincur costs and liabilities and adversely affect our reputationperformance
In the ordinary course of business, we collect, use, store, disclose, transfer and otherwise process personal information, including personal information specific to employees, customers, vendors and other individuals. We may transfer some of this personal information to third parties with whom we do business, such as our third-party vendors and service providers. Accordingly, we are subject to a variety of stringent data privacy and cybersecurity laws and regulations at the state, federal and international level, as well as contractual requirements, industry standards and other obligations related to data privacy and cybersecurity. For example, at the US state level, we are subject to, among other things, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, which gives California residents certain rights with respect to their personal information. At the US federal level, we are subject to, among other things, the authority of the US Federal Trade Commission, which initiates enforcement actions in response to cybersecurity breaches and regulates unfair or deceptive acts or practices, including with respect to data privacy and cybersecurity. At the international level, we are subject to, among other things, the EU’s General Data Protection Regulation (the “GDPR”) and, following the withdrawal of the UK from the EU, the UK General Data Protection Regulation (i.e., a version of the GDPR as implemented into UK law), both of which impose strict obligations and restrictions concerning the processing of personal data and provide certain individual privacy rights to persons whose data is processed.
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Additionally, our
The legal and regulatory environment surrounding data privacy and cybersecurity is rapidly evolving, and such laws and regulations may be interpreted and applied differently over time and from jurisdiction to jurisdiction, and it is possible that they will be interpreted and applied in ways that may have a material and adverse impact on our business. While we have implemented certain measures to comply with applicable data privacy and cybersecurity laws and regulations, as well as contractual requirements, industry standards and other obligations, such laws and regulations are in some cases relatively new and the interpretation and application of these laws and regulations are uncertain. Thus, there can be no assurance that our efforts will be deemed compliant with such laws and regulations. As discussed earlier, we are also subject to the risks of cybersecurity threats or incidents, which may themselves result in a violation of such laws and regulations and may require us to report certain incidents to affected individuals or the relevant regulatory authorities. Compliance with these laws and regulations, other similar laws and regulations that may be enacted in the future and other applicable data privacy and cybersecurity obligations could also cause us to incur substantial costs or require us to change our business practices, including our data practices, in a manner adverse to our business. Any failure, or perceived failure, by us to comply with applicable data privacy and cybersecurity obligations could result in enforcement actions, investigations, litigation, imposition of fines or civil or criminal penalties. We also post public privacy policies and other documentation regarding our collection, use, storage, disclosure, transfer and other processing of personal information, and any actual or perceived failure to comply with our published privacy policies and other documentation may carry similar consequences if our published policies and other documentation are found to be deceptive, unfair or misrepresentative of whichour actual practices. Any of the foregoing could have a material adverse effect on our business, financial condition and results of operations.
Failure to retain and\and/or recruit personnel for key personnel,operational/professional positions, or to attract additional executive and managerial talent, could materially and adversely affect our business.business
Given the complexity of our increasing size, complexitybusinesses and thetheir global reach, of our business and multiple areas of focus, each of which could constitute a significant stand-alone company, we greatly rely upon our ability to recruit and retain highly qualified and skilled management and other employees.employees,including engineers, agronomists, scientists, technical equipment operators, programmers, data scientists, and other employees with special expertise. Much of our competitive advantage is based on the expertise, experience and know-how of our key management personnel. Any loss of service of key members of our organization, or any diminution in our ability to continue to attract high-quality employees may delay or prevent the achievement of major business objectives and may have a material adverse effect on our business, financial condition and results of operations.
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We may not succeed in reducing our operating expenses within the framework of various efficiency programs implemented by the Company in its various sites.sites
The instruments relating to our debt contain covenants and, in some cases, require us to meet certain financial ratios. Any failureFailure to comply with thesefinancial covenants could result in an event of default under the applicable instrument, which could result in the related debt and the debt issued under other instruments becoming immediately due and payable. In such event, we would need to raise funds from alternative sources, which may not be available to us on favorable terms or at all. Alternatively, any such default could require us to sell our assets or otherwise curtail operations in order to satisfy our obligations to our creditors.
In September 2021, the Company entered into a new sustainability linked loan (SLL) agreement and in April 2023, into a Sustainability-Linked Revolving Credit Facility Agreement, both of which includes sustainability performance targets, any failure to comply with these targets or failure to successfully track certain measurements we need to provide pursuant to the SLL, may result in penalties and impede our efforts to raise funds, which may not be available to us on favorable terms or at all, especially as such loans become increasingly common. For further information, see Note 13 to our Audited Financial Statements.
The Company is exposed to risks relating to its current and future activity in emerging markets
We operate in several emerging markets and may have future activities in additional emerging markets. Activity in these regions is exposed to the socioeconomic conditions, as well as to the laws and regulations governing the agricultural, food and industrial sectors in these countries. The additional risks entailed in operating in emerging markets include, but are not limited to, high inflation rates; extreme fluctuations in exchange rates, martial law, war or civil war; social unrest; organized crime; expropriations and nationalizations; rescindment of existing licenses, approvals, permits and contracts; frequent and significant changes in taxation policies; restrictions on the use and trade of foreign currency. Governments in certain jurisdictions often intervene in the country’s economy, and at times even introduce significant changes to policy and regulations. Changes in the policies governing the food, agricultural and industrial sectors or changes in political attitudes in the countries wherein we operate could adversely affect our operations or profitability. Our operations could be affected at various degrees by governmental regulations relating to production limitations, price controls, controls of export, currency transfer, product imports and supply, taxes and royalties, divesture of property, licenses, approval and permits, environmental issues, real estate claims by local residents, water use and workplace safety. Failure to comply with domestic laws, regulations and procedures may result in the loss, revocation or divesture of licenses, imposition of additional local oversight of activities or other interests. We are monitoring the developments and policies in emerging markets in which we operate, and regularly assess their effect on our operations; however, such developments cannot be accurately anticipated, which, insofar as they occur, could adversely and even materially affect our activity and/or profitability.
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Risks Related to Our Industry
Sales of our fertilizer products are subject to the situationconditions in the agricultural industry.industry
Most of our fertilizer products are sold to producers of agricultural produce. Fertilizer sales may be adversely affected as a result of a decline in agricultural produce prices or the availability of credit, or other events that cause farmers to plant less and consequently reduce their use of fertilizers. For example, periods of high demand, increasing profits and high capacityhigh-capacity utilization tend to lead to new investment in crops and increased production. This growth increases supply until the market is over‑saturated, leading to declining prices and declining capacity utilization until the cycle repeats. As a result, the prices and quantities of fertilizer products sold have been volatile. As potash and phosphate prices and quantities sold have a very significant influence on our business results, low prices and/or low quantities and/or a decrease in prices maycould cause our results of operations to fluctuate and, potentially, materially deteriorate.
The priceprices at which we sell our fertilizer products and our sales volumes could fall in the event of industry oversupply conditions, which could have a material adverse effect on our business, financial condition and results of operations. Alternatively, high prices may lead our customers to delay purchases in anticipation of lower prices in the future, thereby decreasing our sales volumes. These factors could materially and adversely affect our business, financial condition and results of operations.
In addition, government policies, and specifically, subsidy levels, may affect the amountnumber of agricultural crops and, as a result, sales of our fertilizer products. Generally, reductions in agricultural subsidiesto the farmer or increases in subsidies to local fertilizer manufacturers in countries where we sell our products have an adverse effect on our fertilizer business. In addition, the ongoing trade dispute between the US and China may also affect the sales of some of the Company’s products through continued imposition of existing tariffs or increased tariffs or other trade barriers that may negatively affect our sales directly and/or indirectly by affecting our customers’ business and operations, which could materially and adversely affect our business, financial condition and results of operations.
Finally, the agricultural industry is strongly affected by local weather conditions. Conditions such as heavy storms, long periods of drought, floods, or extreme seasonal temperatures could affect the local crop’s quality and yield and cause a reduction in the use of fertilizers. Loss of sales in an agricultural season in a target country as a result of weather‑related events can cause a loss of sales for the wholeentire year.
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Sales of our SpecialtyIndustrial Products and Phosphate Solutions segments’ products are affected by various factors that are not within our control, including developments in the end markets of industrialmaterials and food, legislative changes, recession or economic slowdown and changes in currency exchange rates.
Sales of our SpecialtyIndustrial Products and Phosphate Solutions segments’ products are also affected by global economic conditions in the markets in which we operate. For example, our sales may be affected by the slow economic recovery or any reversal thereof in Europe. In addition, we have significant manufacturing operations in Europe and a large portion of our European sales are in euros, while some of our competitors are manufacturers located outside Europe whose operational currency is the U.S.US dollar. As a result, a strengthening of the euro exchange rate against the U.S.US dollar increases the competitive advantage of these competitors.
The operationsoperation of thisthe Phosphate Solutions segment in the food industry is affected by legal provisions and licensing regulations relating to health. This area is characterized by stringent regulatory requirements that are updated from time to time by enforcement agencies. Adjustments of our operations to the changes in regulation, including the technological complexity and feasibility of such adjustments, may adversely affect the sales of our products, incidental to any specific prohibitions and/or adjustments required in order to meet regulatory requirements.
In addition, the ongoing trade dispute between the US and China may also affect the sales of some of our products through continued imposition of the existing tariffs or increased tariffs or other trade barriers that may negatively affect our sales directly and/or indirectly by affecting our customers’ business and operations, which could materially and adversely affect our business, financial condition and results of operations.
Sales of our magnesium products are affected by various factors that are not within our control, including developments in the end markets of magnesium, legislative changes, recession or economic slowdown, changes in currency exchange rates, antidumping and countervailing duties
Sales of our magnesium products are affected by global economic conditions in the markets in which we operate. For example, our sales may be affected by any economic reversal in the aluminum sector, steel sector, and the casting sector of parts made of magnesium alloys (mainly for uses in the vehicle industry).
In addition, environmental regulations, significant changes in the USD against the NIS exchange rate and trade barriers may negatively affect our sales directly and/or indirectly by affecting our customers’ business and operations, which could materially and adversely affect our business, financial condition and results of operations.
The Company’s magnesium activities may be subject to antidumping and countervailing duties on imports of magnesium that are imposed in order to protect the local producer in the target markets. If such duties are imposed, it may result in difficulties or inability to sell our magnesium products in these markets and thus negatively affect the Company's magnesium activities economic viability.
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Our operations are subject to a crisis in the financial markets.markets
As an industrial chemicalsa leading global specialty minerals company, we are exposed to various legislative and licensing restrictions in the areas of environmental protection and safety. Related compliance costs and liabilities may adversely affect the results of our operations.
Our manufacturing facilities contain sophisticated manufacturing equipment. In the event of a major disruption in the operations of any of this equipment, we may not be able to resume manufacturing operations for an extended period of time.period. The occurrence of material operating problems at our facilities including, but not limited to, the events described above, may have aan adverse and even material adverse effect on us, during and after the period of such operational difficulties, as we areand expose us to significant liabilities and costs, dependent on the continued operation of our production facilitiesfacilities. For example, a malfunction in the operation of the dredger as part of the salt harvesting activity in DSW, designed to maintain a fixed brine volume at Pond 5, could harm, and we may be exposed to substantial liabilitieseven materially so, the production capacity of extracted minerals, and costs under these circumstances.thereby adversely and materially affect our operations.
For additionalfurther information, see “Item 4 - – Information on the Company—Company — B. Business Overview— RegulatoryOverview”.
Accidents occurring during our industrial and Environmental, Healthmining operations and Safety Matters”failure to ensure the safety of our workers and Note 21 toprocesses, could adversely affect our Audited Financial Statements.business
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Failure to implement, or a deviation from our safety measures and standards, or failure to prevent or appropriately respond to a safety-related incident, or other operational risks may also be found liable for claims related to land treatment where miningresult in personnel injuries or fatalities, production shutdowns, disruption of operations and other activities were conducted, even after such activitiessignificant legal and financial liabilities. The occurrence of material safety incidents at our facilities could have ceased.
For further information, respecting legal proceedings and actions, see Note 21 to our Audited Financial Statements and “Item 8 - Financial Information— A. Consolidated Statements and Other Financial Information— Legal Proceedings”.4 – Information on the Company — B. Business Overview “.
We are exposed to the risk of third‑party and product liability claims.claims
We are also exposed to risk of liability related to damage caused to third parties by our operations or by our products. For example, we are subject to claims alleging liability for the impacts from the rising water level at one of our evaporation ponds at the Dead Sea. See Note 21 to our audited financial statements. We have third‑party liability insurance for damages caused by our operations and for product liability. However, there is no certainty that this insurance will fully cover all damage for such liability. Moreover, sale of defective products by us might lead to a recall of products by us or by our customers who had used our products. In addition, the sale of defective products, as well as damage caused to third parties by our activities or our products may harm our public image and reputation and, as a result, materially and adversely affect our business, financial situationcondition and results of operation.operations.
Product recalls or other liability claims as a result of food safety and food-borne illness concerns could materially and adversely affect us
We develop and produce functional food ingredients and phosphate additives for the food industry. Selling ingredients and additives that will be used in products sold for human consumption involves inherent legal and other risks, including product contamination, spoilage, product tampering, allergens, or other adulteration. We could decide to, or be required to, recall products due to suspected or confirmed product contamination, adulteration, misbranding, tampering, or other deficiencies. Product recalls or market withdrawals could result in significant losses due to their costs, the destruction of product inventory, and lost sales due to the unavailability of the product for a period of time.
Because food safety issues could be experienced at the source or by food suppliers or distributors, food safety could, in part, be beyond our control. Regardless of the source or cause, any report of food-borne illness or other food safety issues such as food tampering or contamination of products that contain our ingredients or additives could adversely impact our reputation, hindering our ability to renew contracts on favorable terms or to obtain new business, and have a negative impact on our sales. Even instances of food-borne illness, food tampering or contamination of products that do not contain our ingredients or additives could result in negative publicity and could negatively impact our sales.
We may also suffer losses if our products or operations violate applicable laws or regulations, or if our products cause injury, illness, or death. A significant product liability or other legal judgment or a related regulatory enforcement action against us, or a significant product recall, may materially and adversely affect our reputation and profitability. Awards of damages, settlement amounts and fees and expenses resulting from such claims and the public relations implications of any such claims could have an adverse effect on our business. The availability and price of insurance to cover claims for damages are subject to market forces that we do not control, and such insurance may not cover all the costs of such claims and would not cover damage to our reputation. Moreover, even if a product liability or fraud claim is unsuccessful, has no merit, or is not pursued, the negative publicity surrounding assertions against our products or processes could materially and adversely affect our business, financial condition and results of operations.
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Our insurance policies may not be sufficient to cover all actual losses that we may incur in the future.future
We maintain, among others, property, environmental, business interruption, casualty and malpractice insurance policies. However, we are not fully insured against all potential hazards and risks incidental to our business, including to damages which may be caused to us by the negligence of our employees. We are subject to various self‑retentions and deductibles under these insurance policies. As a result of market conditions, our loss experience and other factors, our premiums, self‑retentions and deductibles for insurance policies can increase substantially and, in some instances, certain insurance may become unavailable or available only for reduced amounts of coverage. In addition, significantly increased costs could lead us to decide to reduce, or possibly eliminate, coverage. As a result, a disruption of the operations at one of our key facilities or a significant casualty could have a material adverse effect on our financial condition and results of operations. Furthermore, our insurance may not be sufficient to fully cover our expenses related to claims and lawsuits that may be filed against us, or expenses related to legislation that is being promoted and enacted with adverse effect on us. In addition, it is possible that there are risks that we did not identify and are thus not covered by the insurance policies acquired by the Company.
Risks Related to the Company’sOur Operations in Israel and/or to the Company being an Israeli companyCompany
Due to our location in Israel and/or being an Israeli company, which also operates outside of Israel, our business and operations may be exposed to war or acts of terror. In addition, we are exposed to risks of terrorist acts, war and governmental instability in the regions outside Israel where we operate.terror
War, acts of terror and\and/or governmental instability in the regions where we operate are likely to negatively impact us. This impact may manifest itself in production delays, distribution delays, loss of property, increasing cyber-attacks, injury to employees, political sanctions and difficulties in obtaining insurance coverage or increased insurance premiums. In addition, our sales may be subject to economic boycotts or other sanctions on our products.
Our plants may be targets for terrorist acts due to the chemicals they store. We do not have property insurance against war or acts of terror, other than compensation from the State of Israel pursuant to Israeli law, which covers only physical property damage, without accounting for reinstatement values.
It is noted that since the construction of our initial facilities in the 1950s, we have never experienced material business interruptions as a result of war or acts of terror, but we can provide no assurance that we will not be subject to any such interruptions in the future.
Our computerIT systems, OT systems, and communications networks,infrastructure, and production technologiesthose of our third-party vendors and service providers constitute a basic platform for operational continuity and are also potential targets for acts of terror.malware and other cyberattacks. Potential cybercybersecurity threats and incidents can cause, among other things, damage to such systems and our plants, data loss, software vulnerability and external and internal access to sensitive and confidential information, including personal information. We have implemented a plan for safeguarding and backing up the informationsuch systems. The activities include:Such implementation includes separation of our information networks from the computerized process systems, physical protection of the computer rooms and terminals and training of employees. However, there is no assurance that our planthe Company will successfully accomplish complete protection from cybersecurity risks. For more information, see “Any cyberattack, interruption, breakdown, destruction, disruption, cybersecurity breach or other similar incident with respect to our, or our vendors’ or service providers’, IT systems, OT systems or infrastructure could materially and adversely affect our business”.
In October 2023, the Israeli government declared a state of war in response to an attack on civilians at its goals.southern border. Subsequently, additional attacks were launched towards northern Israel. The new security situation has led to several challenges, including some disruptions in supply chains, a shortage of personnel due to mobilization for reserve duty, and fluctuations in foreign currency exchange rates relative to the Israeli shekel.
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Regional tensions involving Houthis attacks on commercial ships have recently intensified, affecting shipping operation at the Red Sea. This could lead to delays in shipments as well as increased shipping and insurance costs.
The Company has taken measures to ensure the safety of its employees and business partners, as well as the communities in which it operates, in order to minimize any potential impact on its business, including avoidance of disruption to production in its facilities in Israel.
However, since the developments related to the war situation, as well as its duration, are unpredictable, the Company has no ability to estimate the extent of the war’s potential impact on its future business and results. The Company continuously monitors the developments and will take all necessary actions to minimize any negative consequences to its operations and assets.
The ultimate impact of a war is highly uncertain and subject to change. To the extent that a war may negatively impact our business, results of operations, liquidity or financial condition, it may also have the effect of increasing many of the other risks described in this “Risk Factors” section.
We conduct operations in Israel and therefore our business, financial condition and results of operations may be materially and adversely affected by political, economic and military instability in Israel and its region.region
Our headquarters, some of our operations, and some of our mining facilities are located in Israel and many of our key employees, directors and officers are residents of Israel. Accordingly, political, economic and security conditions in Israel and the surrounding region may directly affect our business. Since the establishment of Israel in 1948, a number of armed conflicts have taken placeoccurred between Israel and its Arab neighbors, Hamas (an Islamist militia and political group in the Gaza Strip) and Hezbollah (an Islamist militia and political group in Lebanon), the most recent conflict is the war in Gaza, which is still ongoing. Any hostilities involving Israel or the interruption or curtailment of trade within Israel or between Israel and its trading partners could materially and adversely affect our business, financial condition and results of operations and could alsoresult in, inter alia, lowering the credit rating of the State of Israel and make it more difficult for us to raise capital. Recent political uprisings, social unrest and violence in various countries in the Middle East and North Africa, including Israel’s neighbors Egypt, Lebanon and Syria, are affecting the political stability of those countries. This instability may lead to deterioration of the political relationships that exist between Israel and these countries and has raised concerns regarding security in the region and the potential for armed conflict. In addition, Iran has threatened to attack Israel and is widely believed to be developing nuclear weapons.
In addition, the assessment is that Iran has a strong influence among parties hostile to Israel in areas that neighbor Israel, such as the Syrian government, Hamas in Gaza and Hezbollah in Lebanon. Any armed conflicts, terrorist activities or political instability in the region could materially and adversely affect our business, financial condition and results of operations. In addition, the political and security situation in Israel may result in parties with whom we have agreements involving performance in Israel claiming that they are not obligated to comply with their undertakings under those agreements pursuant to force majeure provisions in such agreements. In addition, because we are an Israeli company, our sales may be subject to economic boycotts or other sanctions on our products.
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Our operations may be disrupted as a result of the obligation of Israeli citizens to perform military reserve service.service
Many Israeli citizens are obligated to perform one month, and in some cases more, of annual military reserve service until the age of 45 (or older, for reservists with certain occupations) and, in the event of a military conflict, may be called to active duty. In 2023, during the war in Gaza, approximately 15% of ICL employees in Israel were drafted for army reserve duty. We made some adjustments to our operations, to meet customer commitments and production requirements without incurring any material impact. As of today, the majority of the Company’s employees in Israel who had been called up for reserve duty have now returned to full-time work. Although periods of significant call‑ups of military reservists which occurred in the past in response to terrorist activities have had no significantmaterial impact on our operations, it is possible that future military reserve duty call‑ups will occur in the future, which mightadversely disrupt our operations.
It may be difficult to enforce a U.S.US judgment against us and our directors and officers, in Israel or the United States,US, or to serve process on our directors and officers.officers
We are incorporated under Israeli law. Many of our directors and executive officers reside outside the United States,US, and most of our assets are located outside the United States.US. Therefore, a judgment obtained in the United StatesUS against us or many of our directors and executive officers, including one based on the civil liability provisions of the U.S.US federal securities laws, may not be collectible in the United StatesUS and may not be enforced by an Israeli court. It also may be difficult for an investor to effect service of process on these persons in the United StatesUS or to assert claims under the U.S.US securities laws in original actions instituted in Israel.
We are incorporated under Israeli law. The rights and responsibilities of the holders of our ordinary shares are governed by our Articles of Association and Israeli law. These rights and responsibilities differ in some respects from the rights and responsibilities of shareholders in typical U.S.US corporations. In particular, a shareholder of an Israeli company has a duty to act in good faith toward the company and other shareholders and to refrain from abusing its power in the company, including, among other things, in voting at the general meeting of shareholders on matters such as amendments to a company’s articles of association, increases in a company’s authorized share capital, mergers and acquisitions and interested party transactions requiring shareholder approval. In addition, a shareholder who knows that it possesses the power to determine the outcome of a shareholder vote or to appoint or prevent the appointment of a director or executive officer in the company has a duty of fairness toward the company. There is limited case law available to assist us in understanding the implications of these provisions that govern shareholders’ actions.
These provisions may be interpreted to impose additional obligations and liabilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S.US corporations.
In addition, in light of the Company’s listing for trading on a stock exchange in the United States,US, and also considering the fact that our parent company is subject only to the Israeli securities law, we are subject, in certain aspects, to both Israeli law and U.S.US law, a fact which may cause us to face both reporting and legal conflicts.
In recent years we have seen a significant rise in the filing of class actions andin Israel against public companies, including derivative actions against the Company,company, its executives and Board members.members
In recent years we have seen a significant rise in the filing of class actions and derivative actions in Israel against companies, executives and Board members. While the vast majority of such claims are dismissed, companies like us ICL are forced to bear increasing increasingly invest resources, including monetary expenses and investment of management attention due to these claims. This state of affairs could adversely affect the willingness of our executives and Board members to take risksmake decisions which could have benefitted our business operations. Such legal actions could also be taken with respect to the validity or reasonableness of the decisions of our Board of Directors.
For information respecting legal proceedings and actions, see Note 18 to our Audited Financial Statements and “Item 8 - Financial Information— A. Consolidated Statements and Other Financial Information”.
Risks Related to Our Ordinary Shares
We have one key shareholder who is our controlling shareholder. This controlling shareholder may influence thedecision making of decisions with which other shareholders may disagree.disagree
As atof December 31, 2017,2023, the Israel Corporation Ltd. (“Israel Corp.”) holds the controlling interest in the Company.
The interests of Israel CorporationCorp. may differ from the interests of other shareholders. Israel CorporationCorp. exercises control over our operations and business strategy and has sufficient voting power to control many matters requiring approval by our shareholders, including:
| Mergers, acquisitions, divestitures or other business combinations; |
| Future issuances of ordinary shares or other securities; |
Amendments to our Articles of Association, excluding provisions of the Articles of Association that were determined by virtue of the Special State Share; and |
In addition, this concentration of ownership may delay, prevent or deter a change in control, or deprive the investor of a possible premium for his ordinary shares as part of a sale of our Company. Moreover, as a result of the Company’s control structure, our shares may be subject to low tradability, which may hinder the sale and/or exercise of our shares. Furthermore, Israel Corp. may conduct material transactions in our shares, such as its existing margin loans that are secured by pledges of ICL shares,, and/or in their organizational structure, that we will not be able to influence but that may have a material adverse effect on our share price.
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The existence of a Special State Share gives the State of Israel veto power over transfers of certain assets and shares above certain thresholds, and may have an anti‑takeover effect.effect
The State of Israel holds a Special State Share in our Company and in some of our Israeli subsidiaries. The Special State Share entitles the State of Israel, among other things, to restrict the transfer of certain assets and some acquisitions of shares by any person that would become a holder of specified amounts of our share capital. Because the Special State Share restricts the ability of a shareholder to gain control of our Company, the existence of the Special State Share may have an anti‑takeover effect and therefore depress the price of our ordinary shares. Furthermore, the existence of the Special State Share may prevent us from realizing and developing business opportunities that we may come across. To the best of the Company’s knowledge, during the second half of 2018, an inter-ministerial team was established, headed by the Ministry of Finance, whose purpose is, among other things, to regulate the authority and supervision in respect of the Special State Share, as well as reduce the regulatory burden. In January 2019, the work of this team was put on hold until further notice due to the dissolution of the Knesset and lack of permanent Government. As at the date of the report, the Company is unable to estimate the implications of this process on the Company, if any, but it is possible that the introduction of an additional array of regulatory provisions, coupled with strict enforcement, may increase the uncertainty in the management of Company’s operations relating to natural resources in Israel and may have a material adverse effect on our business, our financial condition and results of operations.
The market price of our ordinary shares is subject to fluctuation, which could result in substantial losses for our investors.investors
The stock market in general and the market price of our ordinary shares, in particular, are subject to fluctuation, and changes in our share price may occur unrelated to our operating performance. The market price of our ordinary shares on the TASE or NYSE has fluctuated in the past, and we expect it will continue to do so. The market price of our ordinary shares is and will be subject to a number ofseveral factors, including:
| Expiration or termination of licenses and/or concessions; |
| General stock market conditions; |
| Decisions by governmental entities that affect us; |
| Variations in our and our competitors’ results of operations; |
| Changes in earnings estimates or recommendations by securities analysts; and |
| General market conditions and other factors, including factors unrelated to our operating performance. |
These factors and any corresponding price fluctuations may materially and adversely affect the market price of our ordinary shares and result in substantial losses for our investors.
If equity research analysts issue unfavorable commentary or cease publishing reports about our ordinary shares, the price of our ordinary shares could decline.decline
The trading market for our ordinary shares relies in part on the research and reports that equity research analysts publish about us and our business. The price of our ordinary shares could decline if one or more securities analysts downgrade our ordinary shares or if those analysts issue other unfavorable commentary or cease publishing reports about us or our business.
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Shareholders may be diluted by the future issuance of additional ordinary shares, among other reasons, for purposes of carrying out future acquisitions, financing needs, and also as a result of our incentive and compensation plans.plans
As at the date of this Annual Report, we have approximately 183171 million NIS 1 par value ($47(approximately $49 million) shares authorized but unissued. We may choose to raise substantial equity capital in the future in order: to acquire or invest in businesses, products or technologies and other strategic relationships and to finance unanticipated working capital requirements in order to respond to competitive pressures. The issuance of any additional ordinary shares in the future, or any securities that are exercisable for or convertible into our ordinary shares, will have a dilutive effect on our shareholders as a consequence of thea reduction in the percentage ownership.
We may not be able to maintain our dividend payment.payment
Our ordinary shares are traded on different markets which may result in price variations.variations
Our ordinary shares have been traded on the TASETel Aviv Stock Exchange (TASE) since 1992 and have been listed on the NYSENew York Stock Exchange (NYSE) since September 2014. Trading in our ordinary shares on these markets occurs in different currencies (U.S.(US dollars on the NYSE and NIS on the TASE) and takes placeoccurs at different times (resulting from different time zones, different trading days and different public holidays in the United StatesUS and Israel). The trading prices of our ordinary shares on these two markets may differ due to these and other factors. Any decrease in the price of our ordinary shares on one of these markets could cause a decrease in the trading price of our ordinary shares on the other market.
As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of applicable SEC and NYSE requirements, which may result in less protection than is afforded to investors under rules applicable to domestic issuers.issuers
As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of those otherwise required by the NYSE for domestic issuers. For instance, we have elected to follow home country practices in Israel with respect to, among other things, composition and function of the Audit and Finance Committee and other committees of our Board of Directors and certain general corporate governance matters. In addition, in certain instances we will follow our home country law, instead of NYSE rules applicable to domestic issuers, which require that we obtain shareholder approval for certain dilutive events, such as an issuance that will result in a change of control of our Company, certain transactions other than a public offering involving issuances of a 20% or more interest in our Company and certain acquisitions of the stock or assets of another company. Following our home country corporate governance practices as opposed to the requirements that would otherwise apply to a U.S.US company listed on the NYSE may provide less protection than is afforded to investors under the NYSE rules applicable to domestic issuers.
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In addition, as a foreign private issuer, we are exempt from the rules and regulations under the U.S.US Securities Exchange Act of 1934, as amended (the “Exchange Act”), related to the furnishing and content of proxy statements and the requirements of Regulation FD (Fair Disclosure), and our directors, officers and principal shareholders are exempt from the reporting and short‑swing profit recovery provisions of Section 16 of the Exchange Act. In addition, we are not required under the Exchange Act to file annual, quarterly and current reports and financial statements with the SEC as frequently or as promptly as domestic companies whose securities are registered under the Exchange Act.
We have experienced, and expect to continue to experience, fluctuations in our quarterly results of operations.operations due to the mix of products we sell and the different countries in which we operate. Our sales have historically been stronger in the second and third quarters of each year. This is due toIn the mixpast years, we are witnessing changes in seasonal patterns which are reflected in high off-season demand as a result of products we sell in those quarters, as well asgovernments’ food security strategies and the mix of sales in different countries.like, which increases uncertainty regarding future seasonality fluctuations. If, for any reason, our revenues in the second and third quarters are below seasonal norms, we may not be able to recover these sales in subsequent quartersperiods and our annual results of operations may not meet expectations. If this occurs, the market price of our ordinary shares could decline.
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Item 4 – INFORMATION ON THE COMPANY
A. HISTORY AND DEVELOPMENT OF THE COMPANY
Our legal name is Israel ChemicalsICL Group Ltd. and our commercial name is ICL. We are a public company and operate today as a limited liability company under the laws of Israel. Our registered headquarters is located at Millennium Tower, 23 Aranha Street, P.O. Box 20245, Tel Aviv 61202, Israel. The telephone number at our registered office is +972‑3‑684‑4400. Our website address is www.icl‑group.com. The reference to our website is intended to be an inactive textual reference and the information on, or accessible through, our website is not intended to be part of this Annual Report.
The Company is subject to certain of the informational filing requirements of the Exchange Act.Since the Company is a “foreign private issuer”, it is exempt from the rules and regulations underthe Exchange Act prescribing the furnishing and content of proxy statements, and the officers,directors and principal shareholders of the Company are exempt from the reporting and“short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respectto their purchase and sale of ordinary shares. In addition, the Company is not required to filereports and financial statements with the SEC as frequently or as promptly as US publiccompanies whose securities are registered under the Exchange Act. However, the Company isrequired to make certain filings with the SEC, including an Annual Report on Form 20-F containing financial statementsaudited by an independent registered public accounting firm. The SEC also maintains a website athttp://www.sec.gov that contains reports and other information that the Company files with orfurnishes electronically to the SEC.
ICL was established in Israel in 1968 as a government-owned and -operated company in Israel, and operates today as a limited liability company under the laws of Israel. In 1975, the shares of various developmentcertain companies (including, among others, ICL Dead Sea, the companies today consolidated as ICL Rotem, the bromine companiesDead Sea Bromine, Bromine Compounds and Tami) were transferred to us.ICL. In 1992, following a decision of the Israeli government to privatize our Company,ICL, the State of Israel published its tender prospectus, 20% of the Company's shares were sold to the public and its shares were registered for trading on the Tel‑Aviv Stock Exchange.Exchange (TASE). Prior to our public share issuance, a Special State Share in our Company and our main Israeli subsidiaries was issued to the State of Israel (for additionalfurther details regarding the terms of the Special State Share, see “Item 10 - Additional Information— B. Memorandum, Articles of Association and Special State Share”Share”). In 1995, the State of Israel sold its controlling interest in usthe Company (representing approximately 24.9% of our shares) to Israel Corporation,Corp., a publicly traded company on the TASE (ILCO), which was controlled at that time by the Eisenberg family. A majority of the ordinary shares, held by the stateState of Israel, were sold during the following years. In 1999, the Ofer Group acquired the Eisenberg family’s shares in Israel Corp. In 2000, the State of Israel ceased to be a stakeholder in terms of holding any of our ordinary shares, in us, but it retained theits Special State Share. In 1999, the Ofer Group acquired the Eisenberg family’s shares in Israel Corporation. In September 2014, we listed our shares on the New York Stock Exchange, and they are currently traded in Tel Aviv and in New York.
The following is a list of significant acquisitions and divestitures over the last several years:
For information about our principal capital expenditures and divestitures during the last three fiscal years, see “Item 5 - Operating Financial Results and Financial Review and Prospects—Business Overview— B. Liquidity and Capital Resources— Principal Capital Expenditures and Divestitures”Resources”.
B. BUSINESS OVERVIEW
Company Overview
Our principal assets include:
| Access to one of the world’s richest, longest‑life and lowest‑cost sources of potash and bromine (the Dead Sea). |
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A strong crop nutrition sales and marketing infrastructure that optimizes distribution channels of commodity, specialty and semi-specialty fertilizers by leveraging its commercial excellence, global operational efficiency, region-specific knowledge, agronomic and R&D capabilities, logistical assets and customer relationships.
Research & Development and Innovation: We benefit from our proximity to Israel’s global-leading high-tech and agri-tech eco-system, as well as our vast agronomy and chemistry knowledge that we have accumulated over decades. Our extensive global R&D infrastructure includes 23 R&D and Innovation centers around the world that employ 300 highly experienced personnel who have obtained our 700 active patents in 210 patent families. ICL's R&D unit supports the development of new, innovative products, applications and formulations for each of our operating segments through internal research, employee ideation and collaborative research with third parties.
An extensive global logistics and distribution network with operations in over 30 countries.
For the year ended December 31, 2017,2023, we generated total sales of $5,418$7,536 million, operating income of $629$1,141 million, adjusted operating income of $652$1,218 million, net income attributable to the shareholders of the companyCompany of $364$647 million and adjusted net income attributable to the shareholders of the companyCompany of $389$715 million. The sales of ICL Essential Minerals amountedSee "Item 5 – Financial Results and Business Overview– A. Operating Results" and Note 5 to $3,008 our Audited Financial Statements.
Sales by the Industrial Products segment totaled $1,227million and the operating incomeprofit attributable to the segment amounted to $359 totaled $220million, sales by the sales of ICL Specialty Solutions amounted to $2,650 Potash segment totaled $2,182million and the operating incomeprofit attributable to the segment amountedtotaled $668million, sales by the Phosphate Solutions segment totaled $2,483million and operating profit attributable to $554 the segment totaled $329million, and sales of the Growing Solutions segment totaled $2,073million and operating profit attributable to the segment totaled $51million.
For a breakdown of sales and a geographic market by segments, for each of the last three fiscal years, see “Item 5 - Operating – Financial Results and Financial Review and Prospects—Business Overview— A. Operating Results”.
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The Potash segment operates our potash value chain and includes primarily potash fertilizers and our magnesium business, a byproduct of potash production, which produces and sells pure magnesium and magnesium alloys, as well as chlorine and sylvinite.
The Phosphate Solutions segment is based on our phosphate value chain. It includes specialty phosphate salts and acids for various food and industrial applications, as well as commodity phosphates, which are used mainly as fertilizers.
The fourth segment, Growing Solutions, includes our specialty fertilizers business. In 2021, we expanded our geographic scope, with the acquisitions of Fertiláqua, a Brazilian specialty crop nutrition company, and a South American plant nutrition business from Compass Minerals (hereinafter - ADS). Both acquisitions were integrated into our operations during 2022 and have helped to position ICL as the leading specialty plant nutrition company in Brazil as well as balance the segment's seasonality between the Northern and Southern hemispheres.
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Industrial Products
Bromine, a member of the halogen family, is found naturally in seawater, underground brine deposits and other water reservoirs, such as the Dead Sea. Bromine concentration and extraction methods vary depending upon the source. The lower the concentration of bromine in the brines, the more difficult and expensive it is to extract. The Dead Sea, which spans Israel and Jordan, is the world’s premier source of bromine and accounts for approximately half of global supply. The Dead Sea is also the most competitive source of bromine, as it has the highest concentration, which means the least amount of water must be extracted and evaporated to produce bromine, resulting in lower energy costs.
ICL's bromine solutions play an important role in a wide range of products, enhancing the safety of consumer goods and promoting efficiency in industrial production. The largest commercial utilization of bromine is in flame retardants, which are used by the electronics and components, automotive including electric vehicles ("EVs"), building and construction, as well as furniture and textiles end-markets. Bromine and its derivatives are also used in various other industrial applications, including rubber production, oil and gas drilling, water purification, and in the pharmaceutical and food industries.
Demand for the products manufactured by ICLour Industrial Products which include solutions based on bromine and phosphorus,segment is driven by population growth, increasedimproved standards of living, highergreater environmental and safety awareness, and an increased focus on cost effective production. These trends drive demand for more environmentally friendly and safer industrial products, as well as efficient and reliable service suppliers. ICL’s products serve a diverse number of industries, such as, construction, electronics, energy (including renewable energy), water and pharmaceutical.production. Increased regulation and environmental awareness also resultdrive demand for polymeric and reactive bromine- and phosphorus-based flame retardants, which are considered more environmentally friendly.
As bromine prices increased over the past several years, reaching record highs in greaterthe fourth quarter of 2021, competitive resources that were traditionally less profitable found it advantageous to return to the market. As additional supply became available, bromine prices declined and returned to rates not seen since 2009.
The electronics end-market experienced continued weakness, which initially emerged towards the end of 2022 and persisted into 2023. The building and construction end-markets were also soft in 2023, as inflation and higher interest rates persisted on a global basis. However, demand from the oil and gas industry remained strong, and the Company also continued to serve an array of industries through its specialties minerals business, targeting food, pharma and other end-markets. Over the long-term, ICL estimates bromine demand to remain relatively stable and expects market growth to be primarily linked to above-mentioned market drivers. Additionally, demand for flame retardants including polymericis expected to keep pace with the natural electronics replacement cycle and reactive flame retardants, mercury emission controlgradually accelerate, due to expected growth in EVs and energy storage solutions bromine‑based biocides for water treatment, bromine, magnesia and potassium chloride‑based intermediatesas the AI trend materializes.
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Phosphate Specialties
Our phosphate specialties business is part of our Phosphate Solutions segment and is focused on developing products for the pharmaceutical industryfood and oil additive solutionsindustrial end-markets. These products are centered around the Company's vertical integration into phosphate rock and fertilizer-grade phosphoric acid, also known as green phosphoric acid, which undergoes a chemical process to become purified phosphoric acid, also referred to as white phosphoric acid (WPA). As part of its value-add proposition, we produce and market purified acids and phosphate salts, in addition to commodity phosphates.
According to our estimates, ICL holds a leading position in specialty phosphates in Europe, North America and Latin America, and a worldwide market share of approximately 20%. Additionally, demand for purified phosphoric acid - a key raw material for water soluble fertilizers - is an oil additive manufacturedexpected to continue to increase, driven by rapid growth in fruit and vegetable consumption and changing agricultural production systems. Similarly, phosphate salts – used in processed meats, cheeses and baked goods – have seen increased consumption in developing countries.
Consumer demand for different food products has changed dramatically over the past several decades, driven by higher income per capita, demographic shifts and lifestyle changes. Longer working hours, changing family structures, increased awareness of nutrition and health issues, and access to a broader variety of food products, have resulted in growing demand for more sophisticated, protein-enriched, unprocessed (clean label) and non-allergenic food products with improved flavor, texture and appearance. An increasingly longer supply chain and consumer awareness of food waste also drives demand for longer shelf‑life and food stability. These trends stimulate long‑term demand for food additives, such as phosphate derivatives and phosphate and protein formulations.
In 2023, we increased our food-grade WPA production at our YPH operation in China, in order to serve the lubricating oil additiveslocal food and insecticide markets. Increased regulation and environmental awareness also results in greater demand for forest fire retardants,industrial applications markets, as well as Class B fire-fighting foams, which are manufactured and sold byour battery grade MAPsales to the business line.rapidly growing lithium iron phosphate ("LFP') battery market in China.
In December 2017,the US, we broke ground on the first large-scale LFP battery materials manufacturing plant, which is expected to help meet growing demand from the energy storage, EV and clean-energy industries for US-produced-and-sourced essential battery material. ICL’s investment in the plant was augmented by a $197 million grant from the US Department of Energy. In addition, ICL signed an agreementplans to selldevelop a Customer Innovation and Qualification Center (CIQC) in St. Louis focused on cathode active material. The center is planned to be operational by the end of 2024, in line with the Company’s execution of its oil additives and fire safety businesseslong-term plan to provide commercial solutions for about $1 billion. For additional information on divestitures currentlythe energy storage systems (ESS) market in progress, see “Item 3 - Key Information— A. Selected Financial Data”.the US.
Agriculture Markets
Fertilizers
Our potash and phosphate commodity fertilizers, FertilizerpluS, and specialty fertilizers businesses serve agriculture markets worldwide.
Fertilizers serve an important role in global agriculture by providing vital nutrients to increase both crop yield and quality. Nitrogen, phosphorus and potassium (N, P and K) constitute the three major nutrients required for plant growth, and there are no artificial substitutes for potassium and phosphorous. Although these nutrients are naturally found in soil, they are depleted over time by farming, which can lead to declining crop yields and land productivity. To replenish these nutrients, farmers must apply fertilizers.
Each of these three nutrients plays a different role in plant development and helps crops achieve their growth potential. Potassium and phosphorus are vital for the plant’s physiological processes, including strengthening cereal stalks, stimulating root development, promoting leaf and fruit health, and accelerating the growth rate of crops. Potassium also enhances a plant’s ability to withstand drought and cold, improves the efficient use of nitrogen and other nutrients necessary for plant development, and improves the durability of agricultural products in storage and transportation, thereby prolonging shelf life.
Short term demand for fertilizers is volatile, seasonal and affected by factors, such as the weather in the world’s key agricultural growing regions, fluctuations in planting main crops, agricultural input costs, agricultural product prices and developments in biotechnology. Some of these factors are influenced by various countries’ government subsidies and environmental regulations or by the lines of credit granted to farmers or to producers of agriculture inputs. In addition, currency exchange rates, legislation and international trade policies have an impact on the supply, demand and level of consumption of fertilizers worldwide. Despite any short-term issues, we expect that the upward growth trend in the fertilizers market will be maintained in the long-term.
Global fertilizer demand is also driven by the supply/demand balance for grains and other agriculture products markets, which impacts prices. Supply of agriculture products is influenced by weather, planted areas and input usage, while demand is primarily influenced by population growth and dietary changes in the developing world.
Population and Income Growth per Capita. Historically, growth in global fertilizer consumption has been closely correlated to the growth of the world’s population, which is expected to grow from 8 billion in 2023 to 9.7 billion by 2050, according to the United Nations (UN). Economic growth in emerging markets supports food demand and, as a result, fertilizer use. In addition, growth in income per capita in developing markets is resulting in a shift to more protein‑rich diets through higher meat consumption – which requires larger quantities of grain for the growth of cattle. According to estimates published by the International Monetary Fund (IMF), GDP per capita in emerging markets and developing economies (current prices) is expected to grow by 4% and 4.3% in 2024 and 2025, respectively.
Declining Arable Land per Capita. As the world’s population grows, mainly in cities, farmland per capita decreases and more food production is needed from each acre of farmland, which requires increased yield per planted area. New arable land is available only in limited quantities and is concentrated mainly in Brazil. Therefore, the only viable path to increased crop production is through increasing yields in developing regions – mainly in China, India, Russia, Africa and Central America. This can be achieved by optimizing the use of fertilizers - especially improving the balance in the use of potash, which is underutilized versus the use of nitrogen fertilizers - together with improved water availability and better seeds.
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Grain Stock‑to‑Use Ratio. As illustrated by the chart below, from 2000 until the 2022/23 agriculture season pressure on food demand and unfavorable weather in the main growing areas resulted in low levels of the grain stock‑to‑use ratio (a metric index of the level of carryover stock). Since then, favorable weather has led to a trend of increasing yields, resulting in an increase in the grain stock-to-use ratio. An increase in the grain stock-to-use ratio generally indicates that grain prices may decline (due to higher grain supply) and vice versa.
Stocks are an important market variable, which represent inventories at a point in time, and reflect the balance between supply and demand. The stock-to-use ratio also indicates the level of carryover stock for any given commodity, as a percentage of the total demand or use. High stock-to-use ratios indicate more supply is available, generally leading to lower prices. Conversely, low stock-to-use ratios indicate a tight supply situation and higher prices.
This ratio also can be used to indicate whether current and projected stock levels are critical or plentiful. By comparing the current year's stock-to-use ratio with years when carryover stocks were below normal – as well as years when carryover stocks were above normal – will help provide an estimate as to the direction of the price trend, as well as the probable extent of price changes.
In 2023, average prices of soybean, corn and wheat decreased by 9.2%, 19.1% and 18.3%, respectively, while rice prices increased by 1.9%. Much improved crop production in 2023 weighed on grain prices in key growing areas. In Europe, renewed exports of low-cost Ukrainian wheat forced regional prices lower, while in the Americas large harvests in the USA (corn) and Brazil (soy) eased stock concerns. As such, fertilizer affordability has been eroded over the past six to twelve months.
The WASDE report, published by the USDA in January of 2024, further supports the above and showed a decrease in the expected ratio of the global grain inventories to annual consumption, to 27.7% for the 2023/24 agriculture year (projected), compared to 28.1% for the 2022/23 agriculture year, and 28.4% for the 2021/22 agriculture year.
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Specialty Agriculture
Specialty fertilizer markets are estimated to be growing at a CAGR of 6.8% from 2024 to 2030, depending on the market segment (Luclntel, 2023), which is faster than the conventional fertilizer market. Farmers use specialty fertilizers to meet the needs of specific crops, soil types and climates, to achieve more efficient and effective fertilization and to maximize yield and quality. Specialty fertilizers allow for more precise application of the critical foundations for plant development and are generally used for specialty crops (such as fruits and vegetables, greenhouses and horticulture). In recent years, usage has also expanded to larger specialty field crops. The global increase in the demand for food is expected to drive a related increase in the use of specialty fertilizers. These fertilizers include enhanced efficiency fertilizers, such as controlled release fertilizers (CRF), which allow for precision in the release of nutrients over time and delayed or slow-release fertilizers (SRF), which allow for a very slow release of nutrients (nitrogen and potassium only). Other enhanced efficiency fertilizers include liquid fertilizers, integrated in irrigation systems and in herbicides, and fully water-soluble fertilizers, which are most commonly used for fertilization by means of drip irrigation systems and foliar spraying.
The expected market growth of specialty fertilizers is supported by the following global trends:
The need for an increase in yield and crop quality
Enhanced efficiency fertilizers, which include CRFs, increase the quality and yield of crops through more efficient crop uptake of nutrients. Many specialty-fertilizer field trials in specific growing regions have already demonstrated the benefits of using new fertilizer technologies and, as a result, the enhanced efficiency fertilizers category is rapidly growing globally.
Regulatory pressure and environmental trends
Environmental regulations can impose restrictions on the level of nutrient usage. This results in a shift towards more efficient nutrient solutions, such as CRFs, water-soluble fertilizers or biostimulants.
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An example of such regulations is the EU Nitrate Directive, which sets a limit on the amount of nitrates that may be found in the water supply. Specialty fertilizers, such as CRFs, can optimize the availability of nitrogen to the crop, thereby reducing nitrate levels. To address sustainability issues, ICL introduced eqo.x, the first offering in the market to provide a CRF coating, which biodegrades more rapidly and was specifically designed to meet new EU fertilizer standards due to take effect in 2026. We believe that Eqo.x will help farmers maximize agricultural crop performance while also limiting environmental impact, by reducing nutrient loss and by increasing nutrient use efficiency (NUE). It will also allow for increased or similar yields, with reduced fertilizer rates, and can help reduce the number and amount of nitrogen applications, while providing consistent and predictable nutrient release.
New Grower Practices
Grower practices can have a substantial impact on the growth of the specialty fertilizers market. Fertigation usage is growing, and applying fertilizers via fertigation systems is much more efficient when using specialty fertilizers. Ongoing improvements in agricultural technology have resulted in an increase in the usage of drip irrigation and an increase in demand for liquid and water-soluble fertilizers.
All of the above factors are expected to contribute to an increase in long-term demand for specialty fertilizer solutions.
Competitive Strengths
Unique portfolio of mineral assets. |
Israel
Dead Sea: We benefit from access to the Dead Sea, in Israel: ICL’sone of the world’s most abundant, enduring and cost-efficient sources of potash and brominebromine. The Company’s access to these resources is based on an exclusive concession from the State of Israel for the extraction of minerals from the Dead Sea. ICL’s production facilities at the Dead Sea enjoy lower production costs, compared to underground potash mining potashoperations or bromine extracted from underground deposits or extracting bromine from less concentrated sources, owing to theresources with lower mineral concentration. The Dead Sea has a high mineral concentration and virtually unlimited supply, of minerals in the Dead Sea and owing to theICL’s unique solar evaporation production process which is less energy intensive. Furthermore, the Dead Sea’s hot and dry climate allows ICL to store outdoors very large amounts of potash (exceeding one full year of production)outdoors at a low cost. This advantage enables ICL to operate its potash facilities at full production capacity, despite periodic fluctuations in demand, and to react faster in periods of higher demand. In addition, ICL benefits from lower transportation and logistics costs compared to competitors and has a faster time to market, due to the geographic proximity of its facilities in Israel to seaports and from Israel’s geographic positioning vis‑à‑vislocation to its main geographical markets (especially- especially the fast‑rapidly‑growing markets of India, China and Brazil), reducing transportation, logistics costs and time-to-market.Brazil. While ICL benefits from these advantages, it expects to incurincurs other infrastructure‑related costs in connection with harvesting salt from Pond 5 at its Dead Sea complex, which is its central evaporation pond, to avoid5. For further information, see “Item 4 - Information on the need to continue to raise the water levelCompany— D. Property, Plant and Equipment”.
Negev Desert: We hold a unified mining concession for three sites containing phosphate open-pit mines (Rotem, Oron, and Zin) in the pond. In addition, while the supply in the Dead Sea is virtually unlimited, ICL’s access to this supplyNegev desert region of potashsouthern Israel. Currently, ICL Rotem operates two of them (Rotem and bromine pursuantOron), due to the concession is subject todiscontinuation of the need to construct a new pumping station. Moreover, ICL’s effective tax rate has risenmining activities at Zin in accordance with the Law for Taxation of Profits from Natural Resources which entered into effect on January 1, 2016, except with respect to potash sales from ICL Dead Sea where the effective date was January 1, 2017. See “Item 3 - Key Information— D. Risk Factors— Risks Related to Our Business”.
China
We also operate an open-pitopen pit mine in Haikou, (China),China, using conventional methods,, under a phosphate mining license that was issued in July 2015 by the Division of Land and Resources of the Yunnan district in China. Approximately 90%
The majority of theour phosphate rock producedproduction in China (and Israel) is used internally to manufacture phosphate fertilizers and fertilizer-grade and pure phosphoric acid, with the balance being sold to third parties. ICL’sparties. Our phosphate assets are the base for itsof our vast and diversified specialty phosphates product portfolio and are used in industrial applications, as well as food additives and specialty fertilizers. These business lines addofferings provide additional value to the commodity business and reduce ICL’sICL while reducing our exposure to the volatility in the commodity markets, thus improving the balance of our business.markets. See “Item 3 - Key Information— D. Risk Factors— Our mining operations are dependent on concessions, licenses and permits granted to us by the respective governments in the countries wherein they are located”Factors”.
The UK
We are currently the only global producer of polyhalite, a unique and organic resource used as a fertilizer that comprises potassium, sulfur, calcium and magnesium, which ICL markets under the name Polysulphate. Unlike blended or compound fertilizer, Polysulphate is available in its natural state and is mined, crushed, screened and bagged, with no additional chemical separation or other industrial processes. It is also soluble, easily absorbed and a cost-effective answer to crop nutrition, and has the lowest carbon footprint available globally.
Spain
We hold licenses to mine potash and salts from underground mines with vast resources in Spain. In 2021, we completed the consolidation of our activities into a single complex which now operates via a ramp instead of a shaft. The implementation of the ramp project, alongside the expansion of flotation capacity and other efficiency efforts, have facilitated a more consistent and reliable operation which contribute significantly to our efforts to augment production capacity and to reduce costs.
Diversification into higher value‑added specialty products |
Leading positions in markets with high |
Most of our businesses rely on natural resources, which are scarce and concentrated in the hands of a few market participants. ICL’s exclusive concessions, intellectual property – including unique knowledge, technologies and patents for various products and applications – and our world‑wide marketing and distribution network, combined with high industry start‑up costs for new market entrants, add further significant barriers to entry.
Strategically located production and logistics assets. |
Professional expertise and culture of collaboration and determination. |
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Our Strategy
Our strategy is to achieve or strengthen our leadership position in each of the business segments we operate in – either in terms of market share, value added to customers, or cost competitiveness – and to grow our businesses to create shareholder value. We do this by leveraging our unique assets, strategic locations, deep domain expertise, and profound understanding of agronomy, chemistry and customer needs, as well as by taking advantage of our access to leading global innovation and technology ecosystems. We have identified several growth engines, including:
Agriculture – We intend to build global leadership by developing and enhancing our portfolio of essential and advanced crop nutrition products, digital solutions and integrated services, enabling farmers to increase yields and provide for the ever-growing nutritional needs of the world. Our growth in agriculture is driven by innovation, investment in increasing capacity and M&A, and it is supported by the increasing demand for organic fertilizers, micronutrients, bio stimulants and other specialty fertilizer solutions, focusing on growing markets.
Food – We intend to solidify our global leadership position in food security, focusing on shelf-life, sodium reduction, textures, and reduction of food waste. We also expect to capitalize on sustainability driven food tech opportunities, such as the alternative proteins market, by focusing on food technologies and innovation, and by increasing capacity for food grade solutions. Growth will be achieved both organically and through M&A.
Industrial – We intend to strengthen our global leadership in bromine, and phosphate-based specialties solutions by focusing on long-term customer relationships and by capitalizing on new market opportunities. Growth will be supported by expanded R&D and business development activities for new and sustainable bromine, phosphate and phosphorous-based applications, as well as investment in additional capacity, including for energy storage solutions.
Our Company’s integrated business model is based on its unique access to essential minerals that support its specialty downstream activities – with the focus on crop nutrition and industrial markets. Our model creates significant operational synergies, which deriveare derived from thea combination of our attractiveunique assets and broadwide array of value‑added solutions. Over the years, we have developed a balanced portfolio that supportsto support long‑term stability and growth.
Industrial Products
ICL’s global leadership in the bromine industry is driven by our focus on delivering value to our customers rather than increasing volume. We have orchestrated a strategic plan based on two priorities: (1) Concentrating our efforts on our three core‑mineral chains (potash, phosphate and bromine) – continued streamlining and efficiency measures to ensure the competitiveness of our three core minerals. In addition, the industrial derivatives of our phosphate and bromine minerals will remain important pillars in ICL’s business and we will continue to nurture them,generate more value by leveraging our strengthsunique assets and know-how. The Company also employs targeted innovation, for the development of new applications, such as new bromine and phosphorus-based flame retardants, magnesia and salt products, as well as other solutions. ICL leverages its unique logistical advantages and unparalleled experience related to the safety and environmental aspects of its Industrial Products business.
Potash
ICL leverages its well-positioned potash assets, and unique logistical advantages, to be among the three most competitive advantages; (2) Accelerating growth of Advanced Crop Nutrition solutions – increase of revenues & profit via developingsuppliers in our key target markets, including Brazil, Europe, India, South-East Asia and China. Our cost competitiveness is driven by the Company’s lower logistics costs due to our facilities’ proximity to farmers, bringing value-added productsboth ports and services, investing in Precision Ag technologiescustomers. The Company also strives to achieve continuous optimization of its potash production processes and performing bolt-on acquisitions.
Phosphate Solutions
ICL is a significant growth engine forglobal leader in providing phosphate-based solutions to the future – leveraging our existing capabilities in the fertilizer marketindustrial, food and our leading global position in specialty solutions area. Over the past few years, we have developed a unique coating technology that enables controlled release of nutrients in a more effective way. We have also launched Polysulphate™, a unique organic fertilizer containing four key plant nutrients (sulphur, potassium, magnesium and calcium). In 2017, Polysulphate™ sales reached approximately 300 thousand tonnes and are expectedagriculture end-markets. Our strategy is to continue to grow. Polysulphate™ will be the base for growinggrow in these markets by increasing our semi-specialty business, by introducing a wide portfolio offocus on specialty phosphate solutions and other food tech solutions, based on this natural mineral. Our target is to grow salesour unique global footprint and long-term customer relationships, and by leveraging our backward integration into the phosphate resources of semi-specialty business from about $100 million to about $400 million.
Growing Solutions
ICL strives to create global leadership for Growing Solutions by enhancing its global positions in its core markets of specialty agriculture, ornamental horticulture, turf and landscaping, by targeting high growth markets such as Latin America, India and China. We leverage our unique R&D capabilities and seek M&A opportunities, as we work to expand our broad product portfolio of specialty plant nutrition products, including controlled release fertilizers (CRF), water soluble fertilizers (WSF), liquid fertilizers, slow-release fertilizers (SRF), straights (MAP/MKP/PeKacid), organic fertilizers, micronutrients, biostimulants, soil conditioners, adjuvants, seed treatment and growing media, to drive additional growth. We are also developing a service portfolio focused on creating global and regional agri-professional solutions, by leveraging digital innovation.
At ICL Boulby, the Company focuses on ramping up the production of Polysulphate and developing the market for this unique fertilizer, as the world's first and sole supplier.
Culture
ICL fosters a ’Business Culture of Leadership ' which focuses on creating a leading and sustainable work environment, with a strong commitment to all stakeholders. Culture at ICL, means 'Doing the right thing', Safety and employees well-being is the Company’s top priority and every effort is made to achieve top-tier safety results. Culture at ICL, also means operating with a clear commitment to create sustainable impact, based on UN SDG's. We strive to be an Employer of Choice by strengthening the Company’s value proposition to employees and by promoting ICL’s core values. We also foster an innovation-driven culture, which leverages our technology and know-how, to better serve our customers and increase their loyalty. To ensure we live up to our values, culture at ICL also means accountability, transparency, and top-tier corporate governance.
Innovation
As part of our strategic focus to enhance customer value through innovation, viawe are constantly reviewing our product portfolio and are focusing on creating sustainable solutions for global challenges. An internal accelerator drives internal ideation and disruptive R&D.
Capital Structure
Our growth initiatives are supported by our strong financial position. We are focused on maintaining our solid capital structure and generating funds for future growth, by preserving our financial leverage at investment grade levels and improving the growing usematurity profile of precision agriculture. In that sense we will considerour debt portfolio. The Company also strives to invest tens of millions of dollars in new technologiesoptimize capital expenditures, as well as working capital and solutions. Our target is to grow specialty fertilizers’ sales to over $1 billion in the next 5 years while expanding margins.continuously implement cost efficiencies.
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In 2023, sales of the Industrial Products segment totaled $1,227 million (including sales to other segments), a decrease of 31% compared to 2022. Sales by the Industrial Products segment constitute approximately 16% of ICL’s total sales, a decrease of 2% compared to 2022. The segment's operating income totaled $220 million, a decrease of 65% compared to 2022. The Industrial Products segment's operating income constituted approximately 19% of ICL’s adjusted operating income, an increase of 1% compared to 2022. For further information see "Item 3 – Key Information – A. Selected Financial Data – Adjusted to reported operating and net income (non-GAAP financial measures)" and “Item 5 – Financial Results and Business Overview— A. Operating Results” and Note 5 to our Audited Financial Statements.
Products
Flame retardants – bromine,Bromine, phosphorus and magnesia-basedmagnesium-based flame retardants are used in electronics, building and construction, automotive, textile and furnishing applications. Flame retardants are added to plastics, textiles and other combustible materials to inhibit, suppress,prevent or delayinhibit fire or flames and to prevent the spread of fire.
Industrial solutions – elementalElemental bromine, has a range of uses in the chemical industry, while bromine compounds and phosphorousphosphorus compounds are used in a number of industries worldwide, such as: rubber, pharmaceuticals, electricity, agro and polyester (in production of(to produce plastic fabrics and bottles). Clear brine solutionsfluids are used for balancingto balance pressure in the oil and gas drilling industry. In addition, this sub-business line includes bromine‑Bromine‑based biocides are used for treating industrial water.
Specialty minerals – specialtySpecialty minerals includes include magnesia, calcium carbonate and salt products. The main applications of magnesia products are fooddietary supplements and pharma, oil and fuel additives, catalysts and many other small applications. The calcium carbonate main applications are dietary supplements and pharma. The salts include sodium chloride, magnesium chloride and KCl which are mainly used for the food industry, oil drilling, deicing (MgCl2) and various industrial applications. Due to the uniqueness and high quality/purity of our products, most of our sales are to niche markets.markets.
The following table sets forth the principal products of ICLthe Industrial Products segment, as well as their primary applications and end‑markets:
| Sub-business line | Product | Primary Applications | Primary End‑Markets |
Flame retardants | Bromine, | Plastic, building materials and textile production | Electronics, automotive, |
| Industrial solutions | |||
| Elemental Bromine | Chemical reagent | Tire manufacturing, pharmaceuticals and agro, PTA and flame retardants | |
| Brominated and Phosphorus compounds | |||
| Pharmaceuticals and agro | |||
| Industrial service | Functional fluids, Biocides (Water treatment and disinfection), Merquel and MBr | Power plants and other industrial facilities | |
| Clear Brines | Oil and gas drillings | Oil and gas | |
| Energy storage | Brominated electrolytes, Phosphorus based active salt for electrolytes | Battery producers | |
| Magnesia Products | Pharma and | ||
| Calcium Carbonate | Supplementals and pharma | Supplementals and pharma | |
| Solid MgCl2, KCl | Deicing, food, oil drilling, pharma |
Production
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In 2017,2023, ICL produced approximately 180143 thousand tonstonnes of elemental bromine 230 thousand tonsout of bromine compounds, 80 thousand tonspotential annual maximum production capacity of phosphorus compounds, approximately 45 thousand tons of magnesia products and 330 thousand tons of Dead Sea Salts. The maximum annual capacity is approximately 280 thousand tonstonnes. Approximately 76% of the elemental bromine 430 thousand tonsproduced is used internally for the production of bromine compounds, 140 thousand tons of phosphorous compounds, 75 thousand tons of magnesia and 480 thousand tons of Dead Sea Salts.compounds.
Competition
ICL Industrial Products is the world's largest manufacturer of elemental bromine. Based on internal estimates, in 2023 ICL and its two main competitors, Albemarle and Lanxess, accounted for the majority of the worldwide production of bromine in 2017.bromine. Chinese and Indian production accounted for most of the remainder of the global production from various different sources, including, from brine produced from wells, seawater and desalinization plants. InChinese supply is decreasing mainly dueto continued depletion of brine wells,along with stricter enforcement in recent years by Chinese authorities have been gearing-up their enforcement of regulations regardingrelated to safety and ecology in the localchemical industry. In 2023, several companies announced new bromine industry. During 2017, the MEP (Ministry of Environmental Protection) performed inspectionscapacities in the province of Shandong (main Bromine production area in China). As a result of the inspections, producers are required to execute large investments in order to meet the ecological requirements. Due to these regulations, favorable conditions were developed in the Chinese bromineLaos and bromine compounds market.Djibouti.
Lanxess and Albemarle produce bromine primarily from underground brine sources in the United States.US. Albemarle also has a joint venture with a Jordanian company for the production ofto produce bromine and bromine compounds which is located on the Jordanian side of the Dead Sea, sharing the same source of raw materials with ICL. Lanxess purchases bromine and some other bromine compounds from ICLour Industrial Products segment under a long‑term contract.
The main barrier to entry into the bromine and bromine compound marketcompounds markets is access to an economically viable source of bromine havingin a sufficiently high concentration. In addition, the bromine business requires a complex logistics, system based onincluding special containers (isotanks) for transporting the bromine. The need(Isotanks) for the logistics system is a barrier to entrytransportation of competitors into the global bromine trade.bromine.
In the phosphorous‑phosphorus‑based flame retardants market, competition is mainly from Chinese manufacturers operating in thetheir local marketmarkets and in markets outside of China, mainly Europe and the United States. TheUS. Chinese manufacturers have access to a source of high‑quality, low‑cost phosphorus, which improves their capacityability to compete in this market. In 2023, ICL, LXS and PCC jointly filed an anti-dumping complaint with the European Commission against imports of tris(2-chloro-1-methylethyl) phosphate (TCPP) from China.
The Dead Sea, where our operations are many competitorslocated, contains the world’s highest bromine concentration, and our bromine compounds facility at Neot Hovav, Israel, is the largest facility worldwide. As a result, the segment benefits from relatively low production costs of elemental bromine which provides it with a competitive advantage. ICL’s complex logistics system which includes the largest fleet of Isotanks in the biocides market for water treatment. The major barrierworld allowing valuable- supply security to entry intoour customers. In addition, the market is related to the processsegment operates a worldwide marketing, sales and supply chain network, a range of obtaining approval from the regulatory authorities to supply the biocide. During 2015,high‑quality products and a new regulation (BPR Art. 95) entered into effecttechnical support system that works closely with our customers, all of which provide a goodcompetitive position in Europe permitting only holders of the biocide approvals to sell. This acted to remove Chinese producers from supplying directly to the market. ICL is a registered and approved biocide producerour target markets.
Raw Materials and Suppliers
The principal raw materials used by ICLour Industrial Products forsegment to manufacture of theits end products are bromine, chlorine,, phosphorus and magnesia. The production process also uses significant amounts of water and energy. The Companysegment produces a significant portion of its raw materials through theoperations to extract Dead Sea minerals extraction operations. minerals. For further information on the extraction operations, see “Item 4 - Information on the Company— D. Property, Plant and Equipment— Mineral Extraction and Mining Operations”Equipment”.
Bromine is produced from the end brines, (salt solutions) thatwhich are salt solutions generated as a by‑productbyproduct of the process ofpotash production of KCl from carnallite. The brine is pumped intoprocess. These brines are transported to ICL Industrial Products’ plant in Sodom, where bromine is produced in an oxidation process using chlorine.chlorine and steam.
Chlorine is produced by electrolysis of sodium chloride and as a by‑productbyproduct of the metal magnesium production process of Dead Sea Magnesium Ltd. (“Dead Sea Magnesium”). The electrolysis facility and the magnesium plant are located next to the bromine production facility in Sodom. TheAdditionally, sodium chloride usedutilized in the electrolysis process is obtained as a by‑productbyproduct of the KClpotash production in Sodom.
Elemental phosphorus (P4) is produced in a roasting process from ores, originating mainly in Central Asia (Kazakhstan), the United StatesUS, Vietnam and China. ICLThe Industrial Products segment uses elemental phosphorus to produce phosphorus compounds at its factories (mainly phosphorous-basedphosphorous based flame retardants). The basic phosphorus compound, POCl3, is manufactured in a chemical process that combines phosphorus, chlorine and oxygen. The reaction of this compound with a variety of other raw materials (such as propylene oxide)Propylene Oxide) creates the commercial phosphorus compounds.
As part of our strategy to increase our energy consumption from renewable energy sources, the Company has signed several contracts for the installation of photovoltaic ("PV") panels at its production sites, which will be gradually installed in the upcoming years.
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Sales, Marketing and Distribution
Seasonality
Natural Resources Tax in Israel
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In 2017, total2023, Potash segment sales totaled $2,182 million (including internal sales), a decrease of ICL Potash were $1,330 million and accounted for 44% of the34% compared to 2022. Total sales of the Essential MineralsPotash segment. The constituted approximately 29% of ICL's total sales, a decrease of ICL Potash in 2017 increased by $45 million or 4% compared to 2016.2022. The segment's operating income totaled $668 million, a decrease of 63% compared to 2022. The segment's total operating income constituted approximately 55% of ICL’s adjusted operating income, an increase of 3% compared to 2022. For additionalfurther information, see “Item"Item 3 – Key Information – A. Selected Financial Data" and “Item 5 - Operating Financial Results and Financial Review and Prospects—Business Overview— A. Operating Results— Results of Operations”.Results” and Note 5 to our Audited Financial Statements.
Products
Potash is the common name for potassium chloride, which isalso known as MOP- Muriate of Potash, the most common source of potassium for plants and one of the three essential nutrients for plant development, whichdevelopment. Potash assists in the protection of plants from diseasesdisease and damaging agents, helps them to adapt to different weather conditions, regulates theplant water level in the plant,levels, strengthens the plant stems, and strengthens the plant's ability to absorb nourishing substances. ICL sellsWe sell potash for direct application as a fertilizer and to compound fertilizer manufacturers.manufacturers.
We produce potash from the Dead Sea and from subterranean minesan underground mine in Spain and the United Kingdom. TheSpain. Our potash production process in Israel is based on extracting carnallite in a chemical process. Thethe extraction of carnallite, which is a compound ofcomprising potassium chloride (KCl) and magnesium chloride mixed with sodium chloride (NaCl), precipitates in some of the largest solar evaporation ponds in the world, which contain brines drawn fromworld. Subsequently, the Dead Sea. The carnallite containing salt is transferred to theICL Dead Sea plants, where a combination of chemical and physical process breaks down the carnallite crystalcrystals into potash, using two distinct parallel technologies (“hot”cold crystallization and “cold” crystallization).
In light of the present market conditions, ICL Potash is focusing on improving the efficiency of its operations and streamlining its cost structure in order to improve its competitive position in the market and to develop new, specialized products based on the main raw materials of the entire Essential Minerals segment, while utilizing the existing production facilities and sales and logistics array. Under this framework, the following actions were taken:
Production-related developments of raw materialsthe Potash business:
Israel
In 2023, the production in ICL Dead Sea was 3,819 thousand tonnes, lower by 192 thousand tonnes year-over-year, mainly due to operational challenges and market conditions.war related issues.
Spain
In 2021, ICL Iberia completed the consolidation of its activities into a single complex which now operates via a ramp instead of a shaft. The implementation of the ramp project, alongside the expansion of flotation capacity, has facilitated a more consistent and reliable operation, which contribute significantly to our efforts to augment production capacity.
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In 2021, the Company signed an agreement with the Catalan Water Agency for the construction and operation of a new collector. This initiative aims to ensure the future operation of our production sites, facilitate an increase in capacity and enhance the treatment of existing salt. Pursuant to the agreement and the Spanish Water law, it was determined that ICL Iberia would bear up to 90% of the project's cost (approximately $110 million). The construction, which is led by Generalitat de Catalonia has already begun, and is expected to extend until early 2027. The operational period is expected to be over 25 years. For further information, see Note 18 to our Audited Financial Statements.
In 2022, the Urban Master Plan was modified to allow increased piling capacity of an additional ten million tonnes of salt, enabling the piling of salt in the upcoming years until the evacuation solution by the new collector is applied.
The Company invests its best efforts in meeting with the requirement to dispose of the salt originating from the potash production process, and as part of this, during 2023 ICL Iberia signed the following commercial agreements:
In January 2023, the Company signed a long-term supply agreement to supply un-dried vacuum salt (UVS).
In February 2023, the Company signed an agreement with a local contractor for the production of rock salt intended for shipment and sale to various markets, primarily focusing on the UK and North European countries.
In March 2023, as part of the divestment agreement of Sal Vesta, the Company signed a long-term take-or-pay supply agreement with Compañía Salinera Salins Ibérica, S.L. for specialty salt products.
In 2023, the production activity was affected by geological complexities as well as by a fatal accident which occurred in March. The Company is implementing a comprehensive plan to enhance production safety at the site. This plan includes the digitalization of mine operational data, improvements in production monitoring through a centralized control room, as well as enhancements in operational processes and organizational design to ensure a safer work environment.
Competition
The potash market is characterized by a relatively small number of manufacturers, some of whichwhom export jointly. See “Item 3 - Key Information— D. Risk Factors— Our operations and sales are exposed to volatility in the supply and demand, mergers of key producers\customers\suppliers, expansion of production capacity and competition from some of the world’s largest chemical and mining companies”. The ability to compete in the potash market is dependent mainly onlargely determined by factors such as production costs, logistic costs, and logistics.logistic capabilities. Moreover, there arenew players have high entry barriers for new players due to the large investments required to establish production plants for basic mineralssignificant investment and the relatively long time required to establish these plants.potash operations. In addition, this industry requires appropriate concessions and proximity of production facilities to the mines.
ICL as part of the merger approval, on February 5, 2018 Nutrien announced, in its fourth quarter report of 2017, that on January 24, 2018, it completed the sale of its entire holdings in ICL, a total of 176,088,630 shares which constituted 13.77%, for net proceeds of $685 million. According to ICL’s best understanding, the shares were sold mainly to institutional entities in Israel and the United States.
We believe our Potash business benefits from the following competitive advantages:
| The relatively low average cost of potash production at the Dead Sea, |
Raw Materials and Suppliers
The primary utilities that we use in order to support our potash production are natural gas, steam, electricity, industrial water, and Mining Operations”.
neutralization materials.ICL Group Limited 63 |
Sales, Marketing, and Distribution
In the Indian and Chinese markets, it is customary to carry on concentratedconduct negotiations regarding the potash contracts, – part of which withpartially through commercial entities related to the governments of those countries.
In other markets, potash is usually imported by a larger number of customers, and the potash price is determined between the suppliers and the customers for shorter periods (quarterly, monthly or even for individual shipments).many customers. In these markets, the Company haswe have trade relations with most ofmajor customers.
Potash prices are determined through negotiations between manufacturers and customers. They are affected mainly by the major customers.relationship between market demand, available supply, and the outstanding inventories among suppliers and customers, as well as the customer's identity and the transaction's timing. As a result, prices for relatively long‑term contracts are not necessarily identical to "spot" prices (current sales orders).
In Sodom,March 2022, ICL signed a new long-term supply agreement with Indian Potash Limited (IPL) for 2022-2027, replacing the Company benefits from being ableprior five-year framework agreement signed in 2019. Prevailing market prices will determine the agreed selling price under the new framework agreement with India on the relevant date of supply.
In June 2023, as part of ICL’s 2022-2024 Chinese framework agreements, ICL signed contracts with its Chinese customers to store very large amountssupply 800,000 tonnes of potash, outside (exceeding one full yearwith options for additional 350,000 tonnes to be supplied during 2023, at a price of production). Due to the hot and dry climate in Sodom, potash can be stored in piles in open areas. Therefore, potash production in the production facilities in Sodom is not necessarily dependent on the rate of sales. Output that is not sold is stored in open areas within the plant in Sodom. This advantage generally affords ICL Potash greater production flexibility in Spain and the United Kingdom as well since it can sell from Europe while maintaining its main potash inventory in Sodom.$307 per tonne, which aligns with recent contract settlements.
Our Potash segment grants credit terms to its clients according to customary practices in their locations. The segment's credit sales are generally covered by trade credit risk insurance or letters of credit from banks with high credit ratings.
The Potash business transports potash from Israel and Spain as follows:
The distribution of products from Israel to overseas customers overseasis managed by ship (mainlyships, primarily in bulk) that it leases inbulk, which are leased from the market and loadsmarket. These ships are loaded using designated facilities inat the ports of Ashdod on the Mediterranean Sea and Eilat on the Red Sea. ICL Potash also hasSea.
The distribution of products from Spain to local customers and customers in France is managed by truck. Products destined for overseas destinations are transported by train and trucks from Súria to the Company's designated facilities for bulk loadinglocated at ports inthe port of Barcelona (Spain), Amsterdam (the Netherlands), Ludwigshafen (Germany) and Teesside (UK). In order to supportSubsequently, the expected operational expansion in Spain, the Companycargo is in the process of setting up a new designated facility in the Barcelona port that will replace the current facility, and is making preparationsloaded onto bulk vessels for transition to use thereof.
In 2017, the Company continued investing in instructingIsrael and Spain, short plant-to-port distances and shorter shipping routes to emerging market farmers regarding the economic advantages of optimizing the use of potash-based fertilizers. In 2017, the Company continued the “Potash for Life” project,markets give our Potash business a significant and focused particularly on India, in light of its position in this market and the low concentration of potassium fertilization in this country, and held illustrative demonstrations in ten territories and more than 42 districts in about 1,000 parcels.unique advantage over our main competitors.
Seasonality
Natural Resources Tax
Magnesium
The Potash segment also produces magnesium, through Dead Sea Magnesium Ltd. (“DSM”), the largest magnesium producer outside China and the US. The magnesium business produces, markets, and sells pure magnesium, magnesium alloys, chlorine, and dry carnallite.
Magnesium is recognized as the lightest structural metal. One of its primary characteristics is its high strength-to-weight ratio in comparison to other metals, particularly steel and aluminum. Consequently, magnesium finds extensive application in the aluminum and steel sectors, as well as in the casting of parts made from magnesium alloys, notably in the automotive industry.
Production of magnesium originates from carnallite gathered from the Dead Sea. During the electrolysis process, magnesium chloride present in the carnallite is separated into magnesium metal and chlorine gas.
Factors that can reduce production are unexpected breakdowns, special maintenance operations, non-availability of raw materials, and market conditions. The potential production capacity of our various plants is based on the hourly output of the plants, multiplied by potential hours of operation per year. This calculation assumes continuous production over the year, 24 hours a day.
The Company believes ICL Magnesium benefits fromPhosphate Solutions segment (hereinafter, the following competitive advantages: the level of cleanliness of the metal magnesium product permits use of the Company'ssegment) is based on a phosphate value chain which uses phosphate commodity products, in sensitive industries and intellectual property that permits production of products on the basis of magnesium alloys that are unique to the Company. However, relatively low magnesium prices in the market, which are impacted mainly by the prices in China, have led to non‑profitable operations in ICL Magnesium.
Sales of the Phosphate focuses on efficiency, operational excellence and profitable productsSolutions segment in 2023 totaled $2,483 million (including internal sales), a decrease of 20% compared to improve its competitive position in2022. Total sales of the market.segment constituted approximately 33% of ICL's total sales, an increase of 2% compared to 2022. Segment operating income totaled $329 million, a decrease of 58% compared to 2022. Total segment operating income constituted approximately 27% of ICL’s adjusted operating income, an increase of 5% compared to 2022.
Products
Phosphate rock contains phosphorus, one of the three essential nutrients for plant development, which directly contributes to a wide range of physiological processes in a plant, includingsuch as the production of sugars (including starch), photosynthesis and energy transfer. Phosphorus strengthens plant stems, stimulates root development, promotes flower formation and accelerates crop development. Phosphorus mayPhosphate rock can be found inutilized to produce phosphoric acid and can be sold as a raw material to other fertilizer producers. ICL's phosphate rock.rock is mined and processed from open pit mines and undergoes a beneficiation process, after which high-grade multi-purpose phosphate products are created.
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Green phosphoric acid is produced by using beneficiated rock and phosphoricsulphuric acid.
Phosphate fertilizers are produced by using green phosphoric acid or sulphuric acid, depending on the fertilizer type. The segment manufactures various types of fertilizers (PK products, GSSP, GTSP and others) for different uses.
The Segment manufactures purified phosphoric acid by purifying green phosphoric acid. Purified phosphoric acid and fertilizers and as a direct application fertilizer. The policy of ICL Phosphate is to use most of the phosphate rock it producesgreen phosphoric acid are used to manufacture downstream products. products with high added value such as phosphate salts and acids for a wide range of energy storage, food and industrial applications. Phosphate salts and acids are used in various industrial end markets such as oral care, cleaning products, paints and coatings, water treatment, asphalt modification, construction, metal treatment, energy storage solutions and others. The segment's products for the food industry include functional food ingredients and phosphate additives which provide texture and stability solutions for processed meat, meat alternatives, poultry, seafood, dairy, beverage and baked goods.
In 2017, about 20%addition, the Segment supplies purified phosphoric acid to our Growing Solutions segment, provides innovative alternative protein solutions for meat substitute products, and also produces milk proteins and whey proteins for the food ingredients industry.
The Segment owns, develops and commercializes proprietary technologies that support the production of allergen-free plant-based structured protein systems, called ROVITARIS®, targeting the fast-growth plant-based meat alternative market.
Production
The Phosphate Solutions segment has a developed production process that includes phosphate rock ICL used in its processingmining, along with production and purchase of different grades of phosphoric acid, to produce specialties products and commodities at different facilities in China was acquired from third parties.around the world.
ICL Phosphate is also developing additional downstream products based on phosphate rock, including phosphate fertilizers and acids used to produce downstream products for ICL Advanced Additives, ICL Food Specialties and ICL Specialty Fertilizers business lines.
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In 2023, the segment produced approximately 5 million tonnes of enriched phosphate rock, about 1.6 million tonnes of phosphate fertilizers, about 1.2 million tonnes of green phosphoric acid, about 291 thousand tonnes of purified phosphoric acid (as Phosphorus Pentoxide), about 231 thousand tonnes of phosphate salts and about 56 thousand tonnes of food multi-blends.
Production-related developments throughout the Phosphate Solutions segment:
Israel
In 2023, Rotem Israel delivered stable results despite challenging market conditions.
In addition, Rotem Israel achieved a production record in the Pekacid product line (10,698 tonnes).
China
YPH, an equally owned company which is controlled by ICL, improves the competitiveness and flexibility of ICL’s phosphate activities as a result of its access to phosphate rock with extensive reserves. The joint manufacturing platform includes activities over the entire value chain. The performance of YPH continued to improve in 2023 and achieved strong results.
Commencing 2021, YPH operates its new additional food-grade phosphoric acid plant, with a production capacity of 70 thousand tonnes of qualified commercial food-grade acid. This new plant strengthens our phosphate specialties operations and enables additional diversification into higher value-added products.
In addition, the Company operates a MAP 73% battery level minerals plants with an annual capacity of 130 thousand tonnes, 70 thousand tonnes of which derives from a new plant, that positions YPH as one of the dominant phosphate suppliers to the fast-growing LFP industry in Yunnan, China.
The total capacity of MAP 73% battery level minerals, together with the produced technical grade phosphoric acid and improved green phosphoric acid, creates a portfolio that positions YPH as one of the most important phosphate suppliers to the battery industry in south China.
Americas
In August 2023, ICL celebrated the groundbreaking of its battery materials manufacturing plant in St. Louis, which is expected to be the first large-scale lithium iron phosphate (LFP) facility in the US. The plant is expected to help meet growing demand from the energy storage, EV and clean-energy industries for US-produced-and-sourced essential battery materials. ICL’s investment in the plant was augmented by a $197 million grant from the US Department of Energy. In addition, ICL plans to develop a Customer Innovation and Qualification Center (CIQC) in St. Louis focused on cathode active material. The center is planned to be operational by the end of 2024, in line with the Company’s execution of its long-term plan to provide commercial solutions for the energy storage systems (ESS) market in the US.
In the first half of 2023, ICL signed a memorandum of understanding with Aleees, a Taiwanese manufacturer of lithium iron phosphate (LFP) battery cathode materials. As part of the understanding, Aleees will grant ICL with licensed technology related to LFP and will also provide the Company with technical information and support services to accelerate the development of cathode material production in the US.
Competition
Based on our in-house technology, geographical footprint and product diversification, the Phosphate Solutions segment has a leading global position in the purified phosphoric acid market and its downstream products, as well as in the food-grade phosphates markets. The segment's competitors are large and mid-sized international companies serving the chemical and food industries, which conduct manufacturing and marketing activities in various countries, as well as local companies that serve local markets.
The primary competitors of the segment in the chemical and food fields are Chemische Fabrik Budenheim KG, Innophos Inc., Prayon S.A, Nutrien, Adithya Birla, Haifa Chemicals Ltd., FOSFA and various Chinese producers.
The Phosphate Solutions segment benefits from the following competitive advantages:
An integrated value chain that uses phosphate rock mined in Israel (at Rotem Israel), as well as in China (YPH), to produce green phosphoric acid which serves mainly as a raw material to produce the segment's products and products in our Growing Solutions segment.
Logistical advantages due to the segment's geographical location and diversification, proximity to ports in Israel and Europe and relative proximity to our customers.
Our ability as a global fertilizer producer to combine potash and phosphate fertilizers in the same shipment, which enables us to service smaller customers, particularly in Brazil and the US.
YPH provides an integrative phosphate platform in China |
The segment has a diversity of integrated solutions which were designed specifically to match the customer's unique needs.
Highly qualified R&D capabilities and existing know-how that facilitate delivering products in areas of global megatrends (e.g. in the energy storage market).
Raw Materials and Suppliers
The Phosphate Solutions segment produces most of the raw materials it uses to manufacture its commodities and specialties products.
The segment mines phosphate that isrock as the primary raw material it uses infor its backward integrated value chain, commencing from the manufacturing process,mining of phosphate rock through its mining operations in Israelthe production of green phosphoric acid and China, as discussed further below. For further information onup to the Company's mining operations, see “Item 4 - Information on the Company— D. Property, Plantproduction of phosphate-based fertilizers, purified phosphoric acid and Equipment— Mineral Extraction and Mining Operations”.specialty phosphates.
The primary raw materials acquired from external sources are mainly sulphur, ammonia, lower grades of phosphoric acid, soda ash, caustic soda and ammonia. potassium hydroxide.
The Company holdsPhosphate Solutions segment maintains inventories of sulphur,, phosphate ammoniarock, green phosphoric acid, purified phosphoric acid and other raw materials in quantities that take into account theconsideration projected levellevels of production based on consumption characteristics, supply dates,timeline, distance from suppliers and other logistical considerations.
For the dairy protein business, especially in the organic and goat segments, securing high-quality raw materials (whole milk, skimmed milk and whey) is a key element of operations. A balance between short- and long-term agreements secures supply, while maintaining adaptability to $83.9 per tonne in 2016. For additional information, see “Item 5 - Operating and Financial Review and Prospects— A. Operating Results”.
Sales, Marketing and Distribution
Most of the segment's sales do not result from long-term orders or contracts but are regularly ordered near to the time of supply. Therefore, there is no significant order backlog.
The segment transports its commodity and acids products from Israel to customers overseas by bulk vessels that it charters in the global marine transportation market. These vessels are loaded at designated facilities in the ports of Ashdod on the Mediterranean Sea and Eilat on the Red Sea. The segment also operates special port facilities for bulk loading in the Netherlands and in Germany. YPH sells most of its products in China and provides a logistical solution for marine shipping outside of China as well.
The prices of phosphate-based fertilizers are determined by negotiations between manufacturers and customers and are affected mainly by supply availability compared to market demand (which is also indirectly influenced by crop prices), as well as the identity of the customer and the duration of the agreement. Prices for relatively long-term contracts are not the same as “spot” prices (current/casual sales transactions).
Most sales of phosphate specialties products are made under agreements with terms of one or two years, or through “spot” orders placed close to the date of supply. For these products, framework agreements exist with specific customers through which customers may purchase up to the maximum agreed quantities of products during the term.
For purposes of effective marketing and sale of many of the segment's products, especially food products, technical sales and applications, the segment's personnel work closely with customers to tailor products to their needs.
The segment maintains adequate inventories of phosphate specialties products to ensure orderly supply to customers, considering the customers’ distance from the manufacturing locations and their demand for inventory availability, in conjunction with optimization of inventory storage costs. Therefore, some finished product inventories are stored in destination countries.
Seasonality
The seasonal nature of demand for ICL Phosphate’sphosphate commodities products is usually characterized by higher sales induring the second and third quarters than sales inquarter of the first and fourth quarters.year. In recent years,2023, seasonality has been more pronounced due to various influences ona shift towards "just-in-time" purchasing. This trend has been driven by the timingeasing of sales, primarily price fluctuations,global supply chain congestion (as the effects of seasonality have been reduced as comparedthe Covid-19 pandemic pass) and the increased cost of capital due to earlier periods.higher interest rates.
The target markets of phosphate specialties products are not characterized by significant seasonality.
Natural Resources Tax
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In 2023 the sales of the Growing Solutions segment totaled $2,073 million (including sales to other segments), a decrease of 14% compared to 2022. The sales of the Growing Solutions segment constituted approximately 28% of ICL's total sales, 4% higher than 2022. The segment's operating income totaled $51 million, a decrease of 87% compared to 2022. The Growing Solutions segment’s operating income constituted approximately 4% of ICL’s adjusted operating income, a decrease of 7% compared to 2022. For further information, see "Item 3 – Key Information – A. Selected Financial Data – Adjusted to reported operating and net income (non-GAAP financial measures)" and “Item 5 - Financial Results and Business Overview— A. Operating Results” and Note 5 to our Audited Financial Statements.
Specialty fertilizers offer improved value to the grower compared to the use of regularother fertilizers as they are more efficient, maximize yield and quality and require lower labor costs. The following pyramid below presents theour different fertilizer product lines – the high‑lines. High value products are usually accompanied by a higher price per metric ton and lower consumption. ICL Specialty Fertilizerstonne. ICL's Growing Solutions segment produces most of the high valueICL's high-value products, except for potassium nitrate and calcium nitrate.
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Specialty Agriculture
This market includes high-value agricultural crops, such as fruits and vegetables. Enhanced efficiency fertilizers along with soluble fertilizer products are used and applied mainly into these crops. The use of specialty fertilizers in row crops, such as sugar cane, corn, and wheat can also be beneficial – subject to climate and soil conditions. TheOne of the main marketmarkets for ICL Specialty Fertilizers is related to the drip irrigation/fertigation market. This market, is growing as the use of drip irrigation systems is growingincreases across the globe.globe, mainly in emerging markets such as China, the US and India. The use of enhanced efficiency fertilizers, such as controlled release fertilizers, is also growing due to their environmental and economic advantages, although such growth is still dependent on thecrop price levels and raw-material prices. In Brazil, the adoption rate of micronutrients, bio-stimulants, and soil conditioners is growing for a wide range of crops due to rising demand to increase productivity, improve and balance plant nutrition and reduce abiotic stress.
FertilizerpluS
FertilizerpluS is ICL's premium fertilizers line, based mainly on polyhalite (marketed by the Company as Polysulphate®). Our FertilizerpluS products encompass a range of compounds including potassium, phosphorus, sulphur, magnesium, and calcium. These products are customized to suit different soil types and a wide range of crops aiming to augment crop value by improving yields and increasing fertilizer uptake. See below a list of products that are included in the FertilizerpluS line.
Polyhalite is a mineral exclusively mined by ICL in an underground mine (ICL Boulby) located in North Yorkshire in the UK and is marketed under the brand name Polysulphate®. Polysulphate® is used in its natural form as a fully soluble and natural fertilizer, which is also used for organic agriculture and as a raw material to produce fertilizers. Polysulphate® is composed of potash (K2O 14%), sulphur (SO3 48%), calcium (CaO 17%), and magnesium (MgO 6%), which are essential components for the improvement of crops and raw-material prices (e.g. urea, potassiumagricultural products. Polysulphate® is the basis for our Company's FertilizerpluS products.
The Company considers Polysulphate® a unique product for ICL, synergistic with our other raw materials for the purpose of developing downstream products. We are expanding the Polysulphate® market via development of a wide variety of innovative Polysulphate®-based products.
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We believe that our FertilizerpluS product line benefits from the following competitive advantages:
Market position: currently, we are the sole producer of Polysulphate® worldwide.
Our ability to increase production at a relatively low capital expenditure.
Worldwide production capabilities: ICL Growing Solutions' principal production facilities include plants in Israel (soluble compound fertilizers, liquid fertilizers, and phosphorous)soluble NPK fertilizers), Spain (liquid fertilizers, and soluble NPK fertilizers), the UK (Polysulphate, PotashpluS, products for water conservation and peat incorporated in growing media), China (soluble compound fertilizers and soluble NPK fertilizers), the Netherlands (controlled‑release fertilizers and fertilizer blends), Belgium (soluble NPK fertilizers), the US (controlled‑release fertilizers) and Brazil (liquid fertilizers, water-soluble fertilizers, controlled-release fertilizers, improved efficiency phosphorus fertilizers, secondary nutrients fertilizers, and micronutrients fertilizers).
Turf & Ornamental Horticulture (T&O)
Ornamental Horticulture
The Ornamental Horticulture market consistsis composed of growers oftwo primary divisions: outdoor ornamental plants (nurseries)plant growers, known as nurseries, and producers of pot and bedding plants (greenhouses).operated within greenhouses facilities. The growers require high quality fertilization programs to grow plants at the quality level required by the garden centers, DIY (Do‑It‑(Do It Yourself) outlets and retail chains. ICL Specialty FertilizersThe growing solutions segment has a large, specialized sales force in the field, advisingthat advises growers with respect toon the optimal nutrition of the plants. ICL Specialty FertilizersIt also has a specialized distributor network in the Ornamental Horticulture market, and itsmarket. The segment’s main product lines for this market are specialty fertilizers such as CRFs (controlled release fertilizers) and WSFs (water soluble fertilizers) with well-known brand names such as Osmocote,, Peters &and Universol. In specific markets, such as North America and the UK, a range of unique plant protection products is also included in the proposalsrecommendations for growing healthy plants. In the UK, ICL iswe are a leading companygrowing media supplier providing a totalcomplete solution for the ornamental growers as it produces and markets unique, high-quality peat and growing media products.growers.
Turf & Landscape
The professional turf market includes the following user groups: golf course green keepers, sport fields grounds men,field groundsmen, landscapers, contractors and contractors.lawn service providers.
These groups demand high-quality inputs to secure strong, high-quality turf. The usersThey also require an integrated approach for preparing theto keep turf strong and maintainingmaintain its health, without creating an environment that is conducive to the development of disease. There is a socialan environmental need to limit the inputs and, therefore,which requires an integrated approach of unique, high-quality products is needed.products. The most important inputs are (specialty)specialty, controlled release and slow-release, fertilizers, grass seeds, water conservation - and plant protection products. ICLSome of these products’ well-known brands are Greenmaster, Sierrablen, Sierraform and ProTurf. Recently, the segment launched a new brand of organic fertilizers named Gronamic. The segment offers all three product lines in its proposals. ICL hasan integrated program and maintains a dedicated and experienced team of unique professional grass experts, along with an excellenta specialized distribution network serving its key markets,, mainly in Europe and Asia.
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Products
‘Straight fertilizers’ are crystalline, free‑flowing and high purity phosphorus and potassium soluble fertilizers such as MKP, MAP and PeKacid. Our key brands include NovaPeak, Nova PeKacid & NovaMAP. PeKacid is a patented product of ICL. It is the only solid, highly acidifying, water-soluble fertigation product that contains both phosphorus and potassium. The product is ideal for hard water conditions where an acidifying effect is required, as well as for keeping dripping lines clean.
Liquid fertilizers are used for intensive agriculture and are integrated in irrigation systems (mainly drip systems). Our product line includes mostly tailor‑made formulations designed for specific soil & water/climate conditions and crop needs.
Peat is a growing medium for various crops |
Water conservation and soil conditioning products are new product lines developed by the segment. Water conservation products are used in professional turf to keep water in the root-zone. Our key brands are H2Flo and H2Pro. These products improve water use efficiency. This new technology is also used in agriculture to allow better water availability around the root-zone of crops.
Bio-stimulants technologies, such as Triplus, Improver, Concorde, Vegetação and Dimi Tônicoare, are being successfully used by farmers to increase their productivity and alleviate abiotic stress, such as drought, salinity, and others.
Adjuvants are essential to enhance foliar nutrition, herbicides and crop protection spray. We offer the South American market adjuvant technologies, including Helper, Tensor Max and AD+ as well as various formulations that address the primary challenges facing farmers, such as drift and run off.
Our Polysulphate® and Polysulphate®-based fertilizers, customized to meet the needs of different crops and soil types, maximize yields and allow more precise and efficient applications.
Polysulphate® contributes to and |
Following are several examples of Polysulphate®-based products and additional products that are included in the FertilizerpluS line:
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Production
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The segment's annual potential production capacity is approximately 300360 thousand tonnes of soluble fertilizers, (including YPH JV’s production capacity), 450800 thousand tonnes of phosphate, 540 thousand tonnes of liquid fertilizers, 110200 thousand tonnes of controlled‑controlled release fertilizers, 400 thousand m3 of growing media and 400220 thousand tonnes of peat.micronutrients. The potential production capacity of our various plants is based on the hourly output of the plants, multiplied by potential hours of operation per year. This calculation assumes continuous production over the year, 24 hours a day, with the exception ofother than a few days for planned maintenance and renovations. Actual production is usually lower than potential production capacity, due to unexpected breakdowns,unplanned downtime, special maintenance operations, lack of availability of raw materials, market conditions and seasonality in demand.
In 2023, we produced about 1,009 thousand tonnes of Polysulphate®, an annual production record. The current annual potential production capacity of Polysulphate® is above one million tonnes.
In 2023, YPH began to produce high grade bio stimulative liquid fertilizers. This line of products incorporates organic and chemical compositions with high end raw materials such as: Fulvic acids, amino acids, and other exclusive materials. YPH’s new liquid fertilizers are a significant upgrade to its product portfolio and solidifying the Company’s position as a leading producer in China’s specialty fertilizers market.
Competition
The Specialty Fertilizers’global specialty fertilizer market size is estimated at approximately USD $8–9$15 billion per year, accounting for about 4-6%4% of the total fertilizers market. According to the Company's estimation, the specialty fertilizer market andis growing at aan average rate of 4–about 5%-7% per year.
The Specialty Fertilizersspecialty fertilizers market is diversified, with a few global companies and many small to medium-size regional and local producers. The market operates mainly on a local basis and most producers sell their products in nearby territories rather than globally. ICL Specialty Fertilizers may beWe are considered one of the largest global players in the specialty fertilizers market, with production plants in Brazil, Israel, the Netherlands, Belgium, Spain, the UK, the USAUS and China.
The Capex needed forto develop new production capacities for existing specialty fertilizer companies is generally not considered highsignificant compared to the commodity fertilizers market. Nevertheless,fertilizer operations. However, barriers of entry for new players include, among others, extensive know-how in order for a new player to enter this market with different product groups, extensive knowledge is needed – both of chemical production and of agronomical know-how,agronomy, professional selling and marketing teams, customer support capabilities, as well as customer support capabilities.registration and regulatory requirements.
In addition to ICL, Specialty Fertilizers focusesother specialty fertilizers companies with a global presence include: Nutrien Ltd, Wesfarmers Ltd, Industries Qatar QPSC, and reliesSociedad Quimica y Minera. Other companies, such as Pursell, Simplot, Nutrien and Koch (USA), Kingenta and Moith (China) and JCAM (Japan) are considered regional players.
ICL Growing Solutions' business benefits from the following competitive advantages:
A strong, efficient and integrated supply chain with in-house access to high quality raw materials, mostly phosphate and potash, which is based on a worldwide experienced R&D team, allowing it to stay significantly ahead of the competition in many of the specialty-fertilizers product lines, especially in the controlled-release, water soluble and liquid fertilizers markets. ICL Specialty Fertilizers provides high-level professional support to customers by means of experienced and professional marketing and agronomist teams with strong customer relationships that have been developed over decades of service, and through the offer of an extensive product portfolio.portfolio and multi-location production.
Unique R&D and product development capabilities, creating a strong platform for future growth in controlled-release fertilizers, fertigation, foliar soluble fertilizers, bio-stimulants, water efficiency and innovative, next generation products.
Added value production process technology – custom-made formulations that meet our customers’ unique needs.
Raw Materials and Suppliers
The segment endeavors to hold inventories of raw materials in quantities that take into consideration projected levels of production, consumption levels, supply timelines, distance from suppliers and other logistical considerations.
Sales, Marketing and Distribution
The primary markets of the Specialty Fertilizers business line are Europe, Israel, the USA,particularly Spain, Brazil, China, the Far East, AustraliaUS, the UK, India, Israel and Brazil.Australia. The Specialty Fertilizers business line sells its fertilizer products primarily via a network of its own sales offices as well as sales agents throughoutthrough distributors around the world.
In general, theour business model reliesis based on brand-name, premium specialty products which are marketed by a strong agronomist sales network at the end‑end user level, while sales are invoiced through distributor-partners which oftenthat distribute the products exclusively or semi-exclusively.products. The technical sales force emphasizes the agronomic advantages of the specialty products to the end users (farmers, growers of containerized plants, golf courses, etc.) and provides advice to and training of distributor sales representativesrepresentatives. Growing Solution segment also has specialized field forces for the Agriculture, Ornamental Horticulture and end users.Turf & Landscape markets supported by specialized marketing teams.
The Growing Solutions segment grants credit terms to its customers according to customary practices in their respective locations. The segment's credit sales are generally covered by trade credit risk insurance or letters of credit from banks with high credit ratings.
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Seasonality
The stronger sales season for Specialty Fertilizersutilization and applications of specialty fertilizers are aligned with the main growing seasons of specialty crops worldwide. Seasonality in the specialty fertilizers business is primarily influenced by geographical location and crop type. While the majority of our specialty fertilizer business serves markets in the northern hemisphere, with demand concentrated in the first half of the year. The use and applicationyear, our acquisitions of specialty fertilizers assets in Brazil, have shifted this balance. In Brazil, demand is mostly concentrated in the second half of the fertilizers is related toyear, thus mitigating the main growing seasons of the specialty crops around the globe. The main factors impacting seasonality are geographical location, type of crop, product and market. The key markets for ICL Specialty Fertilizers are locatedpreviously observed in the northern hemisphere: the USA and Europe, particularly Spain and Israel.segment's business.
Additional Activities
For further information please see "Item 5 – Financial Results and Business Overview– C. Research and Development, Intellectual Property and Licenses, etc.".
Social Investment
We focus our efforts in three main areas: (1) promoting STEM education (science, technology, engineering and mathematics) and encouraging innovation and excellence in the education system; (2) supporting the communities in which we operate, and responding to their individual needs, while facilitating the empowerment of local residents and encouraging innovation and social entrepreneurship; and (3) promoting food security through a variety of means, products and activities, including supporting local farmers, encouraging sustainable urban agriculture, and supporting local food banks. In addition, ICL works to assist in crisis situations and disasters among the local communities in which it operates.
Each of our social investment activities is reviewed by the relevant authorized parties within our organization, according to the type and amount of the donation, includingdonation.
Core Projects
We promote the Environment, Safetyformation, establishment, and Public Affairs Committee anddevelopment of social flagship projects in the Board of Directors.various countries in which we operate.
"Thinking Doing" is our social flagship program in Israel, operating in nine local municipalities: Dimona, Yeruham, Beer Sheva, Arad, Ramat Negev Regional Council, Kaseifa, Mitzpe Ramon, Megilot and the Tamar Regional Council. The program empowers community activities by developing local entrepreneurship and leadership among the residents, local social organizations and local municipalities' employees. In addition, the program encourages social entrepreneurship and cooperation to create sustainable communities in the Negev through the establishment and development of anchor institutions.
ICL focuses its cooperationparticipates in the "Password for Every Student" program in Israel, a project that provides a comprehensive, consistent solution for the education system, beginning with the teacher and the student, and extending to the classroom, while creating e-communities. ICL's support enables 15,000 students in Israel, mostly from the Negev region, to enjoy digital accessibility. In 2023, ICL developed unique joint programs, including the continued expansion of the digital empowerment center for women and girls from the Bedouin sector in Kaseifa, alongside another project for the establishment of online pedagogical infrastructures, teaching tools and accessibility of class materials in children's hospitals in Israel.
"Lab 0_6" is ICL's social flagship project in Spain. Working in collaboration with Manresa University, the project makes curiosity and scientific education accessible from an early age to residents of the Bages county near Barcelona, while sharing and developing pedagogical programs, training teachers, and mobilizing the community to participate in various activities.
Development of local flagship projects - In 2023, ICL emphasized the development and its involvement onexpansion of local flagship projects in the communities in and outsidecountries where most of Israel from which its employees comelive. Flagship projects were promoted in the US, the Netherlands, Germany and within which it operates. ICL's main activities are in communities in Israel's southern region, namely: Dimona, Yerucham, Beer Sheva,Brazil, and the Bedouin settlementsCompany will work to establish and expand these projects in the South.coming years.
Turkey and Syria earthquake disaster – On February 6, 2023, a powerful earthquake occurred in Turkey and Syria. As a result, tens of thousands of people were killed, over a hundred thousand people were injured and hundreds of thousands were left homeless. ICL focusesrallied to provide immediate help and dispatched ICL-IL’s DSW search and rescue team to join rescue efforts. ICL offered humanitarian aid to the survivors by way of donations of equipment, food and medicines as well as monetary donations.
Security situation in Israel (War in Gaza) – On October 7, 2023, the Israeli government declared a state of war following an attack on civilians at its activities on life sustenance areas (e.g.,southern border. The Gaza Envelopment residents and Northern frontier residents were evacuated from their homes, and a massive military reserve mobilization was carried out. ICL immediately responded to provide aid to evacuees and special population groups, through a variety of means including financial donations, donation for equipment, and employee volunteerism, all while assisting IDF reservists and responding to the society, economyneeds of the security forces. We have also taken action to support the Israeli medical and environment), educationmental health systems and excellenceto provide assistance to the various needs of studentsour employees and their families, including 15% of our workforce in Israel who were mobilized for military service. Total donations made as part of ICL's special aid in the science area (with emphasiswar amounts to $2 million.
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The Moshe Novomieski Potash Company Heritage Site Visitor Center in the Dead Sea, Israel
The Moshe Novomieski Potash Company Heritage and Visitor Center opened to the public in 2021. The Center is located at the old workers’ compound in Sodom and focuses on chemistry), strengtheningthree main topics: the unique geological conditions that led to the formation of the local communities through performance of various social projects forDead Sea; the benefithistory of the local residentsfounding of the Eretz-Israeli Potash Company in pre-state Israel; and supportICL’s current activities. The Center was established and is operated in collaboration with the Council for Preservation of under‑privileged populationsHeritage Sites in Israel, the Jerusalem and those having special needs.Heritage Ministry, Israel’s Ministry of Education, and others.
Environmental, Health and Safety Matters
Our Company is committed to creating impactful solutions for humanity’s sustainability challenges, by leveraging our unique resources and technological ingenuity. We have adopted the UN’s Sustainable Development Goals as our guiding principles and most of our products and services enhance global food security, industrial efficiency and safety.
ICL is aligning its strategic planning to capitalize on material business opportunities pertaining to sustainability, as well as to assess and prepare for sustainability-related risks. Food security is a major global concern, with climate-change increasing the stress on agriculture and food supply chains. A significant portion of ICL’s products and services enhance global food security. Our products include key minerals, next generation fertilizers, specialty phosphate food solutions, digital farming/AgTech solutions for precision agriculture, plant-based proteins and other products required for global food security. Opportunities for ICL also include energy storage solutions (ESS), necessary for the transition to renewable energy and e-mobility.
We are committed to developing and implementing a comprehensive Environmental, Social and Governance (ESG) strategy by integrating responsible and sustainable considerations in the conduct of our business activities, including in the manufacture and sale of our products. Our goals and targets call for an increase in our energy efficiency and in the use of renewable energy, reducing our carbon footprint, managing our raw material uses, and minimizing our air emissions, water consumption and wastewater output. We aim to increase our re-use of materials and to recycle hazardous and non-hazardous wastes. We also intend to continue implementing life-cycle analysis processes, as well as integrating ecological considerations in our mining reclamation activities. Our goals include reducing our greenhouse gas emissions, increasing our use of renewable energy, reducing our water consumption while promoting Circular Economy activities, promoting personal environmental responsibility on the part of our employees, and supporting communities in which we operate, including through volunteerism by our employees. ICL also aims to achieve and maintain leading positions in ESG rankings and indices, as well as to increase transparency and develop an open dialogue with our stakeholders.
Our Company acts proactively to prevent environmental incidents through comprehensive risk management, knowledge sharing and effective maintenance, as well as by developing, implementing, and maintaining appropriate management systems. We consider safety and health performance as core values, and make every effort to achieve top tier safety results. We are bound by multiple environmental and safety requirements. Those include, among others, requirements related to climate change, energy efficiency, air quality, liquid and solid waste discharge, land reclamation, hazardous substances and products. Furthermore, we are required to obtain certain environmental permits and licenses, such as air emission permits and waste discharge permits, all of which aim to protect the health and safety of people and the environment. To conduct our operations, we must comply with the requirements and conditions of these permits and licenses, and to remedy any discrepancies should we deviate from them.
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Beyond existing environmental, health, and safety requirements which have evolved over time and become more stringent, we may be subject to new requirements. This may pose a challenge and present uncertainties regarding our ability to comply with them and may impact the capital expenditures and operating costs of our Company. Complying with such requirements may require the adjustment our facilities, production processes and operations. In addition, these potential new requirements may oblige us to obtain new permits and licenses for our continued operations. As a result, we strive to monitor the development of any environmental, health, and safety requirements and to evaluate them with respect to their potential impact on our operations.
We are working to increase the number of our suppliers who conduct sustainability assessments through the Together for Sustainability (TfS) initiative. We are also committed to acting ethically and treating our stakeholders fairly. In addition, we aim to maintain transparent communications with regulatory authorities and to engage with the communities in which we operate. Our Company contributes to initiatives in those communities and is committed to fostering social values with our various stakeholders. In addition, we seek to be proactive in our efforts to create a diverse and inclusive workforce (for further information, see “Item 6 – Directors, Senior Management and Employees – D. Human Capital - Promoting Diversity, Inclusion & Belonging (DIB)”)
ICL’s President and CEO, Mr. Raviv Zoller, serves as the active Vice Chairman of the International Fertilizer Association (IFA) and Chairman of its Finance Committee. With our support, we believe that additional members of the IFA organization will join the TfS initiative.
We continue our journey to enhance our understanding and preparedness regarding climate related risks and opportunities. This is the third year in which we voluntarily disclosed information according to The Climate-related Financial Disclosures (TCFD) framework, and we intend to continue to advance our relevant knowledge and develop this disclosure in future years. For further information, see “Item 4 – Information on The Company – B. Business Overview – Task Force on Climate-related Financial Disclosures (TCFD)" below.
We strive to establish a culture of sustainability within ICL. To accelerate learning and advancement, we participate in multiple sustainability rankings. We leverage the feedback we receive to gain insights and create improvements and paths for best practices. Among these are programs such as Maala and Entropy, from whom ICL has received very high scores, as well as CDP Climate Change (ranked -A) and CDP Water (ranked B), the Bloomberg Gender-Equality Index (GEI) and EcoVadis, in which ICL scored 75 points and was ranked in the top 5%, MSCI (improved rank of BBB) and Sustainalytics (ranked 30.5). We are also committed to the United Nations Global Compact initiative.
In addition, ICL Iberia – Suria was awarded the IFA’s Green Leaf Award, recognizing environmental excellence for its underground mining. In China, YPH was awarded the Green Mine certification (Ranked AAAAA) for their excellence in mine planning, operations and mine remediation. ICL’s US facilities were recognized by the American Chemistry Council for Safety Performance and several facilities were awarded Certificates of Excellence and Certificate of Achievement. ICL has received recognition for safety excellence and won the prestigious Verdantixs global competition award for Innovation, Excellence and Improving EHS performance in the fields of safety and social impact.
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We continuously invest in capital projects towards environmental protection, health and safety and in their proactive management. In 2023, we invested approximately $175 million on environmental related projects, $87 million of which was allocated to investments in property, plants and equipment. Over the next few years, we intend to invest additional significant capital to further reduce our air emissions, treat hazardous materials and reduce our overall negative environmental impact. This will include investments that are required to comply with the Israeli Clean Air Law, European environmental regulations, and other regional environmental regulations. We estimate that in 2024 we will allocate approximately $174 million for environment-related purposes. For further information, see “Item 3 - Key Information— D. Risk Factors".
For further details regarding our ESG practices and performance, see “ICL Corporate Responsibility Report 2022” in our current Report on Form 6-K (File no. 001-13742) furnished to the SEC on June 8, 2023. Our Corporate Responsibility web-report is made publicly available on our website at www.icl-group.com. Neither the 6-K report nor our website have been incorporated into this Annual Report, and the reference to our website is intended to be an inactive textual reference. The information found on, or accessible through our website is not intended to be a part of this Annual Report.
Sustainability
Sustainable Solutions
ICL focuses on developing sustainable solutions that increase ICL’s positive global impact through its existing and new products. The sustainable solutions that we offer are interlinked with the challenges that humanity faces. In an era defined by a growing global population and escalating environmental challenges, the imperative of ensuring food security (SDG 2 - Zero Hunger) has taken center stage. In addition, we are focused on developing energy storage solutions which are necessary to advance the use of renewable energy in the global economy (Affordable and Clean Energy – SDG 7). Due to the growing impact of climate change, we are also increasing our efforts to reduce our GHG emissions (Climate Action - SDG 13). Our Research Development and Innovation department (RD&I) has adopted the UN Sustainable Development Goals (SDGs) as guiding principles in its RD&I activities.
As part of our commitment to sustainable development, we combine environmental, health and safety criteria with commercial and operational considerations when developing new products. Potential products are tested using an internal Sustainability Index for product development. We have also developed a data-driven Impact Assessment Tool for all our RD&I projects to support our efforts to tackle climate change, enhance food security, develop sustainable agriculture, and improve human health, safety and wellbeing in general. This strategic component is part of our product development process to create a positive impact. In addition, we are also implementing Circular Economy concepts as part of our efforts to reduce our environmental impact.
As an essential player in the global food supply chain, our goal is to contribute to the effort of achieving Zero Hunger (SDG 2). Based on research conducted by an external firm, it is assessed that ICL's products contribute to the enhancement of global food security of about 5% of the world’s population, or approximately 400 million people daily. Our fertilizer production alone has led to a remarkable increase in agricultural output, yielding approximately 70 million tonnes, equivalent to about 190 billion meals annually and meeting the caloric needs of around 182 million people every day. Simultaneously, our phosphates products have improved the quality and longevity of 43 million tonnes of food, equivalent to about 230 billion meals annually, meeting the caloric needs of 210 million people every day.
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The fertilizer industry helps to overcome agricultural challenges by facilitating increased crop yields on existing agricultural land and preventing excess conversion of natural habitats into agricultural land. To enhance global food security, our Company offers a broad variety of solutions to farmers, including commodity fertilizers, controlled release fertilizers (CRF), bio-stimulants, organic fertilizers, digital farming/agricultural technology (ag-tech) solutions, plant-based proteins and more.
Our products enable growers to enhance their yields and improve their crop quality, while increasing their nutrient use efficiency and reducing their water consumption. By offering more sustainable alternatives, we contribute to the reduction of carbon intensity across the food supply value chain (Climate Action -SDG 13). Our Growing Solutions segment is developing biological bio-stimulants that stimulate plant growth and support plants in stress conditions. Bioz, ICL's biostimulants line is crafted to maximize crop potential and foster sustainable agriculture. Mitigating challenges from heat, drought, or diseases, Bioz stimulates soil activity, improves nutrient availability, and reduces stress for enhanced nutrient uptake. Our Growing Solutions segment also helps farmers protect the environment by minimizing their crops' losses of nutrients through leaching and volatilization, and by enabling farmers to make data-driven decisions through precision agriculture. Our Bioz Keep Green is the first biofertilizer to protect coffee tree leaves from excessive solar radiation. It is designed to boost chlorophyll content, improve stomatal control, and enhance sunlight utilization, thereby amplifying photosynthesis and minimizing damage from solar radiation. This results in greener plants and increased yields. ICL also offers organic fertilizers such as Polysulphate, a cutting-edge natural fertilizer, which contains sulfur, potassium, magnesium, and calcium for comprehensive crop nutrition, and Nova QuicK-Mg, an organic blend of potassium and magnesium, which is ideal for magnesium-deficient tropical soils. In addition, in early 2024, we completed the acquisition of Nitro 1000, a Brazilian manufacturer, developer and provider of biological crop inputs. Nitro 1000’s products replace or optimize the use of fertilizers. For further information, see Note 8 to our Audited Financial Statements.
Efficient water conservation products are used to keep water in the root-zone of crops and turf through novel technology. Our key brands, H2Flo and H2Pro, significantly reduce traditional irrigation requirements. We also produce a specialized solution, Nova Complex Optima, a nitrification inhibitor (DMPP) that prevents groundwater contamination and mitigates the risk of nitrate leaching. This innovative product, tailored to crop nutritional needs, contributes to sustainable agriculture by slowing ammonium-to-nitrate conversion, preventing nitrogen runoff and enhancing soil fertility (Clean water and sanitation – SDG 6). Additionally, Nova Complex Optima reduces nitrous oxide production. Eqo.x, our ground-breaking biodegradable coated Controlled Release Fertilizer (CRF) for open-field agriculture, optimizes crop performance with a specialized coating. Achieving up to an 80% increase in Nutrient Use Efficiency (NUE), eqo.x advances precision agriculture, providing higher or comparable yields with reduced fertilizer rates. It's the first fertilizer to offer a rapidly biodegrading coating for urea, aligning with upcoming European standards and supporting sustainable farming practices. An additional product designed to support sustainable practices in farming is pHix-up, a solution that rapidly neutralizes post-feeding rumen acidity and helps to balance pH levels in cattle, which is crucial for their health. This solution, beyond basic pH control, also boosts milk production and enhances milk composition.
ICL is committed to innovation in agriculture and food production and is working with startups and other partners to develop new solutions that can help produce more food using fewer resources, while reducing the environmental impact of food production. ICL’s innovation incubator is engaged in identifying startups in the FoodTech and AgTech industries that can bring real change to the world. Through its global presence and existing assets, ICL can help startups achieve their goals and boost their sustainability efforts.
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Agmatix, an essential player within ICL's ag tech digital solutions, is an agroinformatics company committed to revolutionizing agriculture through data-driven innovation. The platform is designed to standardize agronomic data and provides actionable insights that empower agricultural professionals to optimize their field trial research and crop nutrition. Agmatix is currently collaborating with NASA Harvest to develop a scalable sustainability index using ground sampling and remote sensing data to evaluate the impact of conservation practices at the field level. The index guides stakeholders in optimizing carbon outputs and promoting global resilient agriculture.
GROWERS is another innovator within ICL's digital solutions in the field of process and data-driven farming. GROWERS is reshaping agriculture by democratizing advanced technology for every farmer, advisor and buyer. Through their pioneering platform, GROWERS establishes a seamless connection between farmers and agricultural retailers, granting autonomy and options while maintaining links with trusted retailers.
Through our Digital Ag solutions, we offer farmers a Plant Nutrition Carbon Footprint Optimization tool that allows them to compare nutrition plans and consider the trade-offs between yields and environmental impact. The system calculates their Carbon Footprint & GHG emissions based on various parameters such as field characteristics (soil type, organic matter, pH), environmental conditions, agronomic practices, crop type, fertilizer type, applications timing, and residue management.
ICL is committed to continuing its pursuit of innovation, aiming to introduce new solutions to the market that satisfy the evolving needs of the industry and through these efforts, to position the Company as a leader in the future of agriculture.
In addition, ICL markets various products, serving the food industry's needs. Our JOHA® emulsifying salts, enables extended shelf life for food products, reducing food waste. We also market alternative protein solutions (plant-based substitutes). Through a collaboration with Protera Biosciences, an AI-driven FoodTech start-up, our Food Specialties develops novel proteins, offering sustainable, highly functional protein-based ingredients for food manufacturers. We also recently launched FruitMagTM, a sustainable, mineral-based and fungicide-free solution for post-harvest citrus fruit treatment. By using a food-grade magnesia product, ICL eliminates the need to use toxic materials and reduces product losses while increasing shelf life.
We produce numerous products that are used in the pharmaceutical, nutraceutical and food markets, and invest heavily in R&D to develop and manufacture safe, high-purity, high-quality ingredients. Among our many products are active pharmaceutical ingredients used by pharmaceutical manufacturers to treat osteoporosis, ingredients that help to amend and maintain electrolyte balance in the human body, and a line of 100% naturally based personal care products based on magnesium from Dead Sea salts. These include CareMag® D, a deodorant ingredient, CareMag® B, a baby skin care ingredient, and CareMag® M, a natural-based wash-off mask. These products are approved by COSMOS, the Cosmetic Organic and Natural Standard which establishes certification requirements for cosmetic products in Europe and is the standard recognized globally by the cosmetics industry.
Energy storage is a potentially significant source of growth for our phosphate-based and bromine-based specialty products. We sell products and services that support energy storage, which is necessary to advance the use of renewable energy in the global economy (Climate Action - SDG 13; Affordable and Clean Energy – SDG 7). We have significantly expanded of our energy storage activities by constructing a lithium iron phosphate (LFP) cathode active material (CAM) manufacturing plant in St. Louis, Missouri. The plant is expected to be the first large-scale LFP material manufacturing plant in the US. The facility is planned to be operational in the coming years and will help to meet growing demand from the energy storage, electric vehicle (EV) and clean-energy industries for US-produced-and-sourced essential battery materials. ICL plans to develop a customer innovation and qualification center (CIQC) in North America as we continue to execute our long-term plan to provide commercial solutions for the energy storage systems (ESS) market in the US. CIQC is expected to become a hub for ICL, its partners and its customers, as the Company looks to make significant advancements in its battery materials R&D capabilities.
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Our efforts to improve ICL’s impact on the environment are facilitated by innovation and commercial excellence activities (Industry, Innovation and Infrastructure – SDG 9). We are increasingly more operationally efficient, integrating renewable energy into our fuel mix and implementing Circular Economy activities, both within our organization and in collaboration with our partners.
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Circular Economy
‘Circular Economy’ and an Integrated Production Value Chain are guiding principles that drive our activities.
We are actively engaged in the development of sustainable solutions and processes, aligning our operations, products and business models with principles that contributes to Circular Economy. In 2023, we established a Company-wide Circular Economy Digital Community. As part of this program ICL teams are developing new approaches within three main pillars: exploring alternative raw materials, innovative material cycles and new business models for Circular Economy. To this end, we are innovating new products from what was previously regarded by us or the market as by-products or waste, as well as working to optimize our production processes.
Examples of these new activities and products:
We are constantly exploring new technologies to use secondary source phosphate as an alternative to virgin raw materials. We are developing future resources for our fertilizer products, including a technology roadmap for recycling and recovery of phosphorus and nitrogen from secondary sources.
PuraLoop® is an innovative phosphorus fertilizer manufactured by us from reacting 100% SSA (sewage sludge ash). This pioneering fertilizer addresses the critical issue of resource conservation in agriculture and promotes sustainable farming.
Pearl® is a sustainably recycled phosphorus that we produce that helps to close the phosphorus cycle. It is recovered from high concentrations of phosphorus in diverse water streams, preventing losses into aquatic environments while preserving finite rock phosphate resources. It is integrated into our premium controlled-release fertilizer, Sierrablen Plus®.
MagiK®, a powerful organic multi-nutrient for crops used as additive for fertilization product, was developed from a by-product stream of our magnesium production process.
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Fibagro Advance is a peat alternative growing media that uses waste from the timber industry and a thermo-mechanical process to create a unique matrix that improves moisture and nutrient retention. The product has a lower carbon footprint compared to peat and other peat alternatives.
ICL is one of the co-founders of the PolyStyrene Loop (PSL) recycling project in the Netherlands. The project focuses on recycling polystyrene foam demolition waste, recovering materials for new insulation, and reclaiming resources like bromine for sustainable polymeric flame retardants. The valuable bromine which it contains is recovered and re-used in a new polymeric flame-retardant.
Examples of optimization of ICL’s production processes include:
Our Ambition Creates Excellence (ACE) program has been expanded (from the original ambitious energy savings plan) to include the development of a standardized approach for Circular Economy that is designed to systematically review ICL’s waste streams, by-products and other outputs from our operations and identify opportunities to develop new and useful products, as well as to optimize our operations.
As part of our Circular Economy efforts in China, the Company develops a variety of different uses for Phosphogypsum, which is our Chinese site's only by-product that has not yet been fully utilized. In addition to existing solutions that have been developed and implemented, the Company has developed, together with local authorities, a solution for an old mine's rehabilitation. In 2023, more than 5.5 million cubic meters of phosphogypsum were utilized successfully.
At ICL Dead Sea, salt is used as infrastructure in the rehabilitation of roads, construction of wall barriers and batteries, as well as in other infrastructure projects.
ICL Periclase is working to reduce its remnant Magnesia waste and reuse it for the benefit of Circular Economy. During 2023, ICL Periclase implemented a project that uses magnesia powder, a non-hazardous material, to fill sinkholes in the Dead Sea region.
Non-financial KPI’s & Sustainability Linked Finance
In April 2023, ICL further expanded its strategic focus on sustainability by entering into a $1,550 million Sustainability-Linked Revolving Credit Facility Agreement (Sustainability-Linked RCF) with a consortium of twelve international banks.
The Sustainability-Linked RCF follows ICL’s initial Sustainability-Linked Loan (SLL) dated September 2021. Both the Sustainability-Linked RCF and the SLL include three Key Performance Indicators (“ESG KPIs”) which have been designed to align with ICL’s sustainability goals. The ESG KPIs include a reduction in Absolute Scope 1 & 2 GHG Emissions, an increase in the percentage of women in senior ICL Management and an increase in the number of valid TfS (Together for Sustainability initiative) scorecards obtained for ICL suppliers. Each of the KPIs will be assessed regularly during the term of the Sustainability-Linked RCF and SLL, through third-party verification of performance. As of the reporting date, the relevant annual targets have been achieved. For further information regarding increase in the percentage of women in senior ICL management, see “Item 6 – Directors, Senior Management and Employees – D. Human Capital".
For further information regarding the Sustainability-Linked RCF and SLL, see Note 13 to our Audited Financial Statements.
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Health and Safety
As a leading global specialty minerals company, we are subject to specific environmental, health and safety requirements under international, national and local laws, regulations and permits within each jurisdiction in which we operate. To sell our products and to operate our activities and processes, including mineral extraction, production, distribution, marketing and use of products, we are required to comply with relevant environmental, health and safety requirements.
ICL manufactures products that are part of everyday life. Some of our products, if not managed properly, are potentially harmful to the environment and to the health and safety of the public as a result of the effluents, air emissions and waste that are generated during production of some of the products. These substances can cause pollution that necessitates remediation, clean up or other responsive actions. In addition, some of ICL’s products may be hazardous to those who are exposed to them during their production, transportation, storage or use. Consequently,This applies as well to effluents, air emissions and other waste streams that are generated during the Company operatesproduction of some of our products. These substances can result in accordancecontamination that necessitates remediation, clean up or other responsive actions. Our existing products undergo an evaluation process during the various stages of their production process and supply chain, and we also assess the risks of our new products prior to their launch. We also invest resources to develop sufficient information and data for our products. This enables us to characterize their safety features with reference to human health hazards and environmental healththreats. We strive to take action to increase their positive impact and safety regulation.to reduce any negative impacts.
Industrial production in general, and the chemicalschemical and mining industry in particular, require takingthe implementation of special precautionary measures to maintain a safe and healthy work environment. SomeSafety is one of ICL’s products, raw materialsour essential values, and productionwe continuously work towards accident prevention by fostering a zero-accident culture. An OEMS-EHS (Operational Excellence Management System) provides the framework that drives operational excellence for industry-leading safety and reliability performance across our organization. As part of this approach, we conduct periodic risk assessments, PSM (Process Safety Management) methods and external and internal audits across all our operations, including our contractors’ operations. Emergency drills, personnel training and knowledge sharing processes represent a high riskare part of the annual plans of our sites. Our proactive program engages all of our employees and managers to anyone who deviates fromidentify risks and work to utilize various measures and technologies. Our efforts were recognized with our receipt of the required professional safety standards or from the mandatory means of safety.prestigious Verdantix award earlier this year.
To minimize potential occupational hazards that may occur during our operations, and to help ensure the safety of workersa safe and others in its plants, ICL seekshealthy work environment, we seek to comply with strict occupational safety and health standards prescribed by local, national and international laws and standards. The health of our employees and contractors is checked regularly. Mandatory and locally agreed safety equipment is provided to our employees and requested from our contractors. We regularly monitor our work environment and perform industrial hygiene monitoring as required by regulations and Company procedures. We set safety targets for improvement annually, and safety KPIs are reported and tracked from all ICL investsproduction sites. One of the KPIs for all executive management is IR (Incident Rates), which is an indication of how many incidents of lost working days (a measure of severity) occurred. In 2023, the IR was 0.7.
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*Incident Rate - Lost working days cases, multiplied by 200,000, divided by employees’ work hours. Any injury event with one or more lost workdays is included in the IR calculation method.
In March 2023, following a fatal accident that occurred at our Cabanasses mine in Spain, we only gradually ramped-up production after taking extraordinary safety measures. This incident is still under investigation by the local authorities. However, both external reports and our internal inspection committee found no evidence of Company negligence. We deeply regret any such occurrence and remain unwavering in our commitment to prevent its reoccurrence. Following any such incident, inspection committees are formed for in-depth learning processes, enabling necessary corrective and preventive actions to avoid future occurrences. This proactive approach reflects our ongoing commitment to safety and continuous improvement. For further information, see “Item 3 – Key Information – D. Risk Factors – Accidents occurring during our industrial and mining operations, and failure to ensure the safety of workers and processes, could adversely affect our business.”
We invest extensive resources in training and mentoring, as well as other safety measures, in order to continually improve occupational safety and health as well as to prevent accidents and occupational illnesses. As part of our proactive approach to EHS, we implemented an operations management system that provides the framework and structure to drive our operational excellence, safety and reliability across our organization (OEMS-EHS). We have also adopted Human and Organizational Performance (HOP) principles which focus on early detection and prevention. The principles aim to develop organizational transparency, as well as to educate and create safety defense mechanisms for employees, processes, and the environment. Moreover, the HOP approach creates dialogue and knowledge sharing within our organization between managers and employees. We have multiple proactive activities to prevent accidents. Since 2011, EHS incidents and these are measured by leading (proactive) KPIs.
We are a “learning organization” that strives to retain a mindset of learning from both our successes and our failures. Analysis of events and “near misses”, as well as reporting of EHS hazards, is encouraged and conducted at all our sites. Management meetings often include a case analysis of a recent EHS incident, including conclusions and corrective actions taken. We also initiate cross-organizational learning processes on a regular basis to encourage peer learning, including an international learning forum led by our Global EHS VP.
In recent years, we have implemented advanced technologies to assist us in managing EHS events and proactive safety processes globally. We have deployed specialty software at all our sites. The software's modules include lesson learning, shared learning, intake of innovative ideas arising from the field and additional controls and defenses. A change management module is also part of the assimilated technology. In addition, we created a mobile EHS application that is used globally for EHS management, hazard recognition, emergency-event management and various proactive online activities. Both employees and managers routinly use these technologies. We have also implemented an application intended to map, track and manage environmental incidents. This is designed to enable us to respond quickly to emergency events, as well as to conduct crisis management.
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Emergency drills, including surprise drills, are a part of our annual work accidents (Company employees only) by almost 50%plans and are regularly performed to about 80 accidents annually. ICL is continuingtest and improve readiness for events including earthquakes, leakage of hazardous materials, fires, etc. We continue to enhance itsour procedures and measures with the goal of becoming leaders in crisis management, management of workplace hazards and EHS practices.
To prepare for natural disaster and emergency scenarios, we have created emergency teams qualified to perform a broad range of first responder roles, including rescue from ruins and disaster areas following earthquakes. Dozens of volunteers participate in activities in addition to their routine duties. Teams are equipped with advanced equipment and practice highly complex rescue and evacuation scenarios.
We have defined a Business Continuity Plan (BCP) to enable business continuity and quick recovery from various crisis scenarios, and to minimize business disruption and EHS impact.
In addition, we are introducing AI technology to support various processes and improve our defenses, including the use of robots and drones. Examples of our use of such technology include: “smart” systems for forklifts and trucks, using drones to inspect confined spaces (which eliminate the need for an employee to enter dangerous surroundings), smart sensors and more.
PSM methodology is used to develop and implement policies and standards guided by the CCPS framework, which include the EU Seveso Directive, OSHA PSM Regulation and UK HSE Control of Major Accidents. Israel’s Ministry of Environmental Protection has adopted the Seveso risk assessment methodology, and Israel’s Ministry of Labor recently adopted the OSHA PSM Regulation and is expected to require it at our relevant facilities. All processes include both employees and contractors.
We have streamlined formal Enterprise Risk Management (ERM) policies and procedures and conducted a comprehensive risk mapping process throughout our organizational units. Our risk management process is a structured, continuous process, consisting of both periodic and ongoing activities. Our ERM focuses on process safety at all sites throughout our Company. For further information, see “Item 4 – Information on The Company — B. Business Overview - Task Force on Climate-related Financial Disclosures (TCFD)".
For further details on regulatory, environmental, health and safety matters, see our “ICL Corporate Responsibility Report 2022” (web-report) on our website at www.icl-group.com. The reference to our website is intended to be an inactive textual reference, and the information on, or accessible through, our website is not intended to be part of this Annual Report.
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Climate Change and Greenhouse Gas Emissions
The impact of climate change is being recognized throughout our value chain and across the globe. Our clients, for example, are exposed to extreme weather eventswhich is stressing food production systems. Our own facilities are identifying their exposure to various climate-related impacts. Climate change is an increasing concern not only to governments and non-governmental organizations, but also to our stakeholders, including our investors, customers, employees and the general public. In response, we are aligning our actions in an effort to meet the accelerating pace of this change.
We are witnessing an increasing level of new and tightened global regulation of greenhouse gasses (“GHGs”). Ultimately, these regulations could impact our operations by requiring us to change our production processes or by increasing our raw-material use, energy consumption, and production and transportation costs. These regulations will also include increased disclosure of our efforts and costs. For additional information regarding our climate change– related risk management and GHG emissions, see “Item 3 - Key Information— D. Risk Factors”.
ICL Task Force on Climate-related Financial Disclosures (TCFD)
Introduction
ICL is a leading global specialty minerals company. Our sector can be an important enabler in the transition to a low carbon economy through the development of innovative products and services as well as by offering solutions designed to promote sustainable agricultural practices, minimize environmental impact and enhance agricultural efficiency in a more sustainable manner. As our sector is a major consumer of fossil fuel-derived energy and an emitter of greenhouse gasses, it is imperative for us to transition to net zero. We recognize that climate change has a wide-ranging impact on our operations, supply chains, and markets. In addition, as a company committed to transparency and responsible reporting, we acknowledge the rapid increase in global interest in the development of more comprehensive climate-related disclosure. In 2023 the International Sustainability Standards Board (ISSB) published the first IFRS Sustainability disclosure standards, while the first set of European Sustainability Reporting Standards (ESRS) were published by the European Financial Reporting Advisory Group (EFRAG). In addition, the US Securities and Exchange Commission (SEC) released its final climate disclosure rule on March 6, 2024. Although the disclosure requirements and topics differ among the frameworks, climate-related disclosures are included in each of the frameworks, demonstrating their importance. For further information, see “Item 3 - Key Information— D. Risk Factors". Since 2017 the TCFD framework has been the leading climate reporting standard for public companies. The climate related disclosures in this report are guided by a TCFD framework, marking the third year in which we are reporting in alignment with its recommendations. In July 2023, the Financial Stability Board (FSB) requested that the IFRS Foundation assume the monitoring of the progress on companies’ climate-related disclosures from the TCFD, signifying a more integrated and comprehensive approach to climate-related disclosures.
In 2022, we committed to a 30% reduction of our greenhouse gases (GHG) emissions (Scope 1&2) by 2030 (vs. 2018), and we aim to be net zero by 2050. To date, we are on track to achieve this goal. ICL’s Board and our senior management have adjusted the Company’s climate strategy to align with the aims of the Paris Agreement which is to limit global temperature rise to well below 2 degrees Celsius above pre-industrial levels, with efforts aimed at limiting the increase to 1.5 degrees Celsius, for the purpose of mitigating the impacts of climate change. As we continue our journey towards a more sustainable future, our Board approved the submission of a declaration to the SBTi (Science-Based Targets initiative) organization, wherein the Company will commit to establish a near-term, science-based target in accordance with the framework developed by the SBTi. The initiative drives ambitious climate action in the private sector by enabling organizations to set science-based emissions reduction targets in line with the Paris Agreement’s goals.
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Consistent with the approach we took in previous years of reporting under the TCFD framework, the following section presents our progress with regard to the TCFD's four pillars: Governance, Strategy, Risk Management, and Metrics and Targets. The Financial Stability Board (FSB) created the TCFD to develop recommendations on the types of information that companies should disclose to support investors, lenders, and insurance underwriters in appropriately assessing and pricing a specific set of risks related to climate change. We conducted a screening of material climate-related risks and opportunities relevant to ICL, highlighted our existing good practices and identified next steps to strengthen our climate-related governance, strategy and risk management procedures. In this, our third year of voluntary TCFD reporting, we further embedded TCFD recommendations by integrating a ‘bottom-up’ approach to identifying and verifying climate-related risks and opportunities. Given the above-mentioned development of new reporting frameworks regarding climate-related disclosures (e.g. ISSB, EU Corporate Sustainability Reporting Directive, US SEC), we expect that our climate-related disclosures will continue to evolve in subsequent years.
Governance and Management of Climate Related Risks and Opportunities
Board-level Oversight of Climate-related Issues
Climate risk management is an integral part of our overall approach of doing the right thing, in the right way, every day. ICL’s Board is responsible for setting ICL’s overall strategic direction, including related to sustainability, climate and ESG related matters. The Board views climate change as a material component of the Company's strategy.
The Board has appointed a Climate, Sustainability and Community Relations Committee (“CSC Committee”) to oversee climate-related issues, including but not limited to, climate-change risk assessment and mitigation plans, installation of renewable energy facilities, site decarbonization plans, implementation of Circular Economy activities, achieving water saving targets and implementation of various policies relating to environmental impact. The CSC Committee is chaired by Dr. Miriam Haran, a leading environmental expert with substantial experience in environmental and climate-related matters. The CSC Committee comprises three additional directors on the Board who possess significant industrial and risk management experience, including related to environmental matters.
The CSC Committee convenes quarterly, as scheduled, unless additional meetings are necessitated for ad hoc purposes. The meetings include review of updates regarding the Company’s latest ESG related events, changes in underlying regulations, ESG risk assessments and ESG management systems, as well as review and approval of policies and procedures when relevant. In addition, the CSC Committee holds annual discussions regarding, among other things, climate risk and mitigation measures, TCFD disclosures, the Company’s ESG Report and ICL’s sustainability KPI matrix and targets. Progress against climate-related goals and targets and monitoring progress vis-a-vis the Company’s GHG decarbonization targets is also discussed during these meetings (for more information, refer to the ‘Metrics and Targets’ section below).
In February 2023, the Board approved the submission of a declaration to the SBTi organization, wherein the Company will commit to set a near-term, science-based target in accordance with the framework developed by the SBTi. The Board’s approval followed discussion and approval by the ICL’s Global Executive Committee (GEC) in January 2023, and the CSC Committee in February 2023. Following CSC Committee and Board approval, in March 2023, SBTi officially confirmed our commitment to develop a decarbonization plan in accordance with the criteria and processes of the SBTi.
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The Board’s Audit & Accounting Committee, as determined in ICL’s Board Manual, is responsible for, among other responsibilities, overseeing ICL’s risk management, including monitoring the Company’s activities to manage and mitigate identified risks, as well as to ensure our Company’s compliance with relevant regulations. Accordingly, ICL’s Enterprise Risk Management (“ERM”), which includes climate related risks, is discussed at least on a bi-annual basis, and any material changes are updated on a regular basis.
ICL’s ERM approach and constituting documents, including our ERM policy and procedures, follow the risk management methodology of the Committee of Sponsoring Organizations of the Treadway Committee (COSO). That methodology is defined as “the culture, capabilities, and practices, integrated with strategy setting and its performance, that organizations rely on to manage risk in creating, preserving, and realizing value”.
ICL has integrated climate related risk into its formal ERM processes, including into its ESG risk management structure and in various categories under the ICL Risk Universe. Physical and transition risks have been integrated on all risk levels.
For further information, including additional information regarding Dr. Haran’s biography and the frequency of CSC Committee and the Audit & Accounting Committee meetings, see “Item 6 –Directors, Senior Management and Employees— A. Directors and Officers & C. Board Practices—Our Board Committees”.
Management and Leadership Oversight
ICL’s Global Executive Committee (“GEC”), comprised of our senior executive management members, meets on a weekly basis and is responsible for overseeing the Company’s actions, policies and initiatives designed to ensure that ICL’s material ESG and climate-related risks are being appropriately addressed and managed. It also renders decisions on various issues including sustainability, climate and ESG matters. This includes the formation of annual budgets, deliberations regarding major capital and operational expenditures for climate mitigation activities related to low carbon production products and services, climate-related transactions (including acquisitions, mergers and divestitures) and the implementation of our climate transition plan.
To assist the GEC to better monitor and oversee ICL’s sustainability, climate and ESG related matters, the GEC appointed a GEC Sustainability Committee, an advisory committee which convenes on a quarterly basis. The GEC Sustainability Committee is chaired by our EVP, Chief Legal and Sustainability Officer, and is comprised of our CFO, the EVP, Chief Risk Officer, ICL Potash Division President, who is also in charge of ICL’s global EHS, the Chief Procurement & CAPEX Officer, the Chief Innovation and Technology Officer and the ICL Phosphate Specialty Solutions Division President.
Two separate management-level committees report to the GEC Sustainability Committee on climate related risks: (i) a Physical Risk Committee and (ii) a Transition Risk Committee, which are supported by our global sustainability and risk management teams, which manage both physical and transitional climate-related matters. The purpose of these committees is to identify potential climate related risks and opportunities, assess their impact on ICL’s operational and logistic sites, manage their financial transition, and determine mitigating actions to minimize ICL’s exposure to risk according to the respective ICL risk appetite. The chairs of the committees meet on a periodical basis to synchronize their activities.
For further information regarding ICL’s senior management, see “Item 6 – Directors, Senior Management and Employees – A. Directors and Officers”.
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Working Groups
Multiple stakeholders within the Company are engaged as needed. We apply a ‘bottom-up’ approach to climate-related risk and opportunity identification and verification to ensure that awareness of climate-related issues is implemented across all our segments, business units, operations and geographic locations.
Training
We conduct dedicated training sessions on climate, environment and sustainability-related topics for various business segments and functionaries across the Company on a routine basis to ensure that they are updated on the latest developments.
Board Oversight Trainings
An initial training related to TCFD was provided to our Board in February 2022. Additional capacity building was conducted on several occasions throughout the year. In December 2023, a preliminary update session regarding TCFD and our progress in that regard was conducted for the CSC Committee, which served as the initial overview. A comprehensive update session, including a thorough review and discussion of ICL’s annual TCFD process and disclosures for 2023, was conducted jointly in March 2024 for the CSC Committee and Audit & Accounting Committee, with participation from all members of our Board.
Each quarterly Board meeting opens with an ESG review and discussion of ESG and climate‑related aspects, as well as monitoring of related KPI’s. Twice a year, the Board conducts off-site Board visits at ICL’s sites. These meetings include a tour of the site and discussion of, among other topics, environmental, sustainability, climate, safety and other ESG risks and related issues.
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Management Oversight Training
Our GEC’s continuous training program encompasses comprehensive discussions on a wide array of critical topics including climate action, sustainability strategies, safety protocols, risk management and various other ESG (Environmental, Social, and Governance) considerations. This includes training sessions on topics such as scope 1, 2, and 3 emissions, as well as in-depth education on initiatives like the Science-Based Targets initiative (SBTi). Moreover, the training provides updates on pertinent regulatory changes and facilitates regular discussions on risk assessments to ensure our leadership remains well-informed and proactive in addressing emerging challenges.
Working Groups and Stakeholders Trainings
Various ongoing workshops are held for various working groups, accompanied by internal and external experts. In addition, each year ICL organizes a global ESG Week that focuses on environment, safety and health, community and volunteering, quality assurance, sustainability and compliance topics. The purpose of the event is to promote engagement and knowledge sharing within the Company to increase awareness of our sustainability goals and guiding principles as well as to implement a culture of sustainability. In 2023 we officially embraced the UN Sustainable Development Goals (SDG’s) as our Company’s guiding principles within our revised code of conduct and as a reflection of our overall approach to sustainability and doing the right thing, in the right way, every day. We are continuing our dedicated work to implement SDGs in all areas of our operations and activities. Engagement activities include both on site and online workshop trainings, external lectures, materials, etc.
Strategy
In 2022 the Board and senior management adjusted the Company’s climate strategy to align with the aims of the Paris Agreement. As previously mentioned, in February 2023, the Board approved submitting a declaration to the SBTi organization, wherein the Company will commit to setting a near-term, science-based target in accordance with the framework developed by the SBTi. Currently, we are in the process of exploring target options in accordance with the criteria, while simultaneously developing a decarbonization pathway, and we intend to submit our decarbonization plan within the required time frame to the SBTi for their validation.
We are taking a systematic approach to reducing our GHG emissions across our global operations. ESG KPIs and targets, including climate related targets, have been embedded in executive measures for success and financial performance-based benefits for key executives. For further information, see “Item 6 – Directors, Senior Management and Employees — B. Compensation".
Informing Current Strategy and Initiatives
Climate risks and opportunity factors are incorporated into our business strategy and operations to improve our short, medium, and long-term financial and operational resilience. In alignment with TCFD definitions, physical risks and opportunities are those that occur as a result of climate change manifestations, whether occurring as chronic long term climatic changes or as acute episodic extreme weather events. Transition risks and opportunities are those that occur as a result of the transition to a low carbon economy, including legal and/or regulatory risks such as carbon pricing mechanisms, market supply and demand, litigation and reputation, and changes in key areas of technology.
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Products and Services
To thrive in a world impacted by climate-change, it is necessary to offer and provide products and services that enhance global food security, efficiency and safety. ICL’s is focused on creating new products and services that are designed to promote both climate change mitigation and adaptation. Additionally, our Company's product portfolio includes products that reduce water use and are designed to reduce the leaching of fertilizers into water sources.
Our fertilizers are designed to enable plants to survive under climatic stress such as drought and heat. Other products we produce, such as Keep Green, is the first biofertilizer to be developed to protect coffee tree leaves from excessive solar radiation. In this regard, our products support agricultural resilience and adaptation to climate stress. Our product portfolio also includes controlled release fertilizers (CRFs) and bio-stimulants that support plant nutrition and minimize N2O emission in the use phase, reducing GHG emissions and supporting climate change mitigation.
Alternative proteins are also part of ICL’s portfolio, and in 2023 we invested in Arkeon, GmbH. This investment will support Arkeon’s innovative and sustainable one-step fermentation bioprocess which creates customizable protein ingredients by capturing carbon dioxide (CO2). The resulting alternative proteins are carbon negative and clean-label functional ingredients.
ICL's diversified product portfolio also incorporates Energy Storage Solutions (ESS). Transitioning to renewable energy is a core path to climate-change mitigation and it depends on broadly implemented energy storage capabilities. We believe that our phosphate-based and bromine-based specialty products are key in supporting energy storage, a technology growing in high demand. In 2023, ICL broke ground on a battery materials manufacturing plant in the US, furthering the Company's plans to build a lithium iron phosphate (LFP) cathode active material (CAM) manufacturing plant. ICL will continue to invest in ESS.
For more information, see the section “Downstream Opportunities” below.
Operations
ICL continues to innovate, seeking to establish best practices, work to eliminate process inefficiencies and optimize operations to mitigate its GHG emissions. We have established a dedicated team to implement energy efficiency projects across our plants throughout the world as part of our Ambition Creates Excellence (ACE) program. Since 2021 this team has refocused its efforts on delivering lower carbon solutions globally, and it is working to implement GHG reduction measures, as well as Circular Economy and water efficiency measures, as part of our decarbonization road map. Measures include transitioning to lower carbon fuels for both on-site power generation and process heating, electrification and increasing energy efficiency through phaseout of inefficient production technologies, streamlining production facilities, and improved efficiency of heat and steam consumption. We also seek opportunities to increase the use of renewable energy as part of ICL’s fuel mix.
Supply Chain
Extreme climate events can result in disruptions to the supply of needed raw materials to our sites (upstream) or to ICL's ability to transport products to its global customers (downstream), and, as a result, could affect our Company’s business. A strategic decision was taken to search and identify any additional potential risks of climate-change related disruptions to the transportation of raw materials/products, and to diversify the means of transportation to assure the continuity of production and product supply to our customers. Furthermore, to maintain resilience, we are constantly working to reduce our dependency on critical, single source suppliers by creating alternative solutions. For further information, see “Item 3 - Key Information— D. Risk Factors".
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Sustainable Procurement
We are engaged in extensive training to raise awareness among ICL’s suppliers regarding sustainability, transparency and carbon emissions reduction, as part of the industry wide Together for Sustainability (TfS) initiative as well as ICL’s effort to evaluate and reduce its Scope 3 emissions.
In parallel, as part of our focus and efforts to increase renewable energy in our energy mix, ICL has a cross-organizational team comprising representatives from our Global Procurement Organization (GPO) and our Operational Excellence and Sustainability units who participate in efforts to purchase electricity produced by renewable energy, as well as support capital investments to install onsite renewable energy production at our facilities. This has led to success in Europe and the US, where, in 2023, over 97% of the electricity purchased by our sites was derived from zero-emission origins. In Israel, in alignment with our climate strategy, the Company entered into long-term power purchase agreements with two Israeli providers of "green electricity". These long-term agreements (15 years) will see ICL purchase more than 175 million kWh of electricity from renewable sources on an annual basis, beginning in 2024. ICL was an early adopter and one of the first companies in Israel to sign long-term renewable energy contracts as soon as the relevant regulatory environment supported it. We will continue to deepen our approach as the markets for on-site renewable energy, long-term power purchase agreements and other supply mechanisms continue to mature.
Investment in R&D
Our research, development, and innovation (RD&I) activities support ICL's growth strategy. The main objective of these activities is to enable new product sales and new business creation in the areas of next-generation fertilizers, food technology, e-mobility, novel materials and digital agriculture. ICL’s RD&I organization is establishing both short-term and long-term goals for GHG emissions reduction technologies. Research, redesign and implementation of low carbon solutions are currently being introduced to mitigate process-based and product-based emissions as well as to meet future demand.
Using our core RD&I capabilities, we are also developing products that address market needs and megatrends. Our Compass Assessment tool offers guidance and support for new projects. The process includes defining and framing the scope of potential and risk, as well as impact goals in regard to specific SDGs. These guide us in the process of developing new products and services.
Through our Open Innovation platform, we seek to collaborate with entrepreneurs, researchers, innovators, and startups to foster innovation in these areas. Another path is our ICL Planet Startup Hub, Food Tech and Agtech external accelerator that we created to access startups with disruptive technology and to help them to scale and go to market using ICL’s knowledge, experience and strengths.
In the short term, our RD&I organization is using its existing infrastructure to challenge internal and external partners to introduce solutions, such as advanced fertilizers that increase nutrient use efficiency and reduce water consumption, low carbon and climate resilience solutions, Circular Economy activities, energy storage materials and more. This includes ICL’s industry leading internal accelerator program, “BIG”, that is used to promote our GHG reduction breakthroughs.
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Financial Planning
Our global finance teams are integrating ESG-related KPIs and GHG emission reduction targets into our financial reporting and planning. This includes creating the necessary data infrastructure (data quality and data management) and management infrastructure to enable and support proper decision-making processes, along with an increase in the transparency of our ESG performance with rigorous financial methodologies and metrics. ICL considers sustainable finance an essential tool to support our transition to a low-carbon and environmentally sustainable economy. With the proper infrastructure in place, we have been able to take advantage of financial opportunities. In September 2021, ICL received its first €250 million Sustainability-Linked Loan ("SLL"). The loan is a step forward in ICL’s ongoing sustainability efforts and includes three sustainability performance targets. These include: a reduction in absolute Scope 1 & 2 GHG emissions, an increase in the percentage of women in senior ICL management and an increase in the number of valid TfS (Together for Sustainability initiative) scorecards obtained for ICL Group suppliers. These targets were designed to align with our sustainability strategy and goals, and each will be assessed at specific times during the term of the loan through third-party certification.
Additionally, in April 2023 ICL further expanded and increased its commitment to ESG by entering into a Sustainability-Linked Revolving Credit Facility Agreement between an ICL subsidiary, ICL Finance B.V., as borrower, and a consortium of 12 international banks, for a $1.55B credit facility ("Sustainability-Linked RCF"). The Sustainability-Linked RCF also includes three ESG KPIs in the same domain as mentioned above regarding the SLL.
Risk and Opportunities
Identified Climate Change Risks and Opportunities
Over the past several years, climate change and GHG emissions have been of increasing concern worldwide. Laws and regulations that govern climate change and GHG emissions already have certain impacts on ICL Group’s operations and may present transition risks for both the short and long term.
Carbon taxes and cap-and-trade-emissions schemes are increasingly viewed in global jurisdictions as a way of pricing carbon – a key policy driver to reduce GHG emissions. Currently, one of ICL Europe's sites, ICL Iberia, is covered by the EU-ETS Emissions Trading System, and in the UK, ICL Boulby is subject to the UK Emissions Trading Scheme. In Israel, a new carbon tax on fossil fuels, including natural gas, has been proposed in the Knesset, Israel’s legislature, to be implemented gradually over the course of the current decade. Other carbon mechanisms may be implemented in the future.
Additionally, under the European Green Deal, the EU adopted a Carbon Border Adjustment Mechanism (CBAM) regulation in 2023 which was created to stop carbon leakage from the EU (i.e. the risk that the EU carbon emissions reduction regulations will be offset by increases in emissions in jurisdictions with less stringent regulations), which will apply to some of our operations. The EU CBAM charge will phase in over a period of nine years, beginning in 2026. Regulations relating to GHG emissions are at various stages of consideration by the US federal government as well as in some US states.
Consequently, it is expected that in the short to medium term, ICL will need to purchase carbon allowances through specific programs (such as the EU and UK ETS) and/or incur additional capital costs for energy and emission reduction measures. Similarly, carbon taxes or restrictions on fossil fuel electricity production could increase our energy costs as well as the costs of supplied materials and services across the ICL value chain.
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We are subject to laws and regulations that will require us to disclose information relating to climate risks. As of 2026 ICL’s large EU subsidiaries are expected to report under the EU's Corporate Sustainability Reporting Directive over financial year 2025. In March 2024, the SEC issued a rule requiring disclosure of climate-related risk and we expect additional jurisdictions to adopt regulatory disclosure requirements relating to climate risks and opportunities disclosures, GHG emissions and other ESG metrics in the foreseeable future.
Physical impacts related to climate change may also have significant impacts on industries and the economy. These impacts may include extreme heat, extended drought durations altering water availability and quality, changes to sea level and temperature, increases in the frequencies and intensities of storms and extreme convective events which could also result in damage to facilities or equipment. The impacts may also encompass changes in the availability of natural resources leading to the disruption of supply chains. These physical risks have the potential to financially disrupt operations through increased costs and business interruptions, upstream raw material supply and downstream distribution. For example, a few of our Israeli facilities, including our sites at the Dead Sea, are located in an area that has been impacted by floods in the past, which has led to the initiation of a major flood protection response by ICL. Physical risk can also occur when transport barges are unable to operate on key waterways. Such events have occurred along the Rhine River where summer water levels have impeded the transport of raw materials. For further information, see “Item 3 - Key Information— D. Risk Factors”.
Transition-related opportunities relevant to ICL include products and services that can service multiple needs in terms of climate change. Opportunities for ICL are relevant with regard to the direct impact of climate change with products available for both mitigation and adaptation, and with regard to indirect impact with products and services that reduce water use and contribute to a Circular Economy. As part of our strategy to focus on our specialty products, and with standard R&D timelines ranging from 5-15 years, we have successfully responded to some of the transitional risks through our product portfolio.
For example, with respect to climate mitigation, we have created a dedicated global and multidisciplinary Energy Storage Solutions Unit to focus on maximizing the opportunity of energy storage solutions needed to support the renewable energy market. As a world-leading mineral producer, ICL has access to bromine, phosphates, and high purity phosphoric acid for energy storage. ICL is in the process of building a lithium iron phosphate (LFP) cathode active material (CAM) manufacturing plant in the US which is expected to be operational in the coming years. This is expected to be the first large-scale LFP material manufacturing plant in the US. [Opportunities: Products & Services].
Another example is our new meat protein substitutes which were driven by consumer demand [Opportunities: Markets, Products & Services] to reduce the ecological (carbon and water) footprint by replacing animal protein. In addition, our ICL Planet Startup Hub, ICL’s AgriFood innovation accelerator platform, invested in Arkeon GmbH whose patented process harnesses carbon dioxide and transforms it into nutritious protein – a process that is not only sustainable but regenerative.
By tracking consumer preferences for low carbon footprint products [Opportunities: Markets, Products & Services], we successfully developed a multi-nutrient fertilizer based on naturally occurring Polysulphate®. Polysulphate® requires no chemical processing, creates no waste products and has less potential to contribute to global warming than other comparable products. With its low carbon footprint, Polysulphate® is a fertilizer that could help farmers reach their industry or national carbon targets. We also produce Control Release Fertilizers (CRF) that are highly efficient during their use phase by reducing carbon intensity.
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Among the key strategies to achieve a low carbon future is the transition from linear economic models to circular ones with reduced material consumption and waste generation. We are working on multiple products and development opportunities to be in line with Circular Economy principles. An example is ICL’s Fibagro Advance, our peat alternative growing media that uses waste from the timber industry and a thermo-mechanical process to create a unique matrix that improves moisture and nutrient retention with a low carbon footprint and replaces peat mining.
To recognize the importance of research and development (R&D) for our sector, ICL owns multiple patents in various countries. We describe our strategic research along with our development and innovation activities as they relate to climate change in the R&D section below.
Shaping Future Strategy
The ICL TCFD program is designed to complement and augment ICL’s existing climate strategy and associated risk management. We have applied a forward-looking scenario analysis to identify physical and transitional climate related risks and opportunities that could have a material financial impact on our business over 2030, 2040 and 2050 timeframes.
These risks were identified over various timeframes and will be monitored, evaluated and updated as necessary. Time horizons include short term (0-3 years), medium term (3-10 years) and long term (10+ years) time frames. These time horizons are representative of timelines associated with our short-term climate-related targets and our 2030 commitments related to GHG emissions reduction, as well as our medium-term and longer-term 2050 climate-related strategies.
In 2021, ICL initiated a high-level climate change scenario analysis to better understand the potential timing and impact of climate-related risks and opportunities across ICL’s key geographies and business segments. The assessment was completed using relevance weightings and climate data to illustrate the trends by key indicators for specific climate scenarios, with consideration of future timeframes.
In 2022 and 2023, we consistently progressed in our efforts to better understand the potential impact and appropriate measures to reduce climate-related risks and capture opportunities for the Company, as well as to further embed TCFD recommendations into our public disclosure. We reviewed and updated the ‘top-down’ approach undertaken in our first year in line with our approach to assess risks and opportunities. We introduced financial stress-tests to evaluate the possible impact of various climate scenarios. We integrated climate-related risks into our formal ERM processes and applied a ‘bottom-up’ approach to climate-related risk and opportunity identification and verification, ensuring that awareness of climate-related issues is raised across all our segments, business units, sites and geographic locations. For further information regarding our risk identification and management, see the Risk Management section below.
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Physical/Transition Risks
The following timeframes and scenarios were used in the assessment:
| • | Physical risks: 2030, 2040 and 2050, using the Intergovernmental Panel on Climate Change (IPCC) Shared Socio‐Economic Pathways (SSPs), SSP1-2.6 (Low emissions scenario), SSP 2-4.5 (Medium emissions scenario) and SSP5-8.5 (Business as usual/High emissions scenario). |
| • | Transition risks and opportunities: 2030, 2040 and 2050, using six scenarios; Net Zero, Announced Pledges Scenario (APS) and Stated Policies Scenario (STEPS) developed by the International Energy Agency (IEA) as well as the Network for Greening the Financial System (NGFS) Net Zero, Below 2˚C and Nationally Determined Contributions (NDC’s) scenarios. All scenarios use carbon prices as an input in their modelling. As a part of the scenario analysis for 2023, ICL has considered the impact of carbon pricing mechanisms on Scope 1,2 and 3 emissions. |
In addition, we have assessed the potential impact of climate-related factors on our financial performance, considering both physical and transition risks and their potential financial impacts, including CAPEX, OPEX, business disruptions, and stock losses. Financial impacts relating to transition risks are revealed in both direct and indirect carbon costs and potential revenue losses.
The outputs derived from this process resulted in a set of potentially material financial physical risks (Table 1 below), and transition risks and opportunities (Table 2 below).
Physical Risks:
As a part of our TCFD journey, in 2021 we conducted a preliminary high-level risk and scenario analysis focusing on physical risks aligned with TCFD recommendations. More detailed analysis was conducted in 2022 using a bottom-up risk assessment approach that covered all of ICL's production sites globally. This year, we deepened and expanded our previous analyses to include exposure with the aim of identifying asset specific vulnerability and comparability to prior year assessments. In addition, full coverage of ICL’s assets (including warehouses, offices, and R&D facilities) and operational activities (including production, manufacturing and plant) were included in the updated analysis. For the purposes of our reporting, results reflect the most material assets across the geographies where we operate. The bottom-up assessment included material implications that impacted key operational aspects, including EHS, infrastructure, workforce, production, raw materials and products. To enhance preparedness, we conducted capacity-building activities and climate risk awareness training and education sessions, in parallel with the risk identification phase.
Climate-related physical risks may be expected to occur under all scenarios but are more likely to bematerial under the high carbon scenario - IPCC SSP5-8.5.
Table 1 identifies potential physical risks that may affect the regions in which we operate, including heat stress, flood (pluvial, fluvial, tidal), water stress, storms and convective events (such as tornadoes), wildfires and tropical cyclones in the short to mid (2030) and long (2050) term. Climate scenarios are not intended to represent a full description of the future, but rather to highlight central elements of a possible future and may differ over time.
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Table 1: Physical risks by region under all considered scenarios over the short – mid (2030) and long-term (2050) time frames.
The likelihood of a physical risk across a geography is defined based on a local exposure score
(1-100), as reflected in our climate models which provide additional synthetic information regarding the propensity of an asset to be subject to significant hazard intensities given the physical local climate properties. Local climate specificities are based on the Köppen Geiger climate classification, which is one of the most widely used climate classification systems. The average local exposure score is computed for all considered assets across a geography. Water stress in Israel is mitigated due to the development of non-conventional water sources by the Israeli government, such as treated wastewater and desalination. As a result, water production capacity in Israel exceeds demand, reducing potable water scarcity and water stress risks in the country.
(1-100), as reflected in our climate models which provide additional synthetic information regarding the propensity of an asset to be subject to significant hazard intensities given the physical local climate properties. Local climate specificities are based on the Köppen Geiger climate classification, which is one of the most widely used climate classification systems. The average local exposure score is computed for all considered assets across a geography. Water stress in Israel is mitigated due to the development of non-conventional water sources by the Israeli government, such as treated wastewater and desalination. As a result, water production capacity in Israel exceeds demand, reducing potable water scarcity and water stress risks in the country.
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Likelihood table for physical risks assessment (average likelihood across a geography):
Impact:
The measure of impact considers the sum of consolidated additional impacts considering the specific site's resilience compared to the historical period by scenario and horizon across the assets in one geography. For all identified risks in Table 1, the assessment takes into account the potential impact of climate-related factors on financial performance, including increases in CAPEX and/or OPEX, business disruptions as well as stock losses.
The following is an impact table for physical risk assessment (The measure represents the most likely impact that would occur if the stated risk materialized):
Considerations and outcomes of Physical Risk Assessment
Heat Stress
Exposure to heat stress is calculated as the number of days per year above several thresholds of heat stress, accounting for the specific climate specificities. The exposure is based on the projections of Wet Bulb Globe Temperature (WBGT), a measure of heat stress in direct sunlight accounting not only for daily temperature levels, but for humidity patterns and wind speeds as well. The financial impacts of heat stress are based on additional impacts compared to the historical period, i.e. the changes of heat stress compared to the historical impacts on productivity that are considered integral to current revenue.
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Flood Exposure
Exposure to flooding is calculated as average levels of Pluvial, Fluvial and Tidal flood (meters) for 100-year return period events accounting for topography specificities and defense systems. The exposure is based on the projections of Pluvial flooding (an extreme rainfall event that creates a flood independent of an overflowing water body), Fluvial flooding (which occurs when rivers and streams break their banks and water flows out onto adjacent low-lying areas), and Tidal flooding (which occurs when the rise in sea level combines with local factors to push water levels above the normal high tide mark). The flooding impacts are considered high when accounting for the total impact of a 100-year return period event, while having a low likelihood (1% yearly chance of occurrence). The impacts presented do not account for additional mitigation measures in place, such as insurance coverage across highly at-risk assets.
Water Stress
Exposure to water stress is calculated as the ratio of total water withdrawals to available renewable surface and groundwater supplies. A vulnerability assessment to water stress takes into account interruptions in activity due to site disruptions and increases in OPEX based on water stress levels. Water stress is a particular focus for ICL’s Israel operations but it is mitigated due to the development of non-conventional water sources by the Israeli government, such as treated wastewater and desalination. As a result, water production capacity in Israel exceeds demand, reducing potable water scarcity and water stress risks in the country. The impacts of water stress presented in the current year partly consider Israeli government resilience measures, and as a result the risk assessment decreased to low and medium in the corresponding time horizon.
Wildfire
Exposure to wildfire is calculated as the yearly values of the Forest Fire Risk Index that combines a measure of vegetation dryness with air temperature, wind speed and humidity. The risk of fires in Israel is lower in the current assessment due to the consideration of resilience measures (on-site fire station, water systems, etc.) as well as granular land-cover related risk reduction (lowered risks due to exposed sites' location in desert areas with low to no vegetation (fuel for fire)).
Tropical Cyclone
Exposure to tropical cyclones is calculated as the measure of tropical cyclone 1-min sustained wind speed in relation to a 40-year frequency event.
Storm Events
Exposure to storms and convective events (such as tornadoes) is calculated as the convective available potential energy and annual maximum wind gust speed accounting for the specific climate specificities.
Mitigation measures currently adopted by ICL at various sites include, but are not limited to, flood management plans, cooling systems and extreme heat management work protocols, insurance-based solutions (e.g., acute events), emergency response plans, and improved ventilation measures.
However, it is to be noted that the physical risks in Table 1 do not fully consider those that may arise in the value chain, and which may affect future demand for products or the availability of supplies. In our 2023 assessment, we investigated the downstream physical and transitional risks inherent in our value chain, specifically concentrating on our fertilizers. Any noteworthy discoveries from our downstream analysis are outlined in the chapter on Transition Risks and Opportunities.
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Transition Risks and Opportunities:
As economies transition toward a low carbon economy, a range of new opportunities and risks are expected to increasingly impact markets in the form of emission quotas and trading mechanisms, internal and cross-border taxes on carbon emissions and product carbon footprints, climate-related mitigation and reputational risks, competition from new low-carbon technologies and emphasis on operational and logistical efficiencies. Together, these are considered transition risks and opportunities. We conducted an initial assessment of these risks and opportunities in 2021, followed by a more detailed analysis in 2022 in which we reviewed all of our business segments. In 2023 we further enhanced our analysis to include analyses of direct and indirect costs due to carbon policies along ICL’s value chain. The process incorporated exploring potential transition risks and opportunities for our various business segments. Most notably, our analysis included major market trends and potential technological challenges and opportunities for the foreseeable future. Our emphasis on product development and our investment in innovative, advanced technologies positions ICL to remain competitive throughout the transition period, with expectations of benefiting from our current strengths in the areas of energy storage for renewable sources, electric mobility, alternative proteins, high-efficiency specialty fertilizers and low carbon products across our portfolio. These products and services support climate-change mitigation and adaptation. Many are necessary in terms of resilient agriculture and enhancing food security in a changing world, impacted by climate change.
Utilizing plausible scenario modeling, we have identified potentially impact transition risks and opportunities for the short, medium and long-term which are presented in Table 2 below.
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Table 2: Examples of climate-related transition risks and opportunities for ICL.
| Transition risks | Description and Response |
Policy & legal Carbon pricing mechanisms | Risk description:Regulatory developments in countries or jurisdictions where we operate, exposure to carbon trading schemes, cross-border tax and adjustment mechanisms, increases in existing carbon pricing, and carbon taxes on energy and supplies are expected to lead to increased costs for ICL. Since carbon pricing mechanisms are still in development in most areas globally, it is expected that the risk exposure will increase over time. ICL response: In recent years, we have undertaken proactive measures to reduce ICL's carbon footprint as part of our decarbonization roadmap that includes increasing energy efficiency and transitioning to lower carbon energy sources. We have already achieved a 22.2% reduction in scope 1-2. Consequently, we are actively improving our understanding of our GHG emissions' impacts and actively striving to reduce GHG emissions throughout our value chain enabling us to reduce our exposure to carbon pricing risks. In 2023, we conducted an analysis to quantify the risks arising from carbon pricing mechanisms on both our direct (Scope 1 & 2) and indirect (Scope 3) operations. Our aim was to comprehensively understand the financial risks across diverse scenarios and timeframes. The analysis outputs will improve our financial preparedness and planning and foster strategic decision-making to mitigate risks linked with carbon pricing transitions. We will further mitigate exposure to this risk by incorporating the outputs of the analysis into our decarbonization roadmap. Time horizon: STEPS – 2030, 2040 and 2050 Potential impact:Medium to high, particularly within the 2050-time horizon. |
Reputation Increased stakeholders concern regarding environmental performance | Risk description: There has been an increased focus, including from investors, the public, and governmental and non-governmental authorities, regarding environmental, social and governance (ESG) matters, including with respect to climate change and GHG emissions. As ICL operates in a carbon intensive sector, increased stakeholder concerns and expectations regarding operational and product-related environmental performance could have an impact on our reputation (preference for our products or investor confidence). ICL response: ICL’s commitment to ambitious climate targets is aligned with the Paris Agreement. Therefore, in recent years we have undertaken proactive measures to reduce ICL's carbon footprint and actively improved our understanding of ICL’s GHG emissions (Scope 1-2-3), coupled with developing low-carbon products and services, raising awareness and creating the proper governance structure to support climate related risks and opportunities, and increasing transparency throughout our public disclosure and reports. Time horizon: Medium Potential impact: Medium to high |
Technology Requirements for clean energy | Risk description: We acknowledge that our sector relies heavily on energy, and as the global demand shifts towards greener sources of energy, there is a heightened need to invest in renewable energy procurement. Both external policies and internal targets drive this imperative. However, transitioning to alternative energy sources may result in increased operational costs. ICL response: ICL recognizes the necessity of sustainable energy practices. By entering long term renewable Power Purchase Agreements (PPAs) and utilizing energy attributes certificates (EACs), we adeptly reduce our scope 2 emissions, mitigating energy transition risk and strengthening our portfolio to increase operational resilience. Time horizon: Short-Medium Potential impact: Low |
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| Transition risks | Description and Response |
Technology The ability to implement direct operational reduction measures | Risk description:Increasing global pressures to reduce GHG emissions highlight the necessity for companies to upgrade their infrastructure, ensuring adherence to environmental standards and energy efficiency goals.This could result in increased costs to upgrade and improve ICL's infrastructure, such as energy efficiencies and optimization of production processes, to reduce our direct scope 1 emissions. ICL response: ICL has already initiated a process of addressing this risk by deploying a team of experts internally (our ACE program) which focuses on identifying initiatives to reduce scope 1 emissions through, among others, energy efficiency measures at various ICL sites. In addition, following our commitment to establish science-based emission reduction targets, ICL is currently further investigating abatement initiatives to further reduce our scope 1 emissions in the years ahead, such as green hydrogen production in primary locations. Time horizon: Medium - Long Potential impact: High |
Markets Reduced demand due to chronic changes in weather patterns | Risk description: An increase in the temperature and volatile precipitation, chronic changes in regional climates which can result in shifts in the average growing season, growing conditions and crop mix, may result in reduced demand for commodity fertilizers. ICL response: ICL is actively monitoring market trends and weather-related agricultural growing conditions in regard to climate change. ICL’s believe its diverse products and services portfolio, which supports precision agriculture and other products that contribute to plant resilience, will better support farmers in a changing environment. Time horizon: Medium to long Potential impact: Medium |
| Opportunities | Description and Response |
Markets Increased market demand for sustainable solutions | Opportunity description: We anticipate several market opportunities arising from sustainable novel solutions and shifts in the markets driven by climate change which could lead to increased revenue. These new solutions will also broaden ICL's outlook on new low carbon markets, enhancing our potential for growth and market penetration. ICL response: As a global specialty minerals company, we are keenly observing new market opportunities in sustainable solutions. Our 2023 downstream scenario analysis revealed opportunities in several major global markets for specialty and low carbon fertilizers due to the impact of climate change scenarios on agricultural yields. Based on the analysis projected for 2030 and 2050, we observed escalating demand attributed to climate change-induced alterations in agricultural requirements. Moreover, the increased demand for electricity storage solutions and batteries can be facilitated by our product portfolio. These emerging opportunities position us to expand our market presence and generate increased revenue. Time Horizon: SSP1-26, SSP2-45, SSP5-85 – 2030 and 2050 | Medium to Long Potential impact: Medium to High |
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| Opportunities | Description and Response |
Products and Services Improved product offerings | Opportunity description: We anticipate an increase in consumer demand for products and services that support climate-change mitigation and adaptation, including specialty fertilizers and energy storage solutions, which is expected to propel revenue growth. ICL response: Our products and services cater to the emerging needs of climate-change mitigation and adaptation. Our product portfolio features among others, highly effective specialty fertilizers that facilitate optimal nutrient release that help growers worldwide reduce their fertilizer usage and simultaneously achieve higher quality crops and yields with lower environmental impacts. ICL’s CRFs and bio-stimulants support plant nutrition and minimize N2O emission in the use phase, reducing GHG emissions and supporting climate change mitigation. Furthermore, we anticipate an increase in demand for Energy Storage Solutions (ESS), a necessary step in the transition to renewable energy. Energy storage is a potentially significant source of growth for our phosphate-based and bromine-based specialty products. Therefore, our focus is expanding to include such solutions with our product portfolio, for example, by utilizing phosphate raw materials to produce Lithium Iron Phosphate (LFP). For further information about our sustainable solutions, see "Strategy – Products and Services" above. Climate-change mitigation requires a transition to alternative energy sources. These in return, require energy storage solutions in order to become mainstream. Time horizon: Medium Potential impact: High |
Resource Efficiency & Energy Source Transition to Sustainable Energy Practices | Opportunity description: Maximizing resource efficiency and transitioning to alternative energy sources present an opportunity for ICL. ICL response: ICL has dedicated teams and forums that focus on opportunities in energy efficiency. By prioritizing these initiatives, we anticipate a reduction in operational costs and environmental footprint as renewable energy is projected to be more cost-effective (in part due to lower carbon taxes) compared to fossil fuels. Our strategy involves sourcing and expanding our renewable energy mix, facilitating a shift towards heightened electrification across our operations. Furthermore, we're intensifying our efforts to digitize, and analyse site level GHG data which allows us to improve data management and quality to support our journey to become more resource efficient and to reduce our footprint. Looking ahead, we're exploring the possibility of green hydrogen production at our primary location, aligning with our long-term sustainability goals. Time horizon: Medium - Long Potential impact: Medium |
Resilience Future Resilience | Opportunity description: We believe that increasing the resilience of our Company represents a strong opportunity through initiatives aimed at improving efficiency, designing innovative production processes, and developing new products. These efforts will ensure that we maintain our competitive advantage and remain prepared for a low-carbon future. ICL response: Our approach to advancing sustainable practices significantly contributes to our resilience. Our research, development, and innovation focus on solutions that aim to align with the SDGs. This in turn provides ICL with a long-term vision to pursue major market opportunities, including innovative climate-resilient solutions that enhance business resilience. For more about our sustainable solutions, see Strategy – Products and Services. Additionally, enhanced access to green financing resulting from a reduced Company-wide carbon footprint and clear sustainability strategy, unlocks additional resources that further bolster our resilience. For more about our see Strategy – Sustainable Finance. Time horizon: Medium to long Potential impact: Medium |
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ICL operates in multiple geographic locations that have, or are in the process of implementing, Emission Trading Schemes (ETS) or carbon taxes, as well as applicable Carbon Boarder Adjustment Mechanisms which may impact direct and indirect carbon costs. For 2023, exposure and vulnerability to transition risks for direct (scope 1 and 2) and indirect (scope 3) emissions were examined. For the exposure analysis, carbon prices across 6 scenarios (IEA: STEPS, APS, Net Zero and NGFS: Below 2˚C, NDCs, Net Zero) were considered while vulnerability was determined based on projected emissions (per scope) and either coverage rate at site (Scope 1 and 2) or pass‑through rate by emission category (Scope 3). For our externally assured GHG emissions, see Metrics and Targets section below.
Impacts on direct emissions for ICL are based on defined trajectories at the site level with carbon prices varying from one scenario to another. The output indicates that carbon price impacts on direct emissions will likely increase under all scenarios in the specified time frames as well as evolve over time, as the coverage rates increase for other sites/regions.
In the current scope of indirect emissions, we included relevant emissions categories where the impact is passed through to product suppliers and service providers. Purchased goods and services, end-of-life treatment of sold products and upstream transportation and distribution account for more than two thirds of emissions shares. In our analysis we also divided the indirect emissions in the relevant categories to differentiate coverage rates by scenario and time horizon. This assessment excluded the categories where impacts are passed on via mechanisms other than carbon prices (e.g. reduced demand). As seen with direct emissions, indirect emission impacts on carbon prices vary from one scenario to another. The output indicates that carbon price impacts on indirect emissions will likely increase under all scenarios in the specified timeframes as well as evolve over time, as the indirect emission trajectories mature, and service providers and suppliers are exposed to more direct carbon pricing impacts.
We acknowledge that the application of a scenario analysis to climate related risk is a relatively new and rapidly evolving subject. As part of our TCFD program, we continue to enhance our analysis capabilities to reflect developments in modeling, policy, emission pathways and wider stakeholder expectations. The outputs from our further scenario analysis activities, including carbon price trajectories, will be used to enhance ICL’s existing business planning processes and inform our strategy. It will also be used as an engagement tool to strengthen our understanding of climate related risks and opportunities. We will continue to integrate climate-related issues into our regular financial processes.
Risk Management
At ICL, Enterprise Risk Management (ERM) is ingrained in our corporate DNA and is an essential framework to anticipate and navigate uncertainty, risk and opportunity. Acknowledging risk's inherent nature in all activities, we prioritize robust risk management as a fundamental element of good corporate governance. A successful risk management mechanism helps us meet our goals, enhances our decision-making processes, ensures our robust compliance with regulation and internal policies, and provides assurance regarding control effectiveness.
We are recognizing the impact of climate change throughout our main processes, and we are aligning our responses and actions to meet the accelerating pace of climate change. As part of this recognition, we have embedded climate-risk assessment into global our ERM procedures.
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Identifying and assessing climate-related risks
We have implemented a process designed to identify risks, areas of impact, their causes and potential consequences, including climate-related risks. The aim is to generate a comprehensive list of risks (a risk register) based on those potential events that might prevent, degrade, or delay the achievement of our Company’s objectives. The risk identification process includes an examination of events which, if they materialize, may compromise the achievement of the Company's objectives. Identifying climate-related risks was accomplished by conducting interviews with key personnel, as well as evaluating climate-benchmark and external information on material risks to the industry. This also included implementation of financial stress-test models on multiple climate scenarios to evaluate potential financial impacts. All risks are categorized under a global unified ICL Risk Universe and are evaluated under a unified metrics scale. The risk description includes capturing possible sources of risk, areas of impact and potential consequences (in accordance with risk taxonomy). The risks are identified at several levels (corporate, business segments and operational sites) of the organization. Risk assessment involves applying a rating to a risk, taking into consideration the combination of impact (consequences of the risk materializing) and its likelihood, considering the effectiveness of existing controls.
New risks can arise as a result of change within the organization or the occurrence of external factors. All employees and managers are responsible to contribute to identifying new and emerging risks as soon as practicable, while reporting and escalation will be accomplished according to the ERM framework. In addition, we execute an enterprise risk assessment in order to identify new corporate level and business segment level risks at least every few years and update the Risk Appetite, Risk Register and Risk Universe accordingly.
Managing climate-related risks
One of the purposes of the ERM process is to prioritize and determine our response to mitigate a risk at an acceptable level. This includes identifying, mapping, recording and monitoring treatment actions. Risk treatment actions can have two objectives: reduce the impact (i.e. mitigate the impact of the event); or reduce the likelihood (i.e. prevent the event from occurring).
Risk Treatment (mitigation) action can have two objectives: reduce the impact or reduce the likelihood. Possible risk treatment strategies include- avoid (avoid the risk), mitigate, accept and transfer. Risk mitigation plans are developed for Tier 1 risks and under specific circumstances, mitigation plans will also be developed for Tier 2 risks.
Tier 1 Risks (High-Level/ Material Risks): The designated risk owners are required to develop a treatment plan aimed at mitigating the impact or likelihood of the risk. During the development of treatment plans for top risks, we take into consideration factors such as feasibility, cost-effectiveness, required resources, and the timeline for completion. We ensure that any proposed treatment aligns with legal and governance requirements. The execution of plans is monitored for timeliness. We regularly reassess risk evaluations as an integral part of our monitoring routines established in our Global Risk Policy.
Tier 2 and Tier 3 Risks (Medium to Low-Level Risks): We have established periodic processes to ensure that we capture significant changes in risk exposure, needing further examination.
Monitoring and reviewing risks and treatment plans ensures that risks are managed efficiently and effectively. Therefore, these are monitored on a regular basis in accordance with ICL's ERM routines. For example, Tier 1 risks and mitigation plans are monitored on a quarterly basis.
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An effectively functioning oversight structure ensures that risk owners are designated on a timely basis, communication plans are both coherent and capably executed, sufficient resources are allocated to risk management, and staffing and training practices work as intended. It ensures that managers at all levels are active participants in the risk management process. We update our Enterprise Risk Management Framework & Policy annually. The updated policy is approved by the Risk-Management (RM) Committee and the Board’s Audit Committee. Changes in the policy are reviewed as part of an annual update. As part of that update, the Committees examine the effectiveness and quality of policy implementation and summarize the challenges and improvements required for the practice of the policy.
Metrics and Targets
Metrics
The GHG emissions reported below include all direct (“Scope 1”) and indirect energy-related (“Scope 2”) emissions of primary known greenhouse gases, including: CO₂, CH₄, N₂O and HFCs/HCFCs and SF₆. During previous years reported, there was no consumption or emissions of PFCs or NF₃. Direct emissions include emissions from stationary and mobile fuel combustion, refrigerants, non-energy related process emissions and emissions from onsite wastewater treatment facilities. Indirect energy related emissions include the calculated emissions resulting from consumption of purchased electricity, steam, heating and cooling.
The table below presents our greenhouse gas emissions for the years 2023 and 2018 (the baseline year). We have followed the World Business Council for Sustainable Development (WBCSD)/World Resource Institute's (WRI): "GHG Protocol Corporate Accounting and Reporting Standard" (2004, as updated January 2015); and “GHG Protocol Scope 2 Guidance” (2015), utilizing the operational control approach to set organizational boundaries, in addition to ISO 14064 standard methodologies. An independent assurance process was performed, which included Limited Assurance of ICL’s 2023 Total Scope 1 and Total Scope 2 (marked-based and location-based) GHG emissions, in accordance with the International Standard on Assurance Engagements ISAE 3000 (Revised) ‘Assurance Engagements other than Audits or Reviews of Historical Financial Information’.
Scope 1 & 2 GHG emissions
Year 2023 (3) | Year 2022 (2) | 2021 | Year 2018 (1) | 2022 VS 2018 | ||
| Scope 1 | Tonnes CO2e (thousands) | 2,102 | 2,126 | 2,158 | 2,220 | (5.3)% |
Scope 2 Market-based | Tonnes CO2e (thousands) | 186 | 281 | 380 | 720 | (74.2)% |
| Total scope 1+2 GHG emission | Tonnes CO2e (thousands) | 2,288 | 2,407 | 2,538 | 2,940 | (22.2)% |
| (1) | 2018 is the baseline year for ICL’s decarbonization roadmap. |
| (2) | On a “same site basis” (excluding facilities acquired in Brazil during 2021), 2022 Scope 1 and Scope 2 (market-based) emissions were 2,107 and 281 thousand tonnes CO2e, respectively. |
| (3) | 2023 independent assurance process was performed in accordance with the International Standard on Assurance Engagements ISAE 3000 (Revised) |
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*Greenhouse Gas Emissions - Scope 1 and 2 emissions, in thousands of CO2e tonnes.
The 22.2% reduction in emissions was achieved over the period of 2018 to 2023 through multiple actions, including commissioning our Sodom CHP (Combined Heat and Power) plant, implementing energy efficiency measures and utilizing waste heat in several facilities globally, decommissioning fossil fuel-based facilities, such as the PAMA oil shale power plant in Israel, and procuring renewable energy in Brazil, China, Europe, Israel and the US. Sodom CHP supplies most of the electricity and steam consumed by ICL’s sites in Israel, with significantly lower carbon footprints. The electricity generated is not only far more carbon efficient than electricity supplied by the Israeli grid, but also more efficient than the previous oil-fired power plant and steam boilers it replaced for the production of steam as well as electricity.
Scope 3
ICL completed the process of measuring its Scope 3 emissions for the year 2022 in accordance with current best practices while implementing state-of-the-art data management systems. The process was followed by an external assurance process thus providing ICL with a baseline for further actions.
The baseline includes all upstream and downstream value chain emissions for primary known greenhouse gases, including CO2, CH4, and N2O, HFCs/HCFCs and SF6 for the year 2022 (1 January 2022 - 31 December 2022). The assessment utilizes an operational control approach to set organizational boundaries and applicable standard methodologies. An independent limited assurance engagement was performed in relation to selected Scope 3 GHG emissions categories in accordance with ISO 14064-3: 2019 Greenhouse gases – Part 3: Specification with guidance for the verification and validation of greenhouse gas statements.
RD&I
Our RD&I strategy identifies megatrends for future focus and considers the UN SDGs. Consequently, topics such as zero hunger (SDG 2), affordable and clean energy (SDG 7), responsible consumption and production (SDG 12) and climate action (SDG 13) are a focus of our Company. ICL Open Innovation efforts focus on partnering with entrepreneurs, startups, and researchers to develop next-generation fertilizers for advanced crop nutrition in response to climate change. Areas of focus include next generation fertilization, food technology, E-mobility/sustainability, novel materials, Circular Economy, industry 4.0 (manufacturing optimization) and digital agriculture.
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We continue to invest in research and development activities to meet many of the challenges posed by climate change. These focus on climate-change mitigation, climate-change adaptation, sustainable water use, and a transition to a Circular Economy. Examples of the R&D in which ICL is currently engaged include:
Development of fertilizers with better nutrient-use efficiency and reduction of emissions.
Development of biological bio-stimulants that stimulate plant growth and provide resilience to various stress conditions.
| • | Development of productsthat improve water use efficiency. |
Investigating opportunities to integrate waste steams into our production processes, fostering a closed-loop circular economy and developing future sources for sustainable fertilizer products.
Including integration of secondary source Phosphate technologies (Circular Economy) for immediate use in our production facilities in Europe and development of future sources for our fertilizer products, including a technology road map for recycling and recovery of phosphorous and nitrogen from secondary sources to transform our products into sustainable fertilizers.
Continued diversification and development of a product portfolio of meat substitutes: ICL and Plantible Foods have partnered to launch ROVITARIS® Binding Solution, a revolutionary clean label binding solution for plant-based meat and seafood applications that may replace most chemically processed binders.
Development of a battery materials portfolio that includes Lithium Iron Phosphate (LFP) cathode active material, brominated electrolytes and Phosphorus based active salt for electrolytes for current generation and next-generation lithium-ion batteries (Energy Storage Solutions).
| • | The Front-End Innovation group has scouted more than 500 food tech start-ups to identify disruptive technologies for ICL Phosphate Specialties. Following the investment in Protera SAS and Plantible Foods Inc., ICL Planet Startup Hub invested in Arkeon GmbH, a start-up converting CO2 into nutritious amino acids and sustainable protein. The teams continue to seek innovation partners in transformation of sustainable food systems. |
We developed a data-driven impact and evidence assessment tool for all RD&I projects to maximize ICL’s actions on tackling climate change, advancing food security and other contributions to human health and wellbeing. This decision-making tool is integrated into the product development process. In 2023, we completed six case studies and incorporated this tool into our new product development process.
Targets
In 2020, we established a decarbonization roadmap to achieve net zero GHG emissions by 2050. The near-term milestone is to reduce Scope 1 and 2 GHG emissions by 30% by 2030, compared to our 2018 emissions baseline. ICL’s 2023 Scope 1 & 2 emissions are 22.2% lower than our 2018 emissions and on course to meet the 2030 target successfully. ICL supports the global effort initiated by the Paris Agreement to reduce GHG emissions.
In 2022 ICL’s Board approved the submission of a declaration to the SBTi organization, wherein the Company will commit to set a near-term, science-based target in accordance with the framework developed by the SBTi organization. The initiative drives ambitious climate action in the private sector by enabling organizations to set science-based emissions reduction targets. Following the declaration, we intend to complete the processes of submitting our decarbonization plan to SBTi, moving past a 30% reduction within the required time frame for SBTi's validation.
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ICL has already implemented several measures included in its decarbonization roadmap, including:
Commissioning a high efficiency gas-fired combined heat and power (CHP) plant at our Sodom facility to supply ICL’s facilities in Israel, replacing older oil-fired power generation systems.
Transitioning to the procurement of renewably generated electricity across all ICL sites, starting with the procurement of renewable electricity for ICL sites in Europe and expanding to sites in the US, Israel, China and Brazil.
Decommissioning our oil shale-based power generation at Rotem (Israel), in favor of a more efficient gas-fired power plant with significantly lower GHG emissions.
Recovering heat from various chemical reactions to produce zero emission power for utilization by ICL sites.
Other measures in our Decarbonization Roadmap for future implementation include:
Improved measurement of GHG emissions, including increasing the accessibility to site-level carbon metrics and analytics for our operational managers and management through digital dashboards for up-to-date reporting of emissions at site and product levels.
Eliminating or reducing process GHG emissions through changes to chemical processes and production lines.
Converting our remaining production facilities that utilize high-emitting fossil fuels to energy generated from natural gas, renewable sources and waste heat.
Increasing energy efficiency by phasing out inefficient production technologies, streamlining our production facilities, increasing the efficiency of our consumption of heat and steam, and recovering heat where possible.
Reducing the use of electricity for lighting and air conditioning by implementing more efficient technologies.
Installing solar photovoltaic (solar PV) electricity generation systems in all available and appropriate areas within the operational boundaries of our sites in Israel, Spain, Germany and other countries.
Considering carbon pricing in product development, acquisitions and capital investment decision-making to raise internal awareness, promote better life cycle operating decisions, and better prepare our business for future emissions trading schemes.
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Energy
Our energy strategy includes continuous emphasis on energy efficiency and process innovation, transition to zero and low emission sources, and electrification as an enabler for this approach.
Renewable Energy
As part of our focus and efforts to increase renewable energy in our energy mix, ICL has a cross-organizational team which consists of representatives from the Global Procurement Organization (GPO) and our Operational Excellence and Sustainability units.
In parallel, we have a cross-organizational team leading the effort to purchase electricity produced by renewable energy, as well as make capital investments to install onsite renewable energy production at our facilities. In alignment with our climate strategy, the Company entered long-term power purchase agreements with two Israeli companies for "green electricity".
In addition, we conducted several feasibility studies across Europe and Israel in 2021 to identify which of our site assets are suitable for Photo-Voltaic (PV) installations, and in 2022 we expanded our assessment to our North American operations. Our other main sites, predominantly in Brazil and China will be assessed in 2024. Broad implementation of PV in Israel is hindered by statutory challenges, however, there are certain projects that have been approved and construction has commenced.
In the long-term, we are looking to implement projects that are compatible with our 2050 net zero goal. As we expect these types of projects to include major infrastructure challenges, we have already initiated them. One of the major projects that we are currently launching is a PV plant combined with advanced storage solutions and green hydrogen production at our Sodom site in Israel. Green hydrogen is defined as hydrogen produced by hydrolysis of water into hydrogen and oxygen using renewable electricity. The techno-financial analysis of the project has been submitted and endorsed, and the project will proceed to Basic Design (FEED).
Natural Gas
Over the past decade, we made a strategic decision to replace heavy fossil fuels (fuel oil, kerosene, diesel and shale oil) that power our largest production plants in Israel with natural gas (NG). Rotem Israel has ceased extracting shale oil minerals and has begun to use a new natural gas-based steam boiler, resulting in a reduction of our GHG emissions and other pollutants. The transition to NG has also significantly reduced our emission of air pollutants, such as NOx and PM, in the areas surrounding our sites.
For more information regarding our natural gas agreements, see Note 18 to our Audited Financial Statements and "Item 3 – Key Information - D. Risk Factors".
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The European Energy Efficiency Directive (EED)
In September 2023, the European Commission published the recast of the EU Directive on Energy Efficiency effective October 10, 2023. This is aimed at further stimulating efforts to promote energy efficiency and achieve energy savings in the battle against climate change. This initiative is part of the EU’s measures to reduce greenhouse gas emissions by 55% by 2030 and become climate-neutral by 2050. The directive has established a legally binding target to reduce the EU’s final energy consumption by 11.7% by 2030 (relative to the 2020 reference scenario). Each Member State is required to set its indicative national contribution based on objective criteria that reflect its national circumstances. If the total national contributions do not meet the EU target, the Commission will apply an Ambition Gap Mechanism.
The EED directive requires increasing annual energy savings from 0.8% (at present) to 1.3% (2024-2025), then 1.5% (2026-2027) and 1.9% from 2028 onwards. That’s an average of 1.49% of new annual savings for the period from 2024-2030.
We expect that each EU Member State (MS) will set its indicative national contribution, following which we will develop plans and strategies to comply with these requirements for all our European operations going forward, including considering further acceleration of our transition to renewable energy sources.
Air Quality
Reducing air emissions is a central goal of our environmental strategy. We are taking steps to reduce air emissions by implementing emission prevention solutions and switching to cleaner fuels. Our sites regularly monitor their emissions of pollutants to better manage our operations.
Israel
In Israel, air emissions from major industrial operations are regulated by the Clean Air Law (hereinafter - the Law) which aims to improve air quality, prevent and reduce air pollution by implementing both prohibitions and obligations, and protect the health and quality of life of human beings and the environment. The Law addresses emission sources (including all our production plants in Israel) and is intended to serve as a platform for implementing the regulatory principles currently in place in the European Union (EU), specifically the principles of the IED (The Industrial Emissions Directive) adopted by the EU.
Our plants in Israel that fall under the definition of Emission Source Subject to Licensing Requirements have received air emission permits. In the event of deviations from the emission permits’ conditions, we could be subject to shutdowns, administrative enforcement measures, as well as to criminal liability. Certain restrictions on our operations and significant capital investments may therefore be imposed on our Company. To comply with the emissions permits granted under the Law, we have made significant investments, and will continue to do so as necessary. As a result, some of ICL’s air emissions have decreased considerably.
DSW and DSM are implementing major dust reduction projects, some of which have already been initiated and are expected to be completed over the next few years. Our other production sites in Israel are also increasing their efforts to reduce particle emissions.
In January 2024, a new emission permit was issued to Rotem Israel under the Israeli Clean Air Act (hereinafter - the Law) valid until January 2031. The Company is in active discussions with the Israeli Ministry of Environmental Protection (MoEP) to assure adherence to all stipulations outlined in the permit, including the conditions specified in the administrative order under Section 45 of the Law, and to achieve satisfactory resolutions to notable timeline execution challenges for a limited number of projects. Rotem Israel is implementing several significant emissions reduction projects as required in the permit, through a multi-year plan. For further information, see Note 18 to our Audited Financial Statements.
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Europe
In Europe, emissions are regulated under the EU IED – Industrial Emission Directive, as well as regional and local regulations. Preventive measures are applied. These regulations are translated to national legislation. Emission limit values for relevant substances are included as part of the authority's approval. In addition, relevant emissions control is carried out by authority inspection through independent technical supervisory associations and by self-inspection. Relevant plants in the EU are subject to the European SEVESO directive which requires regular safety inspections and reports.
Americas
Air emissions in the Americas are managed through operating permits issued by the relevant agency responsible for each individual site. In the US, air permits are issued under the authority of the US Environmental Protection Agency’s (EPA) Clean Air Act. In Brazil, air emissions are managed under the site’s operation license issued by the relevant state environmental agency.
China
Air emissions in China are regulated in accordance with the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution and the Regulations on the Management of Pollutant Discharge Permits.
Water
We regard potable water as a high value natural resource and water conservation is an inherent part of our business culture. We expect potable water to become scarcer across the globe. As water scarcity becomes a pressing global issue due to climate change and other factors, we expect greater and stricter regulation of water consumption and wastewater quality. We also anticipate that we will need to invest in additional resources to enhance our water efficiency and wastewater quality at some of our plants.
Nevertheless, many of our major production sites are located in Israel which has achieved water supply security due to large investments. Though located in a water stressed region, Israel manages its water resources efficiently. Due to institutional and regulatory reforms and significant development of non-conventional water sources, such as treated wastewater and desalination, water production capacity in Israel exceeds demand. Accordingly, over the last two decades desalination plants and Reverse Osmosis (RO) plants have become major contributors to the country’s potable water resources, thereby reducing potable water scarcity and water stress risks in the country. Industrial facilities, such as our facilities in Sodom, are allowed to use non-potable water where possible.
Our production facilities have already undertaken various water conservation projects, including using of brackish water and recycling treated wastewater. We track the consumption of water at our facilities worldwide and promote the implementation of water efficiency projects.
In 2023, ICL’s Board approved an ICL Group Water Management Policy. The policy outlines our proactive approach and considerable efforts to enhance our water efficiency, reduce our impact on water sources, and advance innovative solutions to water usage and wastewater disposal challenges in the areas in which we operate. Regarding Board-level oversight, our CSC Committee is responsible, among other things, for ICL’s water management.
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On the executive management level oversight, the Potash Division’s president and Global EHS, is responsible, among other things, for ICL’s overall water management.
For further information about water-related issues in Israel, see Note 18 to our Audited Financial Statements.
Wastewater, By-products, Waste & Hazardous Waste
We track and manage our waste streams and take various steps to reduce waste. We identify and seek to maximize potential reuse and recycling of relevant waste streams and are proactive in searching for Circular Economy opportunities. For further information, see the “Circular Economy” section above. During production processes at our facilities, industrial liquids and solid wastes are produced. Storage, transportation, reuse and disposal of waste are generally regulated by governmental authorities in the countries in which we operate. Wastewater quality and quantities must comply with local regulations and with permits at relevant sites. We strive to implement zero discharge policies where applicable. Various production sites have adapted their treatment systems to the standards applicable to them. We track and manage our waste streams and take various steps to reduce waste or identify and maximize potential reuse and recycling of relevant waste. Most of the waste is either directly treated by us or treated by external certified vendors.
Although we strive to reduce the likelihood of wastewater leakages and unexpected hazardous materials or solid waste releases, we may not always succeed in preventing such incidents from occurring due to various factors that are outside of our control. In the event of difficulties in the reuse or disposal of waste generated in our facilities, interruptions or production stoppage may occur and significant costs may be incurred. If we cannot properly mitigate and reduce the exposure, our operations may be adversely and materially affected.
For further information, see “Item 3 - Key Information— D. Risk Factors“.
Israel
Liquid and solid waste, as well as other emissions, are regulated by multiple regulations. Our plants in Israel implement waste monitoring and management measures. Each plant is required to inform the authorities on their amount of waste and their treatment method for every waste stream under Israel’s PRTR (Pollutant Release and Transfer Register) regulation. Wastewater regulations, including effluent limits, are regulated by the MoEP, as well as partly by local authorities.
Pursuant to the conditions set by the MoEP in their Toxins Permits, our plants in Israel have conducted historical land contamination surveys which were submitted to the MoEP.
ICL Dead Sea (DSW) - Salt by-product is transferred to a large open-air depot in proximity to DSW’s site. The open-air depot's dimensions (height and area) are limited by statutory requirements. DSW is examining alternatives for salt storage/treatment.
Rotem Israel - The site is implementing a master plan for wastewater treatment, with the principal goal of reducing effluent quantities. This will be accomplished by converting some effluents into products, wastewater recycling, reducing water consumption, treatment or neutralization of wastewater and restoration of wastewater ponds. The plan includes the treatment of additional wastewater streams created by air emission purification processes, which are required by the Israeli Clean Air Law.
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As part of the treatment of liquid and solid waste, the site stores phosphogypsum waste in ponds and piles. In 2021, a new Urban Building Plan was approved, the main objective of which is to regulate areas for phosphogypsum storage reservoirs.
Regarding the phosphogypsum waste ponds, the new plan allows the use of Pond 5, which has been operating since 2018, until the end of its operational life, expected in 2025. The District Committee for Planning and Construction approved the submission of a plan to reuse Pond 4 under certain conditions in order to replace Pond 5 upon the end of its operational life. Following the completion of the planning stage for construction and landscape restoration of phosphogypsum Ponds 1 to 3 that were used by Rotem Israel in the past, ICL has begun the early phase of restoration.
Regarding the phosphogypsum waste piles, according to the regulatory requirements, future expansion of the storage piles should be positioned on new protective infrastructure by the end of 2025. In September 2023, the Company submitted its plan for restoration of these large storage piles, including the set methodologies as required by the various regulators. Rotem Israel is experiencing difficulties meeting some of the requirements’ deadlines and is working with the relevant parties to mitigate the gaps. Furthermore, Rotem Israel is striving to find alternative uses for the phosphogypsum with external industry partners.
Neot Hovav - Pursuant to the requirements of the MoEP, our Neot Hovav site is required to treat remnant hazardous waste in the coming years. This waste is stored in a designated defined area on the site's premises in coordination with the MoEP. Some of the currently produced waste is also stored in this area. Treatment of this waste is partly conducted through a combustion facility (Bromine Recovery Unit), which recovers hydro-bromine acid. Additional waste quantities are sent to external designated treatment facilities. Once the area is cleared, the Company will be required to conduct soil surveys. For further information, see Note 17 to our Audited Financial Statements.
ICL Periclase - The site is working to reduce remnant Magnesia waste stored in a designated waste area, and to reuse it for the benefit of a Circular Economy. During 2023, ICL Periclase implemented a project that uses magnesia powder, a non-hazardous material, to fill sinkholes in the Dead Sea region. This approach will continue as an ongoing process in the future.
ICL Haifa (F&C) – Following the MoEP's requirements to find an alternative to runoff collection-pond, it was suggested to install above-ground containers for collecting runoff water. The issue is still under deliberations with the MoEP subject to the new statutory plan for the Haifa industrial zone.
The production process of phosphoric acid produced in the 1990’s at a site which has since been shut down has created a by-product in the form of a phosphogypsum pile which is stored at the site. The Company is working in coordination with the MoEP and is taking the necessary actions to meet regulatory requirements in a timely manner, including as stipulated in the Toxins Permit issued to the site.
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Europe
Liquid and solid waste and effluents are regulated under the European IED – Industrial Emission Directive. The Company implements waste monitoring and other management measures, the results of which we are obligated to inform the authorities. Wastewater regulations, including effluent limits, are regulated by states and partly by communities. We are subject to provisions regarding the avoidance of pollution and conditions for assessing compliance with effluent limit values.
Wastewater is partly pre-treated and sent to municipalities and third parties for final treatment, before discharge, or at levels that can be discharged to surface waters without treatment. In the event solid waste must be disposed we strive to treat it in accordance with relevant European requirements.
ICL Iberia - A multi-year program is underway to restore large salt piles, while paying close attention to the issue of wastewater drainage and sludge treatment. In April 2021, the Company signed an agreement with the ACA, Catalan Water Agency, for the construction and operation of new collector infrastructure. The new collector is required for the removal of brine water that will be used for restoration, as well as for production. For further information, see Notes 17 and 18 to our Audited Financial Statements.
ICL Boulby - All wastewater leaving our site in the UK is permitted according to the UK’s Environment Agency. The site's wastewater consists of extracted sea water, mine brines, gathered surface rainwater and water treated at the onsite sewage plant. Multiple parameter limits are imposed on the site by the wastewater permit and wastewater amounts have since been reduced considerably.
Americas
Liquid and solid wastes at our Americas sites are managed in accordance with country and state-specific regulatory requirements. In the US, solid and hazardous wastes are regulated by the Environmental Protection Agency’s (EPA) Resource Conservation and Recovery Act and analogous US state laws. In Brazil, waste is managed under the site’s operation license issued by the relevant state environmental agency.
ICL follows a qualification process for waste vendors who assist us in ensuring that waste is properly profiled, treatment standards are followed, and disposal processes meet regulatory requirements. Wastewater is managed by site industrial discharge permits from federal, state or local agencies. Wastewater treatment is mainly focused on chemical treatment through systems that are maintained on a regular basis.
ICL US Gallipolis Ferry - In January 2023, the site entered into a Consent Order with the West Virginia Department of Environmental Protection (WV DEP) regarding water discharge, allowing for a plan to be developed and executed in order to comply with permit requirements. We executed the proposed plan and milestone schedule on a timely basis. As one milestone was found not to be a viable action to maintain permit compliance, we proactively proposed an alternative plan and currently await the reply of the WV DEP regarding their receptivity to our proposal.
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China
According to the Law of the People's Republic of China on the Prevention and Control of Solid Waste Pollution and the National Catalogue of Hazardous Waste, solid waste is collected, stored and transferred. General industrial solid waste is entrusted for comprehensive utilization by qualified organizations, and hazardous waste is entrusted for treatment by organizations with a Hazardous Waste Business License issued by the Department of Ecological Environment of Yunnan Province.
YPH: All wastewater at YPH, after physical or chemical treatment, is reused in the production system with zero discharge.
Ecological Impact
We manage our mineral extraction sites according to local regulations, and we depend on concessions that are granted to us. Our broad and varied operations cover the entire lifecycle of our products, from the initial production of raw materials through manufacture of final product. This is becoming more challenging as the population grows in proximity to our sites. To try to minimize any unexpected disturbances by our facilities on their surrounding communities, we have increased our efforts to take precautions and safety measures in our activities, especially those which involve hazardous materials.
We aim to minimize the ecological impact of both our mining and production activities, beginning at the initial stage of planning through the implementation of recommendations and finally by monitoring and minimizing their impact. We continuously implement relevant operational methodologies and necessary technologies aimed at preventing unexpected ecological impact. In the event of an ecological impact, we strive to mitigate and remediate the impact, in accordance with best practices and regulatory requirements, including coordination with the relevant local authorities. For further information, see “Item 3 - Key Information— D. Risk Factors ".
It should be noted that our Sodom production facility is in the Jordan Rift Valley, or Syro-African Depression, a seismically active area. For further information, see “Item 3 - Key Information— D. Risk Factors ".
ICL DSW – Due to the negative water balance, the water level in the northern basin of the Dead Sea is decreasing. The receding water levels over the years has required ICL to reposition its pumping station northwards to enable continued operations in the Dead Sea region, which also enables the existence of tourism infrastructure. The P-9 pumping station and feeder canal crossing the Tze’elim stream were constructed to maintain operational continuity. The Tze’elim stream alluvial fan is one of the largest and most developed of all the surviving fans in the area, and therefore it is important to preserve it and to protect the biodiversity existing in this habitat. ICL reached an agreement with environmental authorities and organizations according to which seven culverts were constructed above the excavated canal to allow flood waters to flow through the original flow channel without damaging the feeder canal, while maintaining the braided channel fan pattern. The culverts serve as an ecological corridor by providing passageways for animals. We periodically review field data and make adjustments in accordance with the findings. In March 2023, we completed a project at the request of the Israeli Nature and Parks Authority involving the installation of sealing sheets over an approximately 2km-long section of the 15km feeder canal in the area of the fan following an unexpected flow of brine which was discovered above ground at the outskirts of the alluvial fan area. For further information, see “Item 4 – Information on the company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations- Dead Sea” and Note 18 to our Audited Financial Statements.
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ICL Iberia - ICL Iberia’s past activities have resulted in the salinization of some water wells in the Suria and Sallent sites. This resulted in compensation claims from owners of land surrounding the sites.
Rotem Israel - In 2017, Rotem experienced an environmental incident in which acidic phosphogypsum liquid was released into the surrounding environment, including a nature reserve and the nearby Ashalim Creek (Nahal Ashalim) as a result of a breach in its Number 3 detainment pond. We took extensive actions to restore the creek to its prior state, in full cooperation with the relevant authorities.
Following the incident, several certifications of claims as class actions were filed against the Company, and to the best of our knowledge, a criminal investigation of the event is still pending.
In December 2022, following a mediation process between Rotem Israel and the INPA, as well as all other applicants, a settlement agreement was signed between the parties and later approved by the District Court. In January 2024 the Supreme Court rejected an appeal filed against the District Court's ruling and concluded the proceedings. For further information, see Note 18 to our Audited Financial Statements.
Rotem Israel is currently in a process of remediating its phosphogypsum ponds according to an approved engineering remediation plan, that was formulated based on the ‘Florida Standard’. After reaching an agreement with the authorities on landscape restoration and obtaining a building permit, ICL initiated the first phase of the restoration.
In 2020, an application for a class action was filed against the Company according to which, discharge, leakage, and seepage of wastewater from Rotem’s Zin site allegedly resulted in various environmental hazards and damage to the Zin stream. In November 2022, the parties signed a procedural arrangement to resort to a mediation process in an attempt to reach its goal settle the dispute outside of zero accidents. court. For further information, see Note 18 to our Audited Financial Statements.
ICL R&D Beer Sheva - A soil survey was conducted, the results of which point to soil contamination. ICL is acting in accordance with the survey's findings and related MoEP guidelines.
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lCL Periclase - Brine, a non-hazardous substance, leaked from a ruptured pipeline in a nature reserve. No significant damage was recorded. Several hundred meters of pipelines were replaced, and we intend to replace additional pipelines within the Dead Sea Works area by the end of 2024.
Brazil - After conducting soil surveys at our Brazilian sites, we identified some immaterial historical soil and groundwater contamination. In response, we are actively engaged in remediation efforts, while maintaining close cooperation with governmental agencies and local regulators.
Biodiversity
Biodiversity, also called biological diversity, is the variety of life found in a place on Earth. A common measure of this variety, called species richness, is the count of species in an area. We recognize the need to make an evaluation of its productsconsider environmental factors when using land and managing our operations, particularly in ecologically sensitive areas, including areas with unique cultural value. We are committed to manage the responsibility thereof over their entire lives. The Company makes an ongoing and consistent assessmentconsideration of the risksimpact of our activities on biodiversity in our decision making.
Examples regarding our management of biodiversity at some of our mining sites includes the following:
ICL DSW - Sodom Saltmarsh Lake. The Ashalim reservoir, located south of ICL’s Dead Sea site is a wet habitat, situated within a typical arid habitat. It is abundant with rich biological diversity. ICL Dead Sea, whose excavations in the region created this wet habitat, takes extra measures to preserve it and invests in making this unique habitat accessible to the public. In the past, the Sodom salt flats area was a resting stop and habitat for migratory birds. Today, due to changes in the land’s use for agriculture, residential and industrial purposes, almost no salt flats remain. These flats have unique characteristics with high salinity in the soil and unique species that have adapted to these extreme conditions. The salt flats in Israel are a rare habitat and have been shrinking over time. The Sodom Saltmarsh Lake has become a salt flat substitute. Over the past few years, the lake has had relatively good water quality year‑round and we are continuously monitoring the lake to measure its new chemical products priorwater quality. Vegetation has also been planted in a stable water environment. The lake is now used as a resting spot for migrating birds and as a nesting site for a wide range of species.
Rotem Israel - Since 2016, Rotem Israel has been participating in academic cooperative research with Ben Gurion University of the Negev which examines the ecological and biodiversity effectiveness of mine reclamation. The parameters being researched include soil chemistry, soil microbiology, vegetation growth potential, abundance, arthropod animals and remote sensing land analysis. Following the initial research results and as part of the rehabilitation process, we are creating micro-topography to entering them intodiversify the commercial stage. In addition, existing products undergo an evaluation process at every stage in their production process and supply chain. ICL allocates resourceslandscape. We also collected seeds from the field to research and gathering of sufficient information and data with respect to its productscreate a seed bank in order to create a full characterizationcontribute to the rehabilitation and recovery of their safety features with reference to human health hazards and environmental threats.vegetation in reclaimed areas.
We are strongly committed to bringing safe products to the market that also have a reduced environmental impact, and we ensure full compliance with all regulations, laws, conventions, statures and standards related to chemical management. Accordingly, scientific information is generated on all our products in GLP-certified laboratories using worldwide testing guidelines (OECD, OPPTS). This includes physico-chemical properties, toxicological and environmental tests. The generated data ensures safer chemicals for people and the environment. The data incorporated into a formal dossier including chemical safety assessment which is submitted to relevant regulatory authority for evaluation and approval.
We are also devoted to communicating accurately information that reflects the scientific evidence used in making the hazard determination. Hazardous products produced or imported by ICL are classified in accordance with GHS/CLP criteria, and information concerning the classified hazards is transmitted to ICL customers and employees. The transmittal of information is accomplished by means of comprehensive hazard communication documentation including Safety Data Sheets (SDS), labels, letters to customers, declarations, and safety cards for employees. Emergency contacts for all regions appear on all our SDSs and labels.
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Safety and Environmental Stewardship of Chemicals
ICL’s brand promise is to create impactful solutions for humanity’s sustainability challenges by leveraging our unique resources and technological ingenuity. As stated above, we are committed to the UN’s SDGs. ICL’s approach to developing new products and services is reflected in the alternative processes that we are applying. ICL’s RD&I practices have evolved in its perspective over the past few years, from supporting business continuity to adopting a “Sustainability Index” when developing new products. The index includes a GO/NO-GO decision-making analysis based on defined environmental criteria in the development of new products. We also incorporate Green Chemistry principles. The index was developed as a quantitative model for products in development, and its purpose is to set parameters for sustainable products in the development stage. We combine environmental, health and safety criteria with commercial and operational considerations. Potential products are rigorously tested using the index for product development. Index methodology is implemented in the R&D units of our Industrial Products, Phosphate Solutions and Growing Solutions segments. Each segment has its own specific variations to match its specific product types. Based on rating results, changes are incorporated into the development process. The objective is to develop the most sustainable products for the specific intended use. Products that are categorized as “NO-GO” are discontinued in the development stage and are not commercialized.
The next phase of our evolution includes using the UN SDG’s as conceptual guidelines in our RD&I strategy. Our RD&I unit is embedding impact strategy and criteria. The unit has developed a data-driven Impact Assessment Tool for all RD&I projects to support ICL’s actions on tackling climate change, advancing food security, promoting sustainable agriculture and contributing to human health, safety and wellbeing. This strategic component is part of our positive impact product development processes. We are also implementing Circular Economy and biomimicry concepts to reduce our environmental impact. Through our impact assessment tool, we scope potential and risk, define and optimize the potential for positive impact, and establish clear and measurable goals which are monitored and reported.
In addition, we are addressing various Green Chemistry principles both in the development of new products, as mentioned above, and during the use phase of our products. One example is our SAFR®-A Systematic Assessment for Flame Retardants. For our industrial products, we recommend best practices for using many of our products as part of the service we provide to our clients. The SAFR® methodology developed by ICL provides an evaluation of flame retardants in their applications, enabling users to select the most sustainable product for the intended use. SAFR® incorporates an estimated exposure component based on the level of contact to humans and/or the environment and other productsmeasurable potential emissions of flame retardants during their use. The assessment of a given flame retardant with SAFR® leads to the identification of uses that are either recommended, acceptable, not recommended or an unacceptable hazard in which case alternatives should be identified. We are planning to add chemical attributes that identify the best choice for End of Life, Recyclability and Re-use. This will make the SAFR® tool better equipped to support Circular Economy.
As a global specialty minerals company, we are assessing possiblesubject to multiple rules and regulations in terms of product safety. We ensure that the substances we produce and sell are handled in accordance with all such rules and regulations throughout their life cycle. These rules and regulations, among other things, impose limitations on the use of specific chemicals. Below are details regardingsubstances and products, and require us to register and label some of our products. We continuously monitor these rules and regulations and take the main proceedings knownnecessary operational measures to the Company as of the date of this Annual Report.ensure that we remain in material compliance with them. For further information, see “Item 3 - Key Information— D. Risk Factors".
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We are an active member of several industry associations to safeguard our products. The most prominent associations include the International Bromine Council (BSEF) which promotes the benefits of bromine and bromine technologies for society and economy, the North American Flame Retardant Association (NAFRA), which promotes the benefits of flame retardants in the Americas and Canada, and the Phosphorus, Inorganic and Nitrogen Flame Retardants Association (PINFA), which works in partnership with stakeholders (NGOs, environmental entities, consumer associations, scientists, regulators, fire safety experts, user industries, etc.) to ensure the safe use of flame retardant products.
ICL is also a member of the European Chemical Industry Council (CEFIC) and the American Chemistry Council (ACC), where we are members of various task forces to ensure that we remain in compliance with Responsible Care and Sustainability programs.
These collaboration and network activities help us to work and relate to new classifications and regulations in the bromine compounds industry. The trade associations’ group activities, which include ICL, work diligently, to avoid unnecessary classifications with the help of additional external experts in the field of toxicology and other respective disciplines.
New European Fertilizer Product Regulation (hereinafter – FPR)
FPR covers a broad scope of materials, including all types of fertilizers, liming materials, biostimulants, growing media, soil improvers, inhibitors and other blends of these materials. The new regulation requires fertilizer producers to monitor new contaminating elements in fertilizer products. In addition, pursuant to FPR, fertilizer producers will have to demonstrate the ability to track their products to ensure their quality in the production and supply chain. The labelling of fertilizer products will need to change, and conformity assessment methodologies will need to be updated. Moreover, new tolerance levels for fertilizer contaminants are included in the FPR. One area of focus is the level of cadmium in fertilizers containing phosphate. In addition, FPR includes very challenging biodegradation requirements for polymer coatings on controlled release fertilizers. These requirements need to be established by ICL by July 2026 for its continued sale of controlled release fertilizers. We are actively undertaking steps to adjust to these new regulations for all our relevant products.
The topic of biodegradable criteria is high on the agenda. By July 2024 the delegated act must be available, and testing requirements will be known by such date. Our first biodegradable coating is already on the market (eqo.S/eqo.X). ICL is working on additional specific coating materials to cover the biodegradability and the polymeric as well as the microplastic impact.
Micro-plastics
On September 25, 2023, the European Commission adopted measures that restrict microplastics intentionally added to products under the EU chemical legislation, REACH. The new rules will prevent the release to the environment of about half a million tonnes of microplastics. They will prohibit the sale of microplastics as such, and of products to which microplastics have intentionally been added and that release those microplastics when used. When duly justified, derogations and transition periods for affected parties to adjust to the new rules apply.
Our main products which are subject to these requirements are fertilizers, and to a lesser extent, other products such as flame retardants. We are closely observing the changes in requirements to remain in compliance.
PFAS
In a number of countries, a biocidal substance and any product containing it must be registered prior to import or sale in those countries. Sale is limited to those commercial uses for which registration has been granted in a given country.February 2023, The registration is generally for a limited time and needs to be renewed in order to continue selling. In the EU biocides are regulated by the Biocides Products Regulation (BPR) under the EU ChemicalsEuropean Chemical Agency (ECHA). published details of a proposed ban on the production, use, sale and import of some 10,000 PFAS. The regulation has replacedpurpose of the Biocides Products Directive (BPD) which implemented a processban is to keep PFAS out of re‑registration of all existing biocides in the EU market. ICL Industrial Products submitted requestsenvironment. The European Commission is slated to renew registrations for its existing biocides for various uses underpresent the BPD, which allows ICLproposal to continue sales of these products under the BPR while ECHA and Member States performformally in 2025. If passed, it would constitute one of the review. All of ICL Industrial Products’ biocide registration requests are currentlylargest chemical substances bans ever in the stage of evaluation by the relevant Member State performing the review.Europe.
New Chinese Polysulphate standard
In 2021, a new industry standard for Polysulphate (as a fertilizer) was published in China. ICL has defined the options to meet these new requirements dependingand the effect of the new standard on the specific use, in many other countries. ICL has registered all its biocides undersupply of Polysulphate to the USA FIFRA law (Federal Insecticide, Fungicide and Rodenticide Act) and in all relevant states in the US and maintains full compliance under this law. ICL also registers its biocides as needed in all target markets as required by the local regulations.Chinese market.
| 1. | In December 2023, ICL’s Polysulphate STD temporary registration renewal request was rejected. We are in close contact with the Ministry of Agriculture (MoA) on the possibility of extending the registration for the interim period. |
| 2. | We have begun to work on registering Polysulphate under the new category of a soil conditioner. Field trials are currently on-going and will require three years. The results are expected by the end of 2024. |
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The European Energy Efficiency Directive (EED)
In September 2023, the European Commission published the recast of the EU Directive on Energy Efficiency effective October 10, 2023. This is aimed at further stimulating efforts to promote energy efficiency and restriction (REACH) of chemicalsachieve energy savings in the European Union became effective as of June 1, 2007. The regulation applies to both chemicals already on the market, as well as to new chemicals. The regulationbattle against climate change. This initiative is being implemented gradually, between 2008 and 2018, under the authority of the ECHA (European Chemicals Agency). The regulation covers chemicals not regulated under other specific regulations in the EU (e.g. pesticides, biocides, food, pharma, etc).
We expect that each EU Member State (MS) will set its indicative national contribution, following which we will develop plans and strategies to comply with these requirements for all the chemicals relevant for its businesses in EU (production and sale) within the timetables set in the law (2010 and 2013). ICL has also volunteeredour European operations going forward, including considering further acceleration of our transition to lead and prepare a large number of joint dossiers for the entire industry (as a Lead Registrant). ICL is now preparing and in advanced stages of the registrations of substances towards the final deadline under the regulation which is May 31, 2018.renewable energy sources.
Israel
(hereinafter - the Law) which aims to improve air quality, prevent and reduce air pollution by implementing both prohibitions and obligations, and protect the health and quality of life of human beings and the environment. The Clean Air Law addresses inter alia, fixedemission sources (including the Company’s plants)all our production plants in Israel) and is intended to serve as a platform for implementing the IPPC directive that wasregulatory principles currently in place in the European Union (EU), specifically the principles of the IED (The Industrial Emissions Directive) adopted by the European Union in 1996.EU.
DSW and reportingDSM are implementing major dust reduction projects, some of which have already been initiated and are expected to be completed over the Ministry of Environmental Protection.next few years. Our other production sites in Israel are also increasing their efforts to reduce particle emissions.
In January 2024, a new emission permit was issued to Rotem Israel under the Israeli Clean Air Act (hereinafter - the Law) valid until January 2031. The Company is taking steps to implement a plan to address the requirements of the air emission permits in coordinationactive discussions with the Ministry of Environmental Protection.
Europe
In Europe,, emissions are regulated under the EU IED – Industrial Emission Directive.Directive, as well as regional and local regulations. Preventive measures and best available techniques (BAT) are applied. These regulations are translated to national legislation. Emission limit values for relevant substances are included as part of our authority approvals. There are rules guaranteeing protection of air, soil and water.the authority's approval. In Europe,addition, relevant emissions control is conductedcarried out by authority inspection through independent technical supervisory associations and by self-inspection. ICLRelevant plants falling underin the EU are subject to the European SEVESO directive conductwhich requires regular safety inspections and prepare reports.
Americas
Air emissions in the Americas are managed through operating permits issued by the relevant agency responsible for each individual site. In the United States,US, air permits are issued under the authority of the US EPA’sEnvironmental Protection Agency’s (EPA) Clean Air Act. In Mexico, air emissions are managed through the site’s single environmental license or the LAU issued by SEMARNAT. In Brazil, air emissions are managed under the site’s operatingoperation license issued by the Sao Paulo Staterelevant state environmental agency – CETESB.agency.
China
Water
We regard potable water as a high value natural resource and water conservation is tested oncean inherent part of our business culture. We expect potable water to become scarcer across the globe. As water scarcity becomes a pressing global issue due to climate change and other factors, we expect greater and stricter regulation of water consumption and wastewater quality. We also anticipate that we will need to invest in additional resources to enhance our water efficiency and wastewater quality at some of our plants.
Nevertheless, many of our major production sites are located in Israel which has achieved water supply security due to large investments. Though located in a water stressed region, Israel manages its water resources efficiently. Due to institutional and regulatory reforms and significant development of non-conventional water sources, such as treated wastewater and desalination, water production capacity in Israel exceeds demand. Accordingly, over the last two decades desalination plants and Reverse Osmosis (RO) plants have become major contributors to the country’s potable water resources, thereby reducing potable water scarcity and water stress risks in the country. Industrial facilities, such as our facilities in Sodom, are allowed to use non-potable water where possible.
Our production facilities have already undertaken various water conservation projects, including using of brackish water and recycling treated wastewater. We track the consumption of water at our facilities worldwide and promote the implementation of water efficiency projects.
In 2023, ICL’s Board approved an ICL Group Water Management Policy. The policy outlines our proactive approach and considerable efforts to enhance our water efficiency, reduce our impact on water sources, and advance innovative solutions to water usage and wastewater disposal challenges in the areas in which we operate. Regarding Board-level oversight, our CSC Committee is responsible, among other things, for ICL’s water management.
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On the executive management level oversight, the Potash Division’s president and Global EHS, is responsible, among other things, for ICL’s overall water management.
For further information about water-related issues in Israel, see Note 18 to our Audited Financial Statements.
Wastewater, By-products, Waste & Hazardous Waste
We track and manage our waste streams and take various steps to reduce waste. We identify and seek to maximize potential reuse and recycling of relevant waste streams and are proactive in searching for Circular Economy opportunities. For further information, see the “Circular Economy” section above. During production processes at our facilities, industrial liquids and solid wastes are produced. Storage, transportation, reuse and disposal of waste are generally regulated by governmental authorities in the countries in which we operate. Wastewater quality and quantities must comply with local regulations and with permits at relevant sites. We strive to implement zero discharge policies where applicable. Various production sites have adapted their treatment systems to the standards applicable to them. We track and manage our waste streams and take various steps to reduce waste or identify and maximize potential reuse and recycling of relevant waste. Most of the waste is either directly treated by us or treated by external certified vendors.
Although we strive to reduce the likelihood of wastewater leakages and unexpected hazardous materials or solid waste releases, we may not always succeed in preventing such incidents from occurring due to various factors that are outside of our control. In the event of difficulties in the reuse or disposal of waste generated in our facilities, interruptions or production stoppage may occur and significant costs may be incurred. If we cannot properly mitigate and reduce the exposure, our operations may be adversely and materially affected.
For further information, see “Item 3 - Key Information— D. Risk Factors“.
Israel
Liquid and solid waste, as well as other emissions, are regulated by multiple regulations. Our plants in Israel implement waste monitoring and management measures. Each plant is required to inform the authorities on their amount of waste and their treatment method for every six monthswaste stream under Israel’s PRTR (Pollutant Release and Transfer Register) regulation. Wastewater regulations, including effluent limits, are regulated by the CenterMoEP, as well as partly by local authorities.
Pursuant to the conditions set by the MoEP in their Toxins Permits, our plants in Israel have conducted historical land contamination surveys which were submitted to the MoEP.
ICL Dead Sea (DSW) - Salt by-product is transferred to a large open-air depot in proximity to DSW’s site. The open-air depot's dimensions (height and area) are limited by statutory requirements. DSW is examining alternatives for salt storage/treatment.
Rotem Israel - The site is implementing a master plan for wastewater treatment, with the principal goal of reducing effluent quantities. This will be accomplished by converting some effluents into products, wastewater recycling, reducing water consumption, treatment or neutralization of wastewater and restoration of wastewater ponds. The plan includes the treatment of additional wastewater streams created by air emission purification processes, which are required by the Israeli Clean Air Law.
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As part of the treatment of liquid and solid waste, the site stores phosphogypsum waste in ponds and piles. In 2021, a new Urban Building Plan was approved, the main objective of which is to regulate areas for phosphogypsum storage reservoirs.
Regarding the phosphogypsum waste ponds, the new plan allows the use of Pond 5, which has been operating since 2018, until the end of its operational life, expected in 2025. The District Committee for Planning and Construction approved the submission of a plan to reuse Pond 4 under certain conditions in order to replace Pond 5 upon the end of its operational life. Following the completion of the planning stage for construction and landscape restoration of phosphogypsum Ponds 1 to 3 that were used by Rotem Israel in the past, ICL has begun the early phase of restoration.
Regarding the phosphogypsum waste piles, according to the regulatory requirements, future expansion of the storage piles should be positioned on new protective infrastructure by the end of 2025. In September 2023, the Company submitted its plan for restoration of these large storage piles, including the set methodologies as required by the various regulators. Rotem Israel is experiencing difficulties meeting some of the requirements’ deadlines and is working with the relevant parties to mitigate the gaps. Furthermore, Rotem Israel is striving to find alternative uses for the phosphogypsum with external industry partners.
Neot Hovav - Pursuant to the requirements of the MoEP, our Neot Hovav site is required to treat remnant hazardous waste in the coming years. This waste is stored in a designated defined area on the site's premises in coordination with the MoEP. Some of the currently produced waste is also stored in this area. Treatment of this waste is partly conducted through a combustion facility (Bromine Recovery Unit), which recovers hydro-bromine acid. Additional waste quantities are sent to external designated treatment facilities. Once the area is cleared, the Company will be required to conduct soil surveys. For further information, see Note 17 to our Audited Financial Statements.
ICL Periclase - The site is working to reduce remnant Magnesia waste stored in a designated waste area, and to reuse it for the benefit of a Circular Economy. During 2023, ICL Periclase implemented a project that uses magnesia powder, a non-hazardous material, to fill sinkholes in the Dead Sea region. This approach will continue as an ongoing process in the future.
ICL Haifa (F&C) – Following the MoEP's requirements to find an alternative to runoff collection-pond, it was suggested to install above-ground containers for collecting runoff water. The issue is still under deliberations with the MoEP subject to the new statutory plan for the Haifa industrial zone.
The production process of phosphoric acid produced in the 1990’s at a site which has since been shut down has created a by-product in the form of a phosphogypsum pile which is stored at the site. The Company is working in coordination with the MoEP and is taking the necessary actions to meet regulatory requirements in a timely manner, including as stipulated in the Toxins Permit issued to the site.
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Europe
Liquid and solid waste and effluents are regulated under the European IED – Industrial Emission Directive. The Company implements waste monitoring and other management measures, the results of which we are obligated to inform the authorities. Wastewater regulations, including effluent limits, are regulated by states and partly by communities. We are subject to provisions regarding the avoidance of pollution and conditions for assessing compliance with effluent limit values.
Wastewater is partly pre-treated and sent to municipalities and third parties for final treatment, before discharge, or at levels that can be discharged to surface waters without treatment. In the event solid waste must be disposed we strive to treat it in accordance with relevant European requirements.
ICL Iberia - A multi-year program is underway to restore large salt piles, while paying close attention to the issue of wastewater drainage and sludge treatment. In April 2021, the Company signed an agreement with the ACA, Catalan Water Agency, for the construction and operation of new collector infrastructure. The new collector is required for the removal of brine water that will be used for restoration, as well as for production. For further information, see Notes 17 and 18 to our Audited Financial Statements.
ICL Boulby - All wastewater leaving our site in the UK is permitted according to the UK’s Environment Agency. The site's wastewater consists of extracted sea water, mine brines, gathered surface rainwater and water treated at the onsite sewage plant. Multiple parameter limits are imposed on the site by the wastewater permit and wastewater amounts have since been reduced considerably.
Americas
Liquid and solid wastes at our Americas sites are managed in accordance with country and state-specific regulatory requirements. In the US, solid and hazardous wastes are regulated by the Environmental Protection Agency’s (EPA) Resource Conservation and Recovery Act and analogous US state laws. In Brazil, waste is managed under the site’s operation license issued by the relevant state environmental agency.
ICL follows a qualification process for waste vendors who assist us in ensuring that waste is properly profiled, treatment standards are followed, and disposal processes meet regulatory requirements. Wastewater is managed by site industrial discharge permits from federal, state or local agencies. Wastewater treatment is mainly focused on chemical treatment through systems that are maintained on a regular basis.
ICL US Gallipolis Ferry - In January 2023, the site entered into a Consent Order with the West Virginia Department of Environmental Protection (WV DEP) regarding gas emissions. In the phosphate plant, the Company has adapted its facilities by means of installation of systems monitoring gas emissionswater discharge, allowing for a plan to be developed and executed in order to comply with local regulationspermit requirements. We executed the proposed plan and regulatory schemes. The plant is inmilestone schedule on a timely basis. As one milestone was found not to be a viable action to maintain permit compliance, with allwe proactively proposed an alternative plan and currently await the laws and regulations. In 2017,reply of the ammonia complex, which was located near the residential area proximateWV DEP regarding their receptivity to the plant, was moved to the plant’s premises.our proposal.
China
According to the Law of the People's Republic of China on the Prevention and Control of Solid Waste Pollution and the National Catalogue of Hazardous Waste, solid waste is collected, stored and transferred. General industrial solid waste is entrusted for comprehensive utilization by qualified organizations, and hazardous waste is entrusted for treatment by organizations with a Hazardous Waste Business License issued by the Department of Ecological Environment of Yunnan Province.
YPH: All wastewater at YPH, after physical or chemical treatment, is reused in the production system with zero discharge.
Ecological Impact
We manage our mineral extraction sites according to local regulations, and we depend on concessions that are granted to us. Our broad and varied operations cover the entire lifecycle of our products, from the initial production of raw materials through manufacture of final product. This is becoming more challenging as the population grows in proximity to our sites. To try to minimize any unexpected disturbances by our facilities on their surrounding communities, we have increased our efforts to take precautions and safety measures in our activities, especially those which involve hazardous materials.
We aim to minimize the ecological impact of both our mining and production activities, beginning at the initial stage of planning through the implementation of recommendations and finally by monitoring and minimizing their impact. We continuously implement relevant operational methodologies and necessary technologies aimed at preventing unexpected ecological impact. In the event of an ecological impact, we strive to mitigate and remediate the impact, in accordance with best practices and regulatory requirements, including coordination with the relevant local authorities. For further information, see “Item 3 - Key Information— D. Risk Factors ".
It should be noted that our Sodom production facility is in the Jordan Rift Valley, or Syro-African Depression, a seismically active area. For further information, see “Item 3 - Key Information— D. Risk Factors ".
ICL DSW – Due to the negative water balance, the water level in the northern basin of the Dead Sea is decreasing. The receding water levels over the years has required ICL to reposition its pumping station northwards to enable continued operations in the Dead Sea region, which also enables the existence of tourism infrastructure. The P-9 pumping station and feeder canal crossing the Tze’elim stream were constructed to maintain operational continuity. The Tze’elim stream alluvial fan is one of the largest and most developed of all the surviving fans in the area, and therefore it is important to preserve it and to protect the biodiversity existing in this habitat. ICL reached an agreement with environmental authorities and organizations according to which seven culverts were constructed above the excavated canal to allow flood waters to flow through the original flow channel without damaging the feeder canal, while maintaining the braided channel fan pattern. The culverts serve as an ecological corridor by providing passageways for animals. We periodically review field data and make adjustments in accordance with the findings. In March 2023, we completed a project at the request of the Israeli Nature and Parks Authority involving the installation of sealing sheets over an approximately 2km-long section of the 15km feeder canal in the area of the fan following an unexpected flow of brine which was discovered above ground at the outskirts of the alluvial fan area. For further information, see “Item 4 – Information on the company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations- Dead Sea” and Note 18 to our Audited Financial Statements.
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ICL Iberia - ICL Iberia’s past activities have resulted in the salinization of some water wells in the Suria and Sallent sites. This resulted in compensation claims from owners of land surrounding the sites.
Rotem Israel - In 2017, Rotem experienced an environmental incident in which acidic phosphogypsum liquid was released into the surrounding environment, including a nature reserve and the nearby Ashalim Creek (Nahal Ashalim) as a result of a breach in its Number 3 detainment pond. We took extensive actions to restore the creek to its prior state, in full cooperation with the relevant authorities.
Following the incident, several certifications of claims as class actions were filed against the Company, and to the best of our knowledge, a criminal investigation of the event is still pending.
In December 2022, following a mediation process between Rotem Israel and the INPA, as well as all other applicants, a settlement agreement was signed between the parties and later approved by the District Court. In January 2024 the Supreme Court rejected an appeal filed against the District Court's ruling and concluded the proceedings. For further information, see Note 18 to our Audited Financial Statements.
Rotem Israel is currently in a process of remediating its phosphogypsum ponds according to an approved engineering remediation plan, that was formulated based on the ‘Florida Standard’. After reaching an agreement with the authorities on landscape restoration and obtaining a building permit, ICL initiated the first phase of the restoration.
In 2020, an application for a class action was filed against the Company according to which, discharge, leakage, and seepage of wastewater from Rotem’s Zin site allegedly resulted in various environmental hazards and damage to the Zin stream. In November 2022, the parties signed a procedural arrangement to resort to a mediation process in an attempt to settle the dispute outside of court. For further information, see Note 18 to our Audited Financial Statements.
In 2018, an application for certification of a claim as a class action was filed against the Company claiming it allegedly caused continuous, severe and extreme environmental hazards through pollution of the “Judea group – Zafit formation” groundwater aquifer and the Ein Bokek spring with industrial wastewater. In April 2022, the Be'er Sheva District Court dismissed in limine the application due to statute of limitations and property rights. On October 12, 2023, Israel's Supreme Court rendered its ruling in the appeal filed against the District Court’s decision, dismissing the plaintiffs claim regarding property rights, and therefore dismissing the application for certification of the entire public of the State of Israel. Yet accepted the appeal with regards to the statute of limitations claim, and ruled that application for certification is approved regarding a limited class constituting visitors at the Bokek stream. In accordance therewith, the application for certification limited to such group shall be reviewed by the District Court. For further information, see Note 18 to our Audited Financial Statements.
Part of the environmental challenges that our Rotem Israel site faces and deals with include environmental class actions against the Company that also pertain to environmental damages originating in the period that ICL was owned by the Israeli government prior to its privatization.
ICL R&D Beer Sheva - A soil survey was conducted, the results of which point to soil contamination. ICL is acting in accordance with the survey's findings and related MoEP guidelines.
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lCL Periclase - Brine, a non-hazardous substance, leaked from a ruptured pipeline in a nature reserve. No significant damage was recorded. Several hundred meters of pipelines were replaced, and we intend to replace additional pipelines within the Dead Sea Works area by the end of 2024.
Brazil - After conducting soil surveys at our Brazilian sites, we identified some immaterial historical soil and groundwater contamination. In response, we are actively engaged in remediation efforts, while maintaining close cooperation with governmental agencies and local regulators.
Biodiversity
Biodiversity, also called biological diversity, is the variety of life found in a place on Earth. A common measure of this variety, called species richness, is the count of species in an area. We recognize the need to consider environmental factors when using land and managing our operations, particularly in ecologically sensitive areas, including areas with unique cultural value. We are committed to ongoing consideration of the impact of our activities on biodiversity in our decision making.
Examples regarding our management of biodiversity at some of our mining sites includes the following:
ICL DSW - Sodom Saltmarsh Lake. The Ashalim reservoir, located south of ICL’s Dead Sea site is a wet habitat, situated within a typical arid habitat. It is abundant with rich biological diversity. ICL Dead Sea, whose excavations in the region created this wet habitat, takes extra measures to preserve it and invests in making this unique habitat accessible to the public. In the past, the Sodom salt flats area was a resting stop and habitat for migratory birds. Today, due to changes in the land’s use for agriculture, residential and industrial purposes, almost no salt flats remain. These flats have unique characteristics with high salinity in the soil and unique species that have adapted to these extreme conditions. The salt flats in Israel are a rare habitat and have been shrinking over time. The Sodom Saltmarsh Lake has become a salt flat substitute. Over the past few years, the lake has had relatively good water quality year‑round and we are continuously monitoring the lake to measure its water quality. Vegetation has also been planted in a stable water environment. The lake is now used as a resting spot for migrating birds and as a nesting site for a wide range of species.
Rotem Israel - Since 2016, Rotem Israel has been participating in academic cooperative research with Ben Gurion University of the Negev which examines the ecological and biodiversity effectiveness of mine reclamation. The parameters being researched include soil chemistry, soil microbiology, vegetation growth potential, abundance, arthropod animals and remote sensing land analysis. Following the initial research results and as part of the rehabilitation process, we are creating micro-topography to diversify the landscape. We also collected seeds from the field to create a seed bank in order to contribute to the rehabilitation and recovery of vegetation in reclaimed areas.
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ICL Boulby - Adjacent to ICL Boulby’s mining facilities, and within its operational area, are non-developed turfs where important habitats and species flourish. Most notable are the woodlands at Mines Wood and Ridge Lane Wood, near Dalehouse. These are some of the most wildlife-rich woodlands in the Northeast England/Yorkshire areas. The woodlands are home to invertebrates, birds and mammals. For over a decade ICL Boulby has worked with the Industry Nature Conservation Association (INCA) to monitor and manage the wildlife that exists in proximity to the mine. Key to this process is a Site Biodiversity Action Plan (Site BAP), operated by ICL Boulby within its operational area. The Site BAP is designed to conserve key habitats and species which live at the site and is assisted by INCA annually. For further information, see “Item 4 – Information on the Company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations”.
Hazardous Substances
Some of the substances used at our facilities across the world (such as raw materials, etc.) are hazardous substances, as are some materials found in our finished products. These substances require government approvals and registration which are secured and maintained. Relevant safety measures and procedures for storage, use and handling are also implemented and maintained. In addition, measures are taken to reduce the likelihood of releases of hazardous materials by way of supplier, transporter and vendor qualification, as well as by training employees, contractors and vendors on the proper handling of these materials. We take measures to reduce the likelihood and the potential severity of incidents in the event of exposure to hazardous materials. This includes risk assessment, training, personal protective equipment (PPEs) and other relevant mitigation measures for employees and contractors. We prepare for hazardous material incidents by means of training emergency teams and acquiring appropriate equipment for dealing with these types of events.
We are strongly committed to bringing safe products to the market that also have a reduced environmental impact, and we ensure full compliance with all regulations, laws, conventions, statures and standards related to chemical management. Accordingly, scientific information is generated on all our products in GLP-certified laboratories using worldwide testing guidelines (OECD, OPPTS). This includes physico-chemical properties, toxicological and environmental tests. The generated data ensures safer chemicals for people and the environment. The data incorporated into a formal dossier including chemical safety assessment which is submitted to relevant regulatory authority for evaluation and approval.
We are also devoted to communicating accurately information that reflects the scientific evidence used in making the hazard determination. Hazardous products produced or imported by ICL are classified in accordance with GHS/CLP criteria, and information concerning the classified hazards is transmitted to ICL customers and employees. The transmittal of information is accomplished by means of comprehensive hazard communication documentation including Safety Data Sheets (SDS), labels, letters to customers, declarations, and safety cards for employees. Emergency contacts for all regions appear on all our SDSs and labels.
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Safety and Environmental Stewardship of Chemicals
ICL’s brand promise is to create impactful solutions for humanity’s sustainability challenges by leveraging our unique resources and technological ingenuity. As stated above, we are committed to the UN’s SDGs. ICL’s approach to developing new products and services is reflected in the alternative processes that we are applying. ICL’s RD&I practices have evolved in its perspective over the past few years, from supporting business continuity to adopting a “Sustainability Index” when developing new products. The index includes a GO/NO-GO decision-making analysis based on defined environmental criteria in the development of new products. We also incorporate Green Chemistry principles. The index was developed as a quantitative model for products in development, and its purpose is to set parameters for sustainable products in the development stage. We combine environmental, health and safety criteria with commercial and operational considerations. Potential products are rigorously tested using the index for product development. Index methodology is implemented in the R&D units of our Industrial Products, Phosphate Solutions and Growing Solutions segments. Each segment has its own specific variations to match its specific product types. Based on rating results, changes are incorporated into the development process. The objective is to develop the most sustainable products for the specific intended use. Products that are categorized as “NO-GO” are discontinued in the development stage and are not commercialized.
The next phase of our evolution includes using the UN SDG’s as conceptual guidelines in our RD&I strategy. Our RD&I unit is embedding impact strategy and criteria. The unit has developed a data-driven Impact Assessment Tool for all RD&I projects to support ICL’s actions on tackling climate change, advancing food security, promoting sustainable agriculture and contributing to human health, safety and wellbeing. This strategic component is part of our positive impact product development processes. We are also implementing Circular Economy and biomimicry concepts to reduce our environmental impact. Through our impact assessment tool, we scope potential and risk, define and optimize the potential for positive impact, and establish clear and measurable goals which are monitored and reported.
In addition, we are addressing various Green Chemistry principles both in the development of new products, as mentioned above, and during the use phase of our products. One example is our SAFR®-A Systematic Assessment for Flame Retardants. For our industrial products, we recommend best practices for using many of our products as part of the service we provide to our clients. The SAFR® methodology developed by ICL provides an evaluation of flame retardants in their applications, enabling users to select the most sustainable product for the intended use. SAFR® incorporates an estimated exposure component based on the level of contact to humans and/or the environment and measurable potential emissions of flame retardants during their use. The assessment of a given flame retardant with SAFR® leads to the identification of uses that are either recommended, acceptable, not recommended or an unacceptable hazard in which case alternatives should be identified. We are planning to add chemical attributes that identify the best choice for End of Life, Recyclability and Re-use. This will make the SAFR® tool better equipped to support Circular Economy.
Limitation Regulation and Registration of our Products
As a global specialty minerals company, we are subject to multiple rules and regulations in terms of product safety. We ensure that the substances we produce and sell are handled in accordance with all such rules and regulations throughout their life cycle. These rules and regulations, among other things, impose limitations on the use of specific substances and products, and require us to register and label some of our products. We continuously monitor these rules and regulations and take the necessary operational measures to ensure that we remain in material compliance with them. For further information, see “Item 3 - Key Information— D. Risk Factors".
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Industry Associations
We are an active member of several industry associations to safeguard our products. The most prominent associations include the International Bromine Council (BSEF) which promotes the benefits of bromine and bromine technologies for society and economy, the North American Flame Retardant Association (NAFRA), which promotes the benefits of flame retardants in the Americas and Canada, and the Phosphorus, Inorganic and Nitrogen Flame Retardants Association (PINFA), which works in partnership with stakeholders (NGOs, environmental entities, consumer associations, scientists, regulators, fire safety experts, user industries, etc.) to ensure the safe use of flame retardant products.
ICL is also a member of the European Energy Efficiency Directive (EED)Chemical Industry Council (CEFIC) and the American Chemistry Council (ACC), where we are members of various task forces to ensure that we remain in compliance with Responsible Care and Sustainability programs.
These collaboration and network activities help us to work and relate to new classifications and regulations in the bromine compounds industry. The trade associations’ group activities, which include ICL, work diligently, to avoid unnecessary classifications with the help of additional external experts in the field of toxicology and other respective disciplines.
New European Fertilizer Product Regulation (hereinafter – FPR)
FPR covers a broad scope of materials, including all types of fertilizers, liming materials, biostimulants, growing media, soil improvers, inhibitors and other blends of these materials. The new regulation requires fertilizer producers to monitor new contaminating elements in fertilizer products. In addition, pursuant to FPR, fertilizer producers will have to demonstrate the ability to track their products to ensure their quality in the production and supply chain. The labelling of fertilizer products will need to change, and conformity assessment methodologies will need to be updated. Moreover, new tolerance levels for fertilizer contaminants are included in the FPR. One area of focus is the level of cadmium in fertilizers containing phosphate. In addition, FPR includes very challenging biodegradation requirements for polymer coatings on controlled release fertilizers. These requirements need to be established by ICL by July 2026 for its continued sale of controlled release fertilizers. We are actively undertaking steps to adjust to these new regulations for all our relevant products.
The latest Energy Efficiency Directivetopic of biodegradable criteria is high on the agenda. By July 2024 the delegated act must be available, and testing requirements will be known by such date. Our first biodegradable coating is already on the market (eqo.S/eqo.X). ICL is working on additional specific coating materials to cover the biodegradability and the polymeric as well as the microplastic impact.
Micro-plastics
On September 25, 2023, the European Commission adopted measures that restrict microplastics intentionally added to products under the EU chemical legislation, REACH. The new rules will prevent the release to the environment of about half a million tonnes of microplastics. They will prohibit the sale of microplastics as such, and of products to which microplastics have intentionally been added and that release those microplastics when used. When duly justified, derogations and transition periods for affected parties to adjust to the new rules apply.
Our main products which are subject to these requirements are fertilizers, and to a lesser extent, other products such as flame retardants. We are closely observing the changes in requirements to remain in compliance.
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PFAS
In February 2023, The European Chemical Agency (ECHA) published details of a proposed ban on the production, use, sale and import of some 10,000 PFAS. The purpose of the European Union came into effect on December 4, 2012. The requirements in the Energy Efficiency Directive must be implemented by companies operating in the European Union. The Energy Efficiency Directive provides a joint frameworkban is to advance energy efficiency in the European Union, in order to achieve the European Union’s energy goals by 2020. These goals include the reduction of GHG emissions by 20% compared with the levels in 1990, an increase in the rate of consumption of renewable energy sources to 20%keep PFAS out of the total energy consumption and an improvementenvironment. The European Commission is slated to present the proposal to Member States formally in energy efficiency by 20%. Accordingly, all countries that are members2025. If passed, it would constitute one of the European Unionlargest chemical substances bans ever in Europe.
We are requiredlooking to increaseactively replace any potential PFAS uses and have already limited them to a small extent.
New Chinese Polysulphate standard
In 2021, a new industry standard for Polysulphate (as a fertilizer) was published in China. ICL has defined the efficiency of their energy consumption in all stagesoptions to meet these new requirements and the effect of the energy chain — conversion, transportation and final use. ICL is developing and adopting strategies and procedures at allnew standard on the supply of its European plantsPolysulphate to comply with the local interpretations of the Directive.Chinese market.
| 1. | In December 2023, ICL’s Polysulphate STD temporary registration renewal request was rejected. We are in close contact with the Ministry of Agriculture (MoA) on the possibility of extending the registration for the interim period. |
| 2. | We have begun to work on registering Polysulphate under the new category of a soil conditioner. Field trials are currently on-going and will require three years. The results are expected by the end of 2024. |
Natural Gas
For more information regarding our natural gas agreements, see “Item 5Note 18 to our Audited Financial Statements and "Item 3 – Key Information - Operating and Financial Review and Prospects— A. Operating Results— Principal Factors Affecting our Results of Operations and Financial Condition”D. Risk Factors".
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In September 2023, the European Commission published the recast of the Company'sEU Directive on Energy Efficiency effective October 10, 2023. This is aimed at further stimulating efforts to promote energy efficiency and achieve energy savings in the battle against climate change. This initiative is part of the EU’s measures to reduce greenhouse gas emissions by 55% by 2030 and become climate-neutral by 2050. The directive has established a legally binding target to reduce the EU’s final energy consumption by 11.7% by 2030 (relative to the 2020 reference scenario). Each Member State is required to set its indicative national contribution based on objective criteria that reflect its national circumstances. If the total national contributions do not meet the EU target, the Commission will apply an Ambition Gap Mechanism.
The EED directive requires increasing annual energy savings from 0.8% (at present) to 1.3% (2024-2025), then 1.5% (2026-2027) and 1.9% from 2028 onwards. That’s an average of 1.49% of new annual savings for the period from 2024-2030.
We expect that each EU Member State (MS) will set its indicative national contribution, following which we will develop plans and strategies to comply with these requirements for all our European operations going forward, including considering further acceleration of our transition to renewable energy sources.
Air Quality
Reducing air emissions is a central goal of our environmental strategy. We are taking steps to reduce air emissions by implementing emission prevention solutions and switching to cleaner fuels. Our sites regularly monitor their emissions of pollutants to better manage our operations.
Israel
In Israel, air emissions from major industrial operations are regulated by the Clean Air Law (hereinafter - the Law) which aims to improve air quality, prevent and reduce air pollution by implementing both prohibitions and obligations, and protect the health and quality of life of human beings and the environment. The Law addresses emission sources (including all our production plants in Israel) and is intended to serve as a platform for implementing the regulatory principles currently in place in the European Union (EU), specifically the principles of the IED (The Industrial Emissions Directive) adopted by the EU.
Our plants in Israel that fall under the definition of Emission Source Subject to Licensing Requirements have received air emission permits. In the event of deviations from the emission permits’ conditions, we could be subject to shutdowns, administrative enforcement measures, as well as to criminal liability. Certain restrictions on our operations and significant capital investments may therefore be imposed on our Company. To comply with the emissions permits granted under the Law, we have made significant investments, and will continue to do so as necessary. As a result, some of ICL’s air emissions have decreased considerably.
DSW and DSM are implementing major dust reduction projects, some of which have already been initiated and are expected to be completed over the next few years. Our other production sites in Israel are also increasing their efforts to reduce particle emissions.
In January 2024, a new emission permit was issued to Rotem Israel under the Israeli Clean Air Act (hereinafter - the Law) valid until January 2031. The Company is in active discussions with the Israeli Ministry of Environmental Protection (MoEP) to assure adherence to all stipulations outlined in the permit, including the conditions specified in the administrative order under Section 45 of the Law, and to achieve satisfactory resolutions to notable timeline execution challenges for a limited number of projects. Rotem Israel is implementing several significant emissions reduction projects as required in the permit, through a multi-year plan. For further information, see Note 18 to our Audited Financial Statements.
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Europe
In Europe, emissions are regulated under the EU IED – Industrial Emission Directive, as well as regional and local regulations. Preventive measures are applied. These regulations are translated to national legislation. Emission limit values for relevant substances are included as part of the authority's approval. In addition, relevant emissions control is carried out by authority inspection through independent technical supervisory associations and by self-inspection. Relevant plants in the EU are subject to the European SEVESO directive which requires regular safety inspections and reports.
Americas
Air emissions in the Americas are managed through operating permits issued by the relevant agency responsible for each individual site. In the US, air permits are issued under the authority of the US Environmental Protection Agency’s (EPA) Clean Air Act. In Brazil, air emissions are managed under the site’s operation license issued by the relevant state environmental agency.
China
Air emissions in China are regulated in accordance with the Law of the People's Republic of China on the Prevention and Control of Atmospheric Pollution and the Regulations on the Management of Pollutant Discharge Permits.
Water
We regard potable water as a high value natural resource and water conservation is an inherent part of our business culture. We expect potable water to become scarcer across the globe. As water scarcity becomes a pressing global issue due to climate change and other factors, we expect greater and stricter regulation of water consumption and wastewater quality. We also anticipate that we will need to invest in additional resources to enhance our water efficiency and wastewater quality at some of our plants.
Nevertheless, many of our major production sites are located in Israel which has achieved water supply security due to large investments. Though located in a water stressed region, Israel manages its water resources efficiently. Due to institutional and regulatory reforms and significant development of non-conventional water sources, such as treated wastewater and desalination, water production capacity in Israel exceeds demand. Accordingly, over the last two decades desalination plants and Reverse Osmosis (RO) plants have become major contributors to the country’s potable water resources, thereby reducing potable water scarcity and water stress risks in the country. Industrial facilities, such as our facilities in Sodom, are allowed to use non-potable water where possible.
Our production facilities have already undertaken various water conservation projects, including using of brackish water and recycling treated wastewater. We track the consumption of water at our facilities worldwide and promote the implementation of water efficiency projects.
In 2023, ICL’s Board approved an ICL Group Water Management Policy. The policy outlines our proactive approach and considerable efforts to enhance our water efficiency, reduce our impact on water sources, and advance innovative solutions to water usage and wastewater disposal challenges in the areas in which we operate. Regarding Board-level oversight, our CSC Committee is responsible, among other things, for ICL’s water management.
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On the executive management level oversight, the Potash Division’s president and Global EHS, is responsible, among other things, for ICL’s overall water management.
For further information about water-related issues in Israel, see Note 18 to our Audited Financial Statements.
Wastewater, By-products, Waste & Hazardous Waste
We track and manage our waste streams and take various steps to reduce waste. We identify and seek to maximize potential reuse and recycling of relevant waste streams and are proactive in searching for Circular Economy opportunities. For further information, see the “Circular Economy” section above. During production processes at our facilities, industrial liquids and solid wastes are produced. Storage, transportation, reuse and disposal of waste are generally regulated by governmental authorities in the countries in which we operate. Wastewater quality and quantities must comply with local regulations and with permits at relevant sites. We strive to implement zero discharge policies where applicable. Various production sites have adapted their treatment systems to the standards applicable to them. We track and manage our waste streams and take various steps to reduce waste or identify and maximize potential reuse and recycling of relevant waste. Most of the waste is either directly treated by us or treated by external certified vendors.
Although we strive to reduce the likelihood of wastewater leakages and unexpected hazardous materials or solid waste releases, we may not always succeed in preventing such incidents from occurring due to various factors that are outside of our control. In the event of difficulties in the reuse or disposal of waste generated in our facilities, interruptions or production stoppage may occur and significant costs may be incurred. If we cannot properly mitigate and reduce the exposure, our operations may be adversely and materially affected.
For further information, see “Item 3 - Key Information— D. Risk Factors“.
Israel
Liquid and solid waste, as well as other emissions, are regulated by multiple regulations. Our plants in Israel implement waste monitoring and management measures. Each plant is required to inform the authorities on their amount of waste and their treatment method for every waste stream under Israel’s PRTR (Pollutant Release and Transfer Register) regulation. Wastewater regulations, including effluent limits, are regulated by the MoEP, as well as partly by local authorities.
Pursuant to the conditions set by the MoEP in their Toxins Permits, our plants in Israel have conducted historical land contamination surveys based on a demand received as part of the conditions for receipt of a business license regarding an integrated arrangement,which were submitted them to the Ministry of Environmental Protection and are awaiting the Ministry's instructions.MoEP.
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As part of the effluents into products, recycling the wastewater, reducing the water consumption, treatment of wastewaterliquid and neutralizationsolid waste, the site stores phosphogypsum waste in ponds and restorationpiles. In 2021, a new Urban Building Plan was approved, the main objective of the wastewaterwhich is to regulate areas for phosphogypsum storage reservoirs.
Regarding the phosphogypsum waste piles, according to the regulatory requirements, future expansion of the Ashalim stream. Immediately upon occurrencestorage piles should be positioned on new protective infrastructure by the end of 2025. In September 2023, the Company submitted its plan for restoration of these large storage piles, including the set methodologies as required by the various regulators. Rotem Israel is experiencing difficulties meeting some of the event, Rotem Amfert Israel took intensive action to restore the channel, in full cooperationrequirements’ deadlines and is working with the authorities involvedrelevant parties to mitigate the gaps. Furthermore, Rotem Israel is striving to find alternative uses for the phosphogypsum with the matter. Rotem Amfert Israel performed land and plants surveys of the channel’s grounds, as well as an aerial examination, and has begun to closely monitor the channel’s condition. In addition, water infrastructures were connected for purposes of both drinking water for animals and plant irrigation, as well as for cleaning the channel. For additional information see Note 21 to our Audited Financial Statements.external industry partners.
ICL Industrial Products operatesPericlase - The site is working to reduce remnant Magnesia waste stored in a special authorized laboratorydesignated waste area, and to reuse it for monitoringthe benefit of a Circular Economy. During 2023, ICL Periclase implemented a project that uses magnesia powder, a non-hazardous material, to fill sinkholes in the Dead Sea region. This approach will continue as an ongoing process in the future.
ICL Haifa (F&C) – Following the MoEP's requirements to find an alternative to runoff collection-pond, it was suggested to install above-ground containers for collecting runoff water. The issue is still under deliberations with the MoEP subject to the new statutory plan for the Haifa industrial zone.
The production process of phosphoric acid produced in the 1990’s at a site which has since been shut down has created a by-product in the form of a phosphogypsum pile which is stored at the site. The Company is working in coordination with the MoEP and analyzing wastewater quality.is taking the necessary actions to meet regulatory requirements in a timely manner, including as stipulated in the Toxins Permit issued to the site.
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Europe
Liquid and solid waste and emissionseffluents are regulated under the European IED – Industrial Emission Directive. The Company implements waste monitoring and other management measures,, and is the results of which we are obligated to inform the authorities of the results.authorities. Wastewater regulations,, including effluent limits,, are regulated by states and partly by communities. ICL hasWe are subject to provisions regarding the avoidance of pollution and conditions for assessing compliance with the emissioneffluent limit values.
Wastewater is partly pretreatedpre-treated and sent to municipalities and third parties for final treatment, before discharging. The production processes, in general, are not generating significant volumes of direct solid waste.discharge, or at levels that can be discharged to surface waters without treatment. In casethe event solid waste needs tomust be disposed of, the required documentation and approvals under thewe strive to treat it in accordance with relevant European regulations are fulfilled.
requirements.ICL Boulby - All wastewater leaving our site in the UK is permitted according to the UK’s Environment Agency. The site's wastewater consists of extracted sea water, mine brines, gathered surface rainwater and water treated at the onsite sewage plant. Multiple parameter limits are imposed on the site by the wastewater permit and wastewater amounts have since been reduced considerably.
Americas
ICL follows a qualification process for waste vendors which assistswho assist us in ensuring that waste is properly profiled, treatment standards are followed, and disposal processes meet regulatory requirements. Wastewater is managed throughby site industrial discharge permits that are managed throughfrom federal, state or local agencies. Waste waterWastewater treatment is mainly focused on chemical treatment. The wastewater treatment through systems that are maintained on a regular basis.
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China
YPH: All wastewater at YPH, after physical or chemical treatment, is reused in the production system with zero discharge.
Ecological Impact
We manage our mineral extraction sites according to local regulations, and we depend on concessions that are granted to us. Our broad and varied operations cover the entire lifecycle of our products, from the initial production of raw materials through manufacture of final product. This is becoming more challenging as the population grows in proximity to our sites. To try to minimize any unexpected disturbances by our facilities on their surrounding communities, we have increased our efforts to take precautions and safety measures in our activities, especially those which involve hazardous waste. materials.
We aim to minimize the ecological impact of both our mining and production activities, beginning at the initial stage of planning through the implementation of recommendations and finally by monitoring and minimizing their impact. We continuously implement relevant operational methodologies and necessary technologies aimed at preventing unexpected ecological impact. In orderthe event of an ecological impact, we strive to complymitigate and remediate the impact, in accordance with best practices and regulatory requirements, including coordination with the relevant local regulations,authorities. For further information, see “Item 3 - Key Information— D. Risk Factors ".
It should be noted that our Sodom production facility is in the Company has adapted its plant by means of installation of systems for removal of wastewater and diversion thereof from clean Jordan Rift Valley, or Syro-African Depression, a seismically active area. For further information, see “Item 3 - Key Information— D. Risk Factors ".
ICL DSW – Due to the negative water sources, including transferring phosphogypsumbalance, the water (which is created as a by-productlevel in the northern basin of the production processes) into designated ponds for further treatment.Dead Sea is decreasing. The plantreceding water levels over the years has received a license for unloading contaminating materialsrequired ICL to reposition its pumping station northwards to enable continued operations in the Dead Sea region, which also enables the existence of tourism infrastructure. The P-9 pumping station and strict environmental licensesfeeder canal crossing the Tze’elim stream were constructed to maintain operational continuity. The Tze’elim stream alluvial fan is one of the largest and most developed of all the surviving fans in the area, and therefore it is important to preserve it and to protect the biodiversity existing in compliancethis habitat. ICL reached an agreement with allenvironmental authorities and organizations according to which seven culverts were constructed above the lawsexcavated canal to allow flood waters to flow through the original flow channel without damaging the feeder canal, while maintaining the braided channel fan pattern. The culverts serve as an ecological corridor by providing passageways for animals. We periodically review field data and regulations.
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ICL Iberia - ICL Iberia’s past activities have resulted in the salinization of some water wells in the Suria and Sallent sites. This resulted in compensation claims from owners of land surrounding the sites.
Rotem Israel - In 2017, Rotem experienced an environmental incident in which acidic phosphogypsum liquid was released into the surrounding environment, including a nature reserve and the nearby Ashalim Creek (Nahal Ashalim) as a result of a breach in its Number 3 detainment pond. We took extensive actions to restore the creek to its prior state, in full cooperation with the relevant authorities.
Following the incident, several certifications of claims as class actions were filed against the Company, and to the best of our knowledge, a criminal investigation of the event is still pending.
In December 2022, following a mediation process between Rotem Israel and the INPA, as well as all other applicants, a settlement agreement was signed between the parties and later approved by the District Court. In January 2024 the Supreme Court rejected an appeal filed against the District Court's ruling and concluded the proceedings. For further information, see Note 18 to our Audited Financial Statements.
Rotem Israel is currently in a process of remediating its phosphogypsum ponds according to an approved engineering remediation plan, that was formulated based on the ‘Florida Standard’. After reaching an agreement with the authorities on landscape restoration and obtaining a building permit, ICL initiated the first phase of the restoration.
In 2020, an application for a class action was filed against the Company according to which, discharge, leakage, and seepage of wastewater from Rotem’s Zin site allegedly resulted in various environmental hazards and damage to the Zin stream. In November 2022, the parties signed a procedural arrangement to resort to a mediation process in an attempt to settle the dispute outside of court. For further information, see Note 18 to our Audited Financial Statements.
In 2018, an application for certification of a claim as a class action was filed against the Company claiming it allegedly caused continuous, severe and extreme environmental hazards through pollution of the “Judea group – Zafit formation” groundwater aquifer and the Ein Bokek spring with industrial wastewater. In April 2022, the Be'er Sheva District Court dismissed in limine the application due to statute of limitations and property rights. On October 12, 2023, Israel's Supreme Court rendered its ruling in the appeal filed against the District Court’s decision, dismissing the plaintiffs claim regarding property rights, and therefore dismissing the application for certification of the entire public of the State of Israel. Yet accepted the appeal with regards to the statute of limitations claim, and ruled that application for certification is approved regarding a limited class constituting visitors at the Bokek stream. In accordance therewith, the application for certification limited to such group shall be reviewed by the District Court. For further information, see Note 18 to our Audited Financial Statements.
Part of the environmental challenges that our Rotem Israel site faces and deals with include environmental class actions against the Company that also pertain to environmental damages originating in the period that ICL was owned by the Israeli government prior to its privatization.
ICL R&D Beer Sheva - A soil survey was conducted, the results of which point to soil contamination. ICL is acting in accordance with the survey's findings and related MoEP guidelines.
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lCL Periclase - Brine, a non-hazardous substance, leaked from a ruptured pipeline in a nature reserve. No significant damage was recorded. Several hundred meters of pipelines were replaced, and we intend to replace additional pipelines within the Dead Sea Works area by the end of 2024.
Brazil - After conducting soil surveys at our Brazilian sites, we identified some immaterial historical soil and groundwater contamination. In response, we are actively engaged in remediation efforts, while maintaining close cooperation with governmental agencies and local regulators.
Biodiversity
Biodiversity, also called biological diversity, is the variety of life found in a place on Earth. A common measure of this variety, called species richness, is the count of species in an area. We recognize the need to consider environmental factors when using land and managing our operations, particularly in ecologically sensitive areas, including areas with unique cultural value. We are committed to ongoing consideration of the impact of our activities on biodiversity in our decision making.
Examples regarding our management of biodiversity at some of our mining sites includes the following:
ICL DSW - Sodom Saltmarsh Lake. The Ashalim reservoir, located south of ICL’s Dead Sea site is a wet habitat, situated within a typical arid habitat. It is abundant with rich biological diversity. ICL Dead Sea, whose excavations in the region created this wet habitat, takes extra measures to preserve it and invests in making this unique habitat accessible to the public. In the past, the Sodom salt flats area was a resting stop and habitat for migratory birds. Today, due to changes in the land’s use for agriculture, residential and industrial purposes, almost no salt flats remain. These flats have unique characteristics with high salinity in the soil and unique species that have adapted to these extreme conditions. The salt flats in Israel are a rare habitat and have been shrinking over time. The Sodom Saltmarsh Lake has become a salt flat substitute. Over the past few years, the lake has had relatively good water quality year‑round and we are continuously monitoring the lake to measure its water quality. Vegetation has also been planted in a stable water environment. The lake is now used as a resting spot for migrating birds and as a nesting site for a wide range of species.
Rotem Israel - Since 2016, Rotem Israel has been participating in academic cooperative research with Ben Gurion University of the Negev which examines the ecological and biodiversity effectiveness of mine reclamation. The parameters being researched include soil chemistry, soil microbiology, vegetation growth potential, abundance, arthropod animals and remote sensing land analysis. Following the initial research results and as part of the rehabilitation process, we are creating micro-topography to diversify the landscape. We also collected seeds from the field to create a seed bank in order to contribute to the rehabilitation and recovery of vegetation in reclaimed areas.
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ICL Boulby - Adjacent to ICL Boulby’s mining facilities, and within its operational area, are non-developed turfs where important habitats and species flourish. Most notable are the woodlands at Mines Wood and Ridge Lane Wood, near Dalehouse. These are some of the most wildlife-rich woodlands in the Northeast England/Yorkshire areas. The woodlands are home to invertebrates, birds and mammals. For over a decade ICL Boulby has worked with the Industry Nature Conservation Association (INCA) to monitor and manage the wildlife that exists in proximity to the mine. Key to this process is a Site Biodiversity Action Plan (Site BAP), operated by ICL Boulby within its operational area. The Site BAP is designed to conserve key habitats and species which live at the site and is assisted by INCA annually. For further information, see “Item 4 – Information on the Company — D. Property, Plant and Equipment — Mineral Extraction and Mining Operations”.
Hazardous Substances
Some of the substances used in ICL’sat our facilities in Europeacross the world (such as raw materials, etc.) are considered to be hazardous substances. Requiredsubstances, as are some materials found in our finished products. These substances require government approvals and registrations for these substancesregistration which are acquiredsecured and maintained. Relevant safety measures and procedures for storage, use and handling are also implemented and maintained. In addition, to these measures only qualified suppliers and transport companies are used, and qualification and training of employees are conducted on a regular basis. All requirements based on the GHS (Globally Harmonized System of Classification, Labelling and Packaging of Chemicals) are acquired and maintained.
We are strongly committed to bringing safe products to the market that also have a reduced environmental impact, and we ensure full compliance with all regulations, laws, conventions, statures and standards related to chemical management. Accordingly, scientific information is generated on all our products in GLP-certified laboratories using worldwide testing guidelines (OECD, OPPTS). This includes physico-chemical properties, toxicological and environmental tests. The generated data ensures safer chemicals for people and the environment. The data incorporated into a formal dossier including chemical safety assessment which is submitted to relevant regulatory authority for evaluation and approval.
We are also devoted to communicating accurately information that reflects the scientific evidence used in making the hazard determination. Hazardous products produced or imported by ICL are classified in accordance with GHS/CLP criteria, and information concerning the classified hazards is transmitted to ICL customers and employees. The transmittal of information is accomplished by means of comprehensive hazard communication documentation including Safety Data Sheets (SDS), labels, letters to customers, declarations, and safety cards for employees. Emergency contacts for all regions appear on all our SDSs and labels.
Safety and Environmental Stewardship of Chemicals
ICL’s brand promise is to create impactful solutions for humanity’s sustainability challenges by leveraging our unique resources and technological ingenuity. As stated above, we are committed to the UN’s SDGs. ICL’s approach to developing new products and services is reflected in the alternative processes that we are applying. ICL’s RD&I practices have evolved in its perspective over the past few years, from supporting business continuity to adopting a “Sustainability Index” when developing new products. The index includes a GO/NO-GO decision-making analysis based on defined environmental criteria in the development of new products. We also incorporate Green Chemistry principles. The index was developed as a quantitative model for products in development, and its purpose is to set parameters for sustainable products in the development stage. We combine environmental, health and safety criteria with commercial and operational considerations. Potential products are rigorously tested using the index for product development. Index methodology is implemented in the R&D units of our Industrial Products, Phosphate Solutions and Growing Solutions segments. Each segment has its own specific variations to match its specific product types. Based on rating results, changes are incorporated into the development process. The objective is to develop the most sustainable products for the specific intended use. Products that are categorized as “NO-GO” are discontinued in the development stage and are not commercialized.
The next phase of our evolution includes using the UN SDG’s as conceptual guidelines in our RD&I strategy. Our RD&I unit is embedding impact strategy and criteria. The unit has developed a data-driven Impact Assessment Tool for all RD&I projects to support ICL’s actions on tackling climate change, advancing food security, promoting sustainable agriculture and contributing to human health, safety and wellbeing. This strategic component is part of our positive impact product development processes. We are also implementing Circular Economy and biomimicry concepts to reduce our environmental impact. Through our impact assessment tool, we scope potential and risk, define and optimize the potential for positive impact, and establish clear and measurable goals which are monitored and reported.
In addition, we are addressing various Green Chemistry principles both in the development of new products, as mentioned above, and during the use phase of our products. One example is our SAFR®-A Systematic Assessment for Flame Retardants. For our industrial products, we recommend best practices for using many of our products as part of the service we provide to our clients. The SAFR® methodology developed by ICL provides an evaluation of flame retardants in their applications, enabling users to select the most sustainable product for the intended use. SAFR® incorporates an estimated exposure component based on the level of contact to humans and/or the environment and measurable potential emissions of flame retardants during their use. The assessment of a given flame retardant with SAFR® leads to the identification of uses that are either recommended, acceptable, not recommended or an unacceptable hazard in which case alternatives should be identified. We are planning to add chemical attributes that identify the best choice for End of Life, Recyclability and Re-use. This will make the SAFR® tool better equipped to support Circular Economy.
Limitation Regulation and Registration of our Products
As a global specialty minerals company, we are subject to multiple rules and regulations in terms of product safety. We ensure that the substances we produce and sell are handled in accordance with all such rules and regulations throughout their life cycle. These rules and regulations, among other things, impose limitations on the use of specific substances and products, and require us to register and label some of our products. We continuously monitor these rules and regulations and take the necessary operational measures to ensure that we remain in material compliance with them. For further information, see “Item 3 - Key Information— D. Risk Factors".
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Industry Associations
We are an active member of several industry associations to safeguard our products. The most prominent associations include the International Bromine Council (BSEF) which promotes the benefits of bromine and bromine technologies for society and economy, the North American Flame Retardant Association (NAFRA), which promotes the benefits of flame retardants in the Americas and Canada, and the Phosphorus, Inorganic and Nitrogen Flame Retardants Association (PINFA), which works in partnership with stakeholders (NGOs, environmental entities, consumer associations, scientists, regulators, fire safety experts, user industries, etc.) to ensure the safe use of flame retardant products.
ICL is also a member of the European Chemical Industry Council (CEFIC) and the American Chemistry Council (ACC), where we are members of various task forces to ensure that we remain in compliance with Responsible Care and Sustainability programs.
These collaboration and network activities help us to work and relate to new classifications and regulations in the bromine compounds industry. The trade associations’ group activities, which include ICL, work diligently, to avoid unnecessary classifications with the help of additional external experts in the field of toxicology and other respective disciplines.
New European Fertilizer Product Regulation (hereinafter – FPR)
FPR covers a broad scope of materials, including all types of fertilizers, liming materials, biostimulants, growing media, soil improvers, inhibitors and other blends of these materials. The new regulation requires fertilizer producers to monitor new contaminating elements in fertilizer products. In addition, pursuant to FPR, fertilizer producers will have to demonstrate the ability to track their products to ensure their quality in the production and supply chain. The labelling of fertilizer products will need to change, and conformity assessment methodologies will need to be updated. Moreover, new tolerance levels for fertilizer contaminants are included in the FPR. One area of focus is the level of cadmium in fertilizers containing phosphate. In addition, FPR includes very challenging biodegradation requirements for polymer coatings on controlled release fertilizers. These requirements need to be established by ICL by July 2026 for its continued sale of controlled release fertilizers. We are actively undertaking steps to adjust to these new regulations for all our relevant products.
The topic of biodegradable criteria is high on the agenda. By July 2024 the delegated act must be available, and testing requirements will be known by such date. Our first biodegradable coating is already on the market (eqo.S/eqo.X). ICL is working on additional specific coating materials to cover the biodegradability and the polymeric as well as the microplastic impact.
Micro-plastics
On September 25, 2023, the European Commission adopted measures that restrict microplastics intentionally added to products under the EU chemical legislation, REACH. The new rules will prevent the release to the environment of about half a million tonnes of microplastics. They will prohibit the sale of microplastics as such, and of products to which microplastics have intentionally been added and that release those microplastics when used. When duly justified, derogations and transition periods for affected parties to adjust to the new rules apply.
Our main products which are subject to these requirements are fertilizers, and to a lesser extent, other products such as flame retardants. We are closely observing the changes in requirements to remain in compliance.
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PFAS
In February 2023, The European Chemical Agency (ECHA) published details of a proposed ban on the production, use, sale and import of some 10,000 PFAS. The purpose of the ban is to keep PFAS out of the environment. The European Commission is slated to present the proposal to Member States formally in 2025. If passed, it would constitute one of the largest chemical substances bans ever in Europe.
We are looking to actively replace any potential PFAS uses and have already limited them to a small extent.
New Chinese Polysulphate standard
In 2021, a new industry standard for Polysulphate (as a fertilizer) was published in China. ICL has defined the options to meet these new requirements and the effect of the new standard on the supply of Polysulphate to the Chinese market.
| 1. | In December 2023, ICL’s Polysulphate STD temporary registration renewal request was rejected. We are in close contact with the Ministry of Agriculture (MoA) on the possibility of extending the registration for the interim period. |
| 2. | We have begun to work on registering Polysulphate under the new category of a soil conditioner. Field trials are currently on-going and will require three years. The results are expected by the end of 2024. |
Chemicals Regulation and Registration
Europe and UK
The EU has established one of the world’s most comprehensive chemical regulatory frameworks known as REACH, which establishes a framework for registration, evaluation, authorization and restriction of chemicals in the EU. Chemicals imported or manufactured in the UK are regulated by a new chemical regulation called UK REACH.
All our segments have implemented REACH and are registering their chemicals as required by law. We believe that we have registered all chemicals relevant to our businesses in the EU (production and import) as of the date of this Report. In addition, certain products are in the process of evaluation under the Biocides Products Regulation (BPR).
A number of ICL substances are under REACH evaluation including specific products of the Industrial Products segment. Some substances have been designated as a ‘Substance of Very High Concern’ (SVHC), which may lead to certain regulatory restrictions.
ICL is preparing for this outcome by introducing new, alternative products for those market segments where they are required. In addition, we and our industry partners are actively involved in the regulatory process to ensure that decisions are made on valid grounds and to determine where safe use can be proven to safeguard the market where no risk to people or the environment is expected. For further information, see “Item 3 - Key Information— D. Risk Factors".
The European Commission’s Ecodesign E-Display regulation, which has been in force since March 2021, bans the use of halogenated flame retardants in electronic display enclosures. We are closely monitoring future developments and proactively engaged in innovative chemical design, informative chemical selection tools and end of life solutions to respond to these challenges.
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Borate salts and boric acid – Some of our products will have to change their classification (SDS, labeling) due to the reproductive classification of concentration limit. The industry has already expressed a requirement to re-formulate to exclude these salts and ICL is working on respective solutions and replacements.
Ammonium Bromide:
| - | In December 2023, the proposed classification as reproductive toxin category 1B under the Classification, Labelling & Packaging (CLP) EU Regulation came into force. |
| - | The BPR final expected decision on the use of biocides using ammonium bromide as a precursor is unknown at this stage. |
The impact on the business of Industrial Products segment is very limited.
Flame retardants
In March 2023, ECHA released a Regulatory Strategy for Flame Retardants, focusing on halogenated and organophosphorus variants, constituting 70% of the organic flame-retardant market. The strategy prioritizes brominated flame retardants, particularly aromatic ones, for restriction, following the Restrictions Roadmap. Future assessments will address non-halogen and organophosphorus flame retardants. Aromatic brominated variants raise concerns due to PBT/vPvB properties, warranting minimized release. Aliphatic brominated and organophosphorus flame retardants exhibit diverse human and environmental hazards, with ongoing data generation to verify potential risks. Proposed restriction proposals await conclusive data from ongoing studies. The following assessments of regulatory needs that effects flame retardants were published by ECHA:
Tetrabromobisphenol A (TBBPA or TBBA) flame retardant is under review as part of REACH. The result of the review is that TBBA is classified as a Carcinogen 1B and is added to the list of SVHC. Currently, the advocacy team is working diligently to maintain the reactive use. TBBPA is also being assessed for PBT/vPvB. Ongoing studies are expected to yield results in 2025.
Fyrol PCF (TCPP) – an NTP study was released concluding that TCPP was carcinogen at highly elevated exposures. Europe is moving to list the chemical as Cat. 1B thus imposing new restrictions on selected consumer uses. In other applications, like insulation, industry consortiums have calculated large safety margins for TCPP exposures related to these products. The industry intends to classify TCPP as Cat. 2 based on its own assessment, until harmonized classification is enforced. Furthermore, a discussion concerning the potential ED (Endocrine disrupter) properties of TCPP is still ongoing, adding another layer of complexity to the regulatory considerations surrounding this chemical.
We are actively engaging with ECHA and EC through an advocacy approach to understand their information requirements and to provide input for science-based decision making on any potential restrictions, aiming to avoid or minimize the impact on both ICL as well as the industry as a whole. In addition, our R&D departments are identifying potential alternative products.
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EU Chemicals Strategy for Sustainability
In addition to REACH and the various chemical-specific limitations described above, the European Commission has introduced a new Chemicals Strategy for Sustainability (CSS).
CSS was launched in October 2020 to provide a new long-term strategy for chemicals related policy, in line with the aims of the EU Green Deal. The strategy contains around 80 action points, which may have a significant impact on existing or future legislative frameworks such as CLP (Classification, Labelling and Packaging Regulation) and REACH.
The EU has introduced new hazard classes to CLP regulation: Endocrine Disruptors (ED), Persistent, Bioaccumulative and Toxic (PBT) & Persistent, Mobile &Toxic (PMT) that will be used to classify chemicals and introduced in SDSs and on labels.
ICL participates in CEFIC Task Forces to collaboratively address the issues in the CSS. In addition, we play a leading role as an active member of BSEF and PINFA, engaging in discussions with EU authorities, Member States and regulators. Our aim is to prevent flawed regulations that could undermine our strategic goals within the flame-retardant industry.
The US
The Toxic Substances Control Act of 1976 (TSCA), which was reformed in 2016, addresses the production, importation, use, and disposal of specific chemicals in the US. The TSCA is administered by the US Environmental Protection Agency (EPA), which regulates the introduction of new and existing chemicals. Some ICL products, such as TBBA, are under TSCA evaluation. We are engaged in collaborative industry consortiums that are responding to EPA reviews, which may entail regulatory decisions on restrictions.
The Washington State Department of Ecology (WA DOE) has moved to ban halogenated flame retardants in indoor consumer electronic casings, while allowing exemptions for certain applications such as cars and outdoor goods, etc. We are actively collaborating with OEMS (Original Equipment Manufacturers) and WA DOE to establish a process for companies to request additional exemptions.
Our efforts have produced notable exemptions for automotive, aerospace, outdoor goods, appliances, and spare parts. The proposed regulation has been elevated at the WTO, and Korea, China and Japan plan to oppose such regulation.
We are also engaged in additional activities, including the following:
Regarding food ingredients, a US petition exists to increase the levels of sodium alginate used in plant-based products. This has a positive impact on specific ICL formulas.
The FDA has created a proposal to expand its standard of identities for foods to include salt substitutes. ICL is working on a variety of products to use the approach.
The EPA has released final guidance for pesticide submissions for new outdoor uses that require endangered species act reviews.
Like the EU, the US is implementing an Endocrine Disruptor Screening Program (EDSP) with near-term strategies for implementation. From the experience ICL is gaining in the EU, the preparation of appropriate data will be assured.
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The FDA has announced the annual monograph forecast which includes testing procedures for fluoride dentifrice products. ICL is monitoring the forecast for any impact on its product.
A final ruling under the Toxic Substances Control Act (TSCA) will require all manufacturers (including importers) of PFAS and PFAS-containing articles in any year since 2011 to report information to the EPA on PFAS uses, production volumes, disposal, exposures, and hazards. Reporting is due by May 8, 2025. This will be coordinated with the EU requirements to combine the efforts.
California's Proposition 65 proposed sweeping changes related to warning requirements.
Furthermore, we expect numerous anticipated rulemakings for PBTs and NANO materials and will implement those in our respective strategies.
Canada
Following public concern and pushback from various stakeholders, including under our NAFRA banner, the Canadian government has postponed any final decisions on ECCC's proposed market restrictions on DecaEthane until 2024. The proposal, despite offering extended compliance timelines for key industries, continues to face strong opposition in the marketplace. Notably, Japan, Korea, the US, and other countries plan to contest the regulation at the WTO.
Asia
In addition to REACH requirements in the EU, other countries, including South Korea, Turkey and EAEU (Eurasian Economic Union), have adopted, or are in the process of adopting, restrictive regulations like REACH which may affect our ability to manufacture and sell certain products in these countries in the future. We are actively working to ensure compliance within the specified deadlines.
Israel
Following Israel's acceptance into the OECD in 2010, Israel's MoEP published a draft law to establish a national repository of industrial chemicals and established processes for risk assessment and management of chemicals in Israel.
The law will apply to the manufacture, import or placement on the market of products over 10 tonnes. Once this new regulation enters into force, it is expected that it will have an impact on ICL, and other importers and manufacturers in Israel, including additional costs and complex administrative processes.
We are actively involved, via the Israel Manufacturers Association, in providing input regarding the proposed law.
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Brazil
Fertilizers
In Brazil, fertilizers are regulated by various laws, decrees and norms. A recent "Self-Control Law" was enacted in December 2022, altering responsibilities for agricultural product quality between the government, industry, and growers. This requires a review of the relevant decree, with significant changes including higher penalties for infractions. Associations like Abisolos and Anda, in which ICL is a member, are engaging with the Ministry of Agriculture Brazil (MAPA) to shape the new decree. Industry efforts aim to enhance the legislation to incorporate innovations like the use of microorganisms as additives in fertilizers.
Food
Recently, a Brazilian regulation was published which establishes the technological functions, maximum limits and conditions of use for food additives and technology aids authorized for use in foods which, among other changes, proposes the modification of the nomenclature of phosphates. This change impacts the labeling of products that are composed of this additive. As a result, the nomenclature of some of the phosphates has already been changed. ICL is closely monitoring which further actions should be taken, and it will seek to work with industry associations to demonstrate the impact of these changes on the food sector in Brazil.
Food Grade Products Regulations
Our food additives are strictly regulated by a wide range of legislation and global standards, established by national agencies such as the European Commission, the US Food and Drug Administration (FDA) and the National Health Commission State & Administration of Market Supervision in China.
Regulatory developments in the food sector are dynamic and frequently reviewed and/or assessed by regulators and periodically updated in order to assure a high level of protection of human life and health. These developments are being closely monitored by us, and we introduce appropriate adjustments to our product portfolio as needed, in accordance with the revised requirements.
Our food grade products are produced in plants certified for food production. Therefore, all our food plants implement quality and food safety systems that are monitored by internal and external audits. For further information, see “Item 3 - Key Information— D. Risk Factors".
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Business Licenses and other permits
In the ordinary course of our business activities, we hold business licenses, permits and receive governmental approvals that are related to environmental, health and safety, and that are issued by various regulatory agencies to operate our facilities. We may be required to obtain or renew such licenses, permits, and governmental approvals in the future to continue our current or future operations throughout the world. We strive to comply with the terms and conditions set forth in our business licenses and permits, as applicable, and in the event of any non-compliance, we act to alter our activities in full coordination with the relevant agencies.
In January 2024, ICL Terneuzen (IPT) was granted a new environmental permit, as part of which, IPT is obliged to perform studies and improve its overall performance. The new permit includes several environmental requirements, including air emissions and wastewater treatment, which require investments over the next several years. As stipulated in the permit, upon update of the material listed in the continuously changing Substances of Very High Concern (SVHC) list, adaptive actions will be required. In addition, IPT continues to work together with the Dutch authorities to close any relevant gaps, as identified in a gap analysis conducted in 2021. IPT expects the authorities to approve its three-year compliance plan by March 2024. For further information, see “Item 3 - Key Information— D. Risk Factors.”
Water Wells Production Permits
Water supply to DSW is accomplished via approximately 40 drillings, most of which are located within the concession area. The drillings require a drilling license issued by the Water Authority.
The seven "Ein-Ofarim" drills are located outside the concession area, and DSW is therefore required to sign, from time to time, lease contracts for limited periods with the Israel Land Authority (ILA). The contracts renewal process is lengthy, and DSW has been working for several years to renew them. As of today, all seven contacts have been renewed until 2026.
In addition, At the beginning of every year, the Water authority issues the Company with a water production license that defines the production capacity of each drilling.
ICL Iberia - ICL Iberia's past activities have resulted in the salinization of some water wells in the Suria and Sallent sites. A remediation plan has been presented to the authorities and actions have begun to be implemented with satisfactory results. For further information, see note 17 to our Audited Financial Statements.
In 2017, the Israeli Water Law was amended, according to which saline water of the kind produced for Dead Sea plants by the Company's own water drilling is charged with water fees. In October 2021, as a response to the Company’s objection to the charges relating to water drilling within the concession area, the Water Authority informed the Company that water fees will not be charged for water production within the concession area. This decision was based on the opinion of the Ministry of Justice, according to which the royalty's arrangement established in the Dead Sea Concession Law, 5771-1961, is the sole arrangement for collecting payment for the right to extract water in the concession area, and, therefore, it is not legally possible to impose additional charges for water fees in addition to the royalties (hereinafter – the Opinion). In September 2022, the Company was presented with two petitions filed in Israel’s Supreme Court, one by Adam Teva V’Din, and the second by Lobby 99 Ltd., against the Water Authority, Israel’s Attorney General, the Ministry of Justice, Mekorot Water Company Ltd. and the Company. For further information, see Note 18 to the Audited Financial Statements.
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C. ORGANIZATIONAL STRUCTURE
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D. PROPERTY, PLANT AND EQUIPMENT
The Company operates production facilities in its worldwide locations, including the following:
| Europe: |
The Netherlands: Production plants of the Industrial Products segment at Terneuzen are owned by the Company. A facility of the Phosphate Solutions and Growing Solutions segments in Amsterdam is held under a lease until 2040.
Spain: Concessions at the potash and salt mines are held under concession agreements described below. Potash and salt production plants, warehouses and loading and unloading facilities of the Potash segment at Catalonia are owned by the Company. The Growing Solutions segment also owns a liquid fertilizer and soluble fertilizer production plant in Totana, owns another plant for mixing solid fertilizers in Los Patohos and has a concession in Cartagena port until 2024. Most of ICL Iberia's shipments are made via a terminal it owns at the port of Barcelona (Trafico de Mercancias – Tramer).
UK: Rights to polyhalite and salt mines are held under concession agreements described below. Polyhalite and salt production plants and warehouses of the Potash segment in Cleveland are owned by the Company. The warehouses and bulk loading and unloading facilities at the port are leased until 2034. The company owns three peat moors of the Growing Solutions segment and a plant for producing growing media in Scotland. The Growing Solutions segment also owns a plant in Daventry for producing water conservation and liquid plant nutrition products along with a fertilizer blending site in Rugby.
Belgium: The Growing Solutions segment owns a production facility in Grobbendonk for producing water soluble fertilizers.
Austria: A dairy protein production plant of the Phosphate Solutions segment at Hartberg (Prolactal) is owned by the Company.
| North and South America: |
Brazil: the production plant of ICL Food Specialties at Sao Jose dos Campos is leased by ICL. The productionProduction plants of ICL Advanced Additivesthe Phosphate Solutions segment at Sao Jose dos Campos and Cajati are owned by the Company.
Production plants of the Growing Solutions segment at Suzano I and Suzano II (liquid fertilizers, water-soluble fertilizers, animal nutrition, micronutrients fertilizers), at Uberlandia (improved efficiency phosphorus fertilizers), at Jacarei I (secondary nutrients fertilizers), at Maua (micronutrients fertilizers), at Cruz Alta (liquid fertilizers) and at Cidade Ocidental (liquid fertilizers) are owned by the Company. The production plant at Jacarei II (controlled-release fertilizers) is leased by ICL.the Company.
| Asia: |
China – phosphatePhosphate rock mining rights inat the Haikou Mine and Baitacun Mine are derived from mining licenses that are described below. The scrubbing plantYPH's plants are owned by the Company, some of them located on land that is owned by the Company, andwhile others are situated on leased land.
Principal Properties
The following table sets forth certain additional information regarding ICL’s principal properties as atof December 31, 2017.2023:
| Property Type | Location | Size (square feet) | Products | Owned/Leased |
| Plant | Mishor Rotem, Israel | Owned on leased land | ||
| Plant | Mishor Rotem, Israel | 10,763,910 | Owned on leased land | |
| Plant | Neot Hovav, Israel | 9,601,591 | Owned on leased land | |
| Plant | Zin, Israel | Owned on leased land | ||
| Plant | Kiryat Ata, Israel | 6,888,903 | Leased | |
| Plant | Oron, Israel | Owned on leased land (on a lease extension process) | ||
| Evaportation ponds | Sodom, Israel | 1,603,823K | Salt and carnallite ponds | Lease rights |
| Plant | 13,099,679 | Potash products (not including ponds and Magnesium plant) | Owned on leased land | |
| Plant | 4,088,800 | Magnesium products | Owned on | |
| Plant | 2,326,060 | Owned on leased land | ||
| Conveyor belt | 1,970,333 | Transportation facility for | Owned on leased land | |
| Pumping stations | ||||
| Pumping station for | Owned on leased land |
| Plant | 667,362 | Owned on leased land | ||
| Feeding canal | 5,974,980 | Part of the pumping system for the Potash segment | Owned on leased land | |
| Power plant | 645,856 | Power and steam production for the Potash segment | Owned on leased land |
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| Warehouse and loading facility | Ashdod, Israel | 664,133 | Warehouse for | |
| Owned on leased land | ||||
| Beer Sheva, Israel | ||||
| Leased | ||||
| Plant | Mishor Rotem, Israel | Owned on leased land | ||
| Warehouse and loading facility | Eilat, Israel | 152,557 | Warehouse for | |
| Owned on leased land | ||||
| Headquarters | Tel Aviv, Israel | Company headquarters | Leased | |
| Plant | Catalonia, Spain | 48,491,416 | Mines, manufacturing facilities and warehouses for | Owned |
| Port/warehouse | Catalonia, Spain | 866,407 | Potash and salt products | Owned on leased land |
| Plant | Totana, Spain | 2,210,261 | Owned | |
| Plant | Cartagena, Spain | 209,853 | Owned | |
| Warehouse and loading facility | Cartagena, Spain | 184,342 | Storage for | Leased |
| Plant | ||||
| Owned on leased land | ||||
| Headquarters | ||||
| Leased | ||||
| Plant | Kunming, Yunnan, China | |||
| Owned | ||||
| Plant | Kunming, Yunnan, China | |||
| Pumping station | Kunming, Yunnan, China | A pumping station for | ||
| Peat Moor | Nutberry and Douglas Water, United Kingdom | 17,760,451 | Peat mine | Owned |
| Plant | Cleveland, United Kingdom | 13,239,609 | Owned | |
| Warehouse and loading facility | Cleveland, United Kingdom | 2,357,296 | Polysulphate products (Growing Solutions segment) | Owned on leased land |
| Peat Moor | Creca, United Kingdom | 4,305,564 | Peat mine | |
| Owned | ||||
| Plant | Nutberry, United Kingdom | 322,917 | Owned | |
| Plant | Daventry, United Kingdom | 81,539 | Growing Solutions products | Owned and leased |
| Plant | Terneuzen, the Netherlands | 1,206,527 | Owned | |
| Plant & warehouse | Lawford Heath, Rugby | 45,000 | Growing Solutions products | Leased |
| Plant | Heerlen, the Netherlands | 481,802 | Owned and leased | |
| Plant | Amsterdam, the Netherlands | 349,827 | Owned on leased land | |
| European Headquarters | Amsterdam, | 59,055 | Leased | |
| Plant | Gallipolis Ferry, West Virginia, United States | 1,742,400 | Owned | |
| Plant | Lawrence, Kansas, United States | 179,689 | Owned | |
| Plant | Carondelet, Missouri, United States | Owned | ||
| Plant | North Charleston, South Carolina, United States | 100,000 | Leased | |
| Plant | Summerville, South Carolina, United States | 40,000 | Leased | |
| US headquarters | St. Louis, Missouri, United States | US Company headquarters | Leased | |
| Plant | Ludwigshafen, Germany | |||
| Leased | ||||
| Plant | Ladenburg, Germany | 1,569,764 | Owned | |
| Plant | Bitterfeld, Germany | 514,031 | Owned | |
| Plant | Cajati, Brazil | Owned |
| Plant | Sao Jose dos Campos, Brazil | Phosphate plant: 137,573 Blending plant: 80,729 | Owned on | |
| Plant | Brazil Cidade Ocidental | 8,275 | Growing Solutions products | Owned |
| Plant | Brazil Cruz Alta | 7,499 | Growing Solutions products | Owned |
| Plant | Brazil Jacarei I | 879,248 | Growing Solutions products | Owned |
| Plant | Brazil Jacarei II | 967,987 | Growing Solutions products | Leased |
| Plant | Brazil Maua | 968,751 | Growing Solutions products | Owned |
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| Plant | Brazil Suzano I | 3,349,186 | Growing Solutions products | Owned |
| Plant | Brazil Suzano II | 637,001 | Growing Solutions products | Owned |
| Plant | Brazil Uberlandia | 263,716 | Growing Solutions products | Owned |
| Plant | Belgium | 128,693 | Owned | |
| Plant | Calais, France | Owned | ||
| Plant | Bandırma, Turkey | 375,187 | Owned | |
| Plant | Hartberg, Austria | 692,937 | Owned | |
| Plant | Heatherton, Australia | 64,583 | Leased |
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Mineral Extraction and Mining Operations
Information included in this section relates to the mineral extractions and mining operations of ICL for fiscal years 2023, 2022 and 2021. This information was prepared based on, and in some instances is an extract from, the report titled “Technical Report Summary and Resource Estimate” with an effective date of December 31, 2021 (the “Technical Report Summary”) and prepared for us by our qualified person, Wardell Armstrong International Ltd (“Wardell”). Wardell has approved and verified the scientific and technical information included in the Technical Report Summary and reproduced and approved the updated MINERAL RESERVES AND RESOURCES information in this Annual Report for Fiscal Years 2023, 2022 and 2021. Portions of the following information are based upon assumptions, qualifications and procedures that are not fully described herein. See “Cautionary Note to Investors Regarding Mineral and Resource Estimates.” Reference should be made to the full text of the Technical Report Summary, which is included as an exhibit to this Annual Report.
Overview
ICL extracts minerals and conducts mining activities at ICL Boulby (United Kingdom), ICL Iberia (Spain), ICL Rotem and ICL Dead Sea (both located in Israel), and YPH (China).
Figure 1: Location of the ICL Operations
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ICL’s mining activities are dependent on concessions, authorizations and permits granted by the governments of the countries in which the mines are located.
ICL Rotem has been mining phosphates in the Negev in Israel for more than sixty years. The mining is conducted in accordance with a phosphate mining concession, which is granted as required by the Israel's Minister of Energy under the country's Mines Ordinance, as well as mining authorizations issued by the Israel Lands Authority. The concessions ICL pays royalties and taxesrelate to quarries (phosphate rock), whereas the governmentsauthorizations cover the use of Israel, China, UK and Spain. Below are the royalty amounts paid in 2017, 2016 and 2015: land as active mining areas.
| 2017 * | 64 | 4 | 68 |
| 2016 | 58 | 9 | 67 |
| 2015 * | 101 | 5 | 106 |
ICL currently operates large surface phosphateIberia holds mining sites at Oron, Rotem and Zin, which are located in the southern part of the State of Israel in the Negev region. The Israeli Minister of National Infrastructures under the Israeli Mines Ordinance, through the Supervisor of Mines in his Office (“the Supervisor”), has decided to extend the area of the Rotem field concession (valid until the end of the 2021) so that it covers the Hatrurim field. The area of the Rotem concession has been so extended, and the matter has been transferred to the Israel Lands Authority (“ILA”) to deal with the extension of the area of the mining permitrights for the Rotem field, in line with the extension of the concession area.
| Year Ended December 31, | |||
| 2017 | 2016 | 2015 | |
| Millions of metric tons produced | 7 | 9 | 9 |
| Grade (% P2O5 before/after beneficiation) | 26/32 | 26/32 | 26/32 |
| Year Ended December 31, | |||
| 2017 | 2016 | 2015 | |
thousands of metric tons | thousands of metric tons | thousands of metric tons | |
| Phosphate Rock | 3,332 | 3,947 | 3,848 |
| Green Phosphoric Acid | 575 | 602 | 600 |
| Fertilizers | 957 | 890 | 641 |
| White Phosphoric Acid | 148 | 161 | 153 |
| MKP | 68 | 47 | 52 |
ICL Boulby is an underground polyhalite mine in the production stage, located in the UK, of which ICL owns the freehold of approximately 3.82 sqkm of the mineral field, with the remainder based on leases. Cleveland Potash Limited (ICL Boulby) is a wholly owned subsidiary that operates the Boulby mine, which has granted35 mining leases which cover a total area of 810.43 sqkm, primarily offshore.
YPH, equally owned by ICL and Yunnan Phosphate Chemicals Group Corporation Ltd. ("YYTH"), and controlled by ICL, owns and operates the Haikou Phosphate Mine and processing facility in the Xishan district of China. YPH holds the phosphate mining license for the Haikou Mine covering 9.6 sqkm, which the Company operates and is in the production stage.
In consideration of the concessions, ICL pays royaltiesand taxes to conduct mining operations under the land. See “Item 4 - Information ongovernments of Israel, China, UK and Spain. Below are the Company— D. Property, Plantroyalties' amounts paid with respect to 2023, 2022 and Equipment— Concessions and Mining Rights”.2021:
| Israel | Out of Israel | Total | ||
| Year Ended December 31, | $ millions | NIS millions | $ millions | |
| 2023 | 170 | 626 | 10 | 180 |
| 2022 | 95 | 317 | 8 | 103 |
| 2021 | 75 | 242 | 6 | 81 |
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The Cabanasasaggregated production data for the properties is summarized in Table 1.
Table 1: Production Data for the Properties
| Production Data for ICL Boulby | |||
| 2023 | 2022 | 2021 | |
| Polyhalite hoisted (kt) | 1,028 | 947 | 784 |
| Total Polyhalite Production (kt) | 1,009 | 953 | 789 |
| Potash Production at Súria Plant, ICL Iberia | |||
| 2023 | 2022 | 2021 | |
| Ore hoisted from Cabanasses mine | 2,795 | 2,928 | 2,534 |
| Head Grade % KCl | 24.3% | 25.3% | 26.4% |
| KCl Produced (kt) | 601 | 680 | 614 |
| Product Grade % KCl | 95.5% | 95.3% | 95.5% |
| Total Mine Production of raw ore at Rotem Israel | |||
| 2023 | 2022 | 2021 | |
| Tonnes mined (kt) | 5,770 | 4,488 | 4,893 |
Grade (%P2O5 before / after beneficiation) | 25% / 32% | 26% / 32% | 26% / 32% |
| Product Produced after processing at Rotem Israel (kt) | |||
| 2023 | 2022 | 2021 | |
| Phosphate Rock* | 2,309 | 2,170 | 2,431 |
| Green Phosphoric Acid | 520 | 508 | 531 |
| Fertilizers | 1,033 | 1,044 | 1,082 |
| White Phosphoric Acid (WPA) | 150 | 176 | 168 |
| Specialty Fertilizers | 78 | 95 | 72 |
* Figures relate to phosphate concentrate produced by the Oron and Vilafruns minesRotem beneficiation plants for further processing at Rotem facilities.
| DSW Production (kt) | |||
| 2023 | 2022 | 2021 | |
| Potash | 3,819 | 4,011 | 3,900 |
| Compacting plant* | 1,737 | 1,561 | 1,858 |
| Bromine | 143 | 178 | 182 |
| Cast Mg | 17 | 22 | 18 |
* Figures relate to granular potash produced from total potash
| Total Mine Production of raw ore at YPH | |||
| 2023 | 2022 | 2021 | |
| Tonnes mined (kt) | 3,646 | 3,223 | 2,656 |
Grade (% P2O5 before/after beneficiation) | 22% / 28% | 22% / 28% | 21% / 28% |
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| Product Produced after processing at YPH (kt) | |||
| 2023 | 2022 | 2021 | |
| Phosphate Rock * | 2,657 | 2,497 | 2,194 |
| Green Phosphoric Acid | 682 | 676 | 673 |
| Fertilizers | 609 | 611 | 612 |
| White Phosphoric Acid | 95 | 94 | 83 |
| Specialty Fertilizers | 113 | 92 | 76 |
* Figures relate to phosphate concentrate produced by the flotation and scrubbing plants for further processing at the 3C chemical plant.
Table 2: Estimated Mineral Resources as of December 31, 2023 (1)
| Measured Mineral Resources | Indicated Mineral Resources | Measured + Indicated Mineral Resources | Inferred Mineral Resources | |||||
Amount (Mt) | Grades/ qualities | Amount (Mt) | Grades/ qualities | Amount (Mt) | Grades/ qualities | Amount (Mt) | Grades/ qualities | |
| Commodity: K2O | ||||||||
| United Kingdom | - | - | 38.9 | 13.3% | 38.9 | 13.3% | 9.3 | 13.3% |
| Boulby | - | - | 38.9 | 13.3% | 38.9 | 13.3% | 9.3 | 13.3% |
| Total | - | - | 38.9 | 13.3% | 38.9 | 13.3% | 9.3 | 13.3% |
| Commodity: KCl | ||||||||
| Spain | 90.0 | 25.8% | 63.6 | 25.0% | 153.6 | 25.5% | 277.9 | 27.4% |
| Cabanasses | 77.4 | 25.0% | 54.2 | 23.8% | 131.6 | 24.5% | 247.2 | 27.2% |
| Vilafruns | 12.6 | 31.0% | 9.4 | 32.1% | 22.0 | 31.5% | 30.7 | 28.9% |
| Israel | 225.0 | 20.0% | 1,500.0 | 20.0% | 1,725.0 | 20.0% | 445.0 | 20.0% |
| Mine/Property DSW | 225.0 | 20.0% | 1,500.0 | 20.0% | 1,725.0 | 20.0% | 445.0 | 20.0% |
| Total | 315.0 | 21.7% | 1,563.6 | 20.2% | 1,878.6 | 20.4% | 722.9 | 22.8% |
Commodity: P2O5 | ||||||||
| Israel | 265.2 | 27.4% | 10.0 | 26.0% | 275.2 | 27.3% | - | - |
| Rotem | 265.2 | 27.4% | 10.0 | 26.0% | 275.2 | 27.3% | - | - |
| China | 3.0 | 22.3% | 2.3 | 24.0% | 5.3 | 23.0% | 0.2 | 20.0% |
| YPH | 3.0 | 22.3% | 2.3 | 24.0% | 5.3 | 23.0% | 0.2 | 20.0% |
| Total | 268.2 | 27.3% | 12.3 | 25.6% | 280.5 | 27.2% | 0.2 | 20.0% |
| (1) | Mineral Resources are exclusive of Mineral Reserves. |
| (2) | Mineral Resource estimates are not precise calculations, being dependent on the interpretation of limited information on the location, shape, and continuity of the occurrence and on available sampling results. |
| (3) | All figures in the above table have been rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (4) | Mineral Resources are classified in accordance with the guidelines of the Australian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves JORC Code (2012) for ICL Boulby, Cabanasses and Vilafruns, and the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results (2021) for Rotem Israel, DSW and YPH. |
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Table 3: Estimated Mineral Reserves as of December 31, 2023 (1)
| Proven Reserves | Probable Reserves | Total Reserves | ||||
| Amount (Mt) | Grades/ qualities | Amount (Mt) | Grades/ qualities | Amount (Mt) | Grades/ qualities | |
| Commodity: K2O | ||||||
| United Kingdom | - | - | 7.6 | 13.5% | 7.6 | 13.5% |
| ICL Boulby | - | - | 7.6 | 13.5% | 7.6 | 13.5% |
| Total | - | - | 7.6 | 13.5% | 7.6 | 13.5% |
| Commodity: KCl | ||||||
| Spain | 29.3 | 25.2% | 67.0 | 26.2% | 96.3 | 25.9% |
| Cabanasses | 29.3 | 25.2% | 67.0 | 26.2% | 96.3 | 25.9% |
| Vilafruns | - | - | - | - | - | - |
| Israel | 138.5 | 20.0% | - | - | 138.5 | 20.0% |
| DSW | 138.5 | 20.0% | - | - | 138.5 | 20.0% |
| Total | 167.8 | 20.9% | 67.0 | 26.2% | 234.8 | 22.4% |
Commodity: P2O5 | ||||||
| Israel | 34.6 | 26.0% | - | - | 34.6 | 26.0% |
| Rotem Israel | 34.6 | 26.0% | - | - | 34.6 | 26.0% |
| China | 50.9 | 21.8% | - | - | 50.9 | 21.8% |
| YPH | 50.9 | 21.8% | - | - | 50.9 | 21.8% |
| Total | 85.5 | 23.5% | - | - | 85.5 | 23.5% |
| (1) | The totals contained in the above table have been rounded to reflect the relative uncertainty of the estimates, and numbers may not sum due to rounding. |
Internal Controls
Quality assurance at ICL Boulby, ICL Iberia, Rotem Israel, ICL Dead Sea and YPH, involves the use of standard practice procedures for sample collection and includes oversight by experienced technical staff during data collection, management, and interpretation. Certain quality control measures for sample analysis include in-stream sample submittal of standard reference material, blank material, and field duplicate sampling. For data verification, staff members observed drill hole locations and orientations, inspected drill cores, and compared to logs and analytical results, observed core intake, visited outcrops, and discussed with on-site geologists, including reviewing working maps and cross-sections. In addition, ongoing reconciliation is conducted between resource estimates and production data. Notwithstanding the above, inherent risks in quality control include potential mislabeling of samples and sample contamination, among others, but the Company maintains a close and diligent monitoring program of all quality control measures for the collection of both exploration and production data with results deemed suitable for use in the provincesubsequent estimation of BarcelonaMineral Resources and are located approximately 530 to 900 meters below ground. Each mine has two access points and the mining is by a modified room and pillar method. All of the mine sites are served by roads and are near major highways.Mineral Reserves.
ICL Iberia (IBP), see “Item 4 - Information on the Company— B. Business Overview— ICL Potash— Production”.Group Limited 145
| Year Ended December 31, | |||
| 2017 | 2016 | 2015 | |
| Sallent | |||
| Ore processed (in millions of metric tons) | 2 | 2 | 2 |
| Grade (% KCl) | 23% | 23% | 23% |
| Suria | |||
| Ore processed (in millions of metric tons) | 2 | 2 | 2 |
| Grade (% KCl) | 24% | 26% | 26% |
| Total | |||
| Ore processed (in millions of metric tons) | 4 | 4 | 4 |
ICL’s mining operations in the United KingdomUK are conducted by its wholly owned subsidiary, Cleveland Potash Limited (ICL Boulby). ICL UK. ICL’sBoulby is an underground polyhalite mine and processing plant are locatedon the coastline of northeast England, approximately 340 kilometers north of London and approximately 4034 kilometers eastto the southeast of Middlesbrough, England in the North York Moors National Park. The mine was originally designed, developed and operated by Imperial Chemical Industries and Charter Consolidated and the first potash was extracted in 1973. ICL purchased the mine, including mining leases and mineral extraction licenses, in 2002 from the then‑owner, Anglo American Corporation.town of Middlesbrough.
Figure 2: Location of the ICL Boulby Mine (United Kingdom)
ICL Group Limited 146
Mining Concessions and Mining Rights”.Lease Agreements
ICL Boulby owns the freehold of approximately 3.82 sqkm of the mines and mineral fields in and around the mine head. These freehold mineral fields are in the process of being registered at the Land Registry. The remainder of the onshore mineral fields is held on a leasehold basis, over approximately 33 mineral leases, and extending to approximately 20.43 sqkm. Rents and royalties are paid bi-annually (January and July), and the Retail Price Index (RPI) is applied every three years. The next RPI rate will be applied on January 1, 2027, in accordance with the agreements.
ICL Boulby, holds onshore and offshore mineral leases and licenses, allowing for the extraction of diverse minerals, in addition to numerous easements and rights of way from private landowners. The offshore mineral field is leased from The Crown Estate on a production royalty basis and includes provisions to explore and exploit all targeted and known polyhalite and salt mineral resources of interest to ICL Boulby.
ICL Boulby has actively engaged in negotiations with the private property owners and has successfully secured the recent renewals of most of the existing lease agreements, as well as purchased the minerals of one lease area on a freehold basis. The renewal of part of the remaining leases was referred to the High Court of Justice in London for a decision regarding the calculation mechanism. The Company estimates that the proceedings will be concluded by the end of 2024. Additional leases, which are still being negotiated, will continue to operate under the terms of the previous leases.
Historically, the renewal of leases has not been problematic. ICL Boulby is confident in the renewal of all land and mineral leases, as required, and expects to have or will obtain all government approvals and permits necessary for exploiting all targeted mineral resources. Two leases are in effect until December 31, 2024, and June 30, 2027. Renewal negotiations with the mineral owners will commence thereafter.
In 2022, the North York Moor National Planning Authorities (hereinafter - NYMNPA) granted planning permission for Polyhalite and Salt extraction until 2048. To comply, ICL Boulby was required to produce management plans for NYMNPA approval. As of the reporting date, all required plans are completed, except for one- pending dual approval from both Redcar and Cleveland Borough Council and NYMNPA.
Operations
ICL Boulby’s mining operations are situated close to the western limits of the polyhalite, potash and salt deposition in the Zechstein Basin extending inland in the United KingdomUK and below the North Sea into Germany. The potashpolyhalite seam is of the Permian Evaporite Series and is overlainover lain by some 800 meters to 1,300 meters of younger sedimentary rocks. The potashpolyhalite seam averages 7 meters in thickness but varies from zerocomprises two zones: a western zone (Zone 1), access to more than 20 meters in thickness. An approximately 11-meter-thick Polysulphate™ layer exists approximately 150 meters below the potash deposits. ICL UK evaluated the potential of this Polysulphate™ as a separate resource, and also completed an access decline into the Polysulphate™ bedwhich was established in 2010 from one of its main salt roadways. As described below, Polysulphate™ production at ICL has increased in recent years androadways, which is expected to be the current focus of mining activities atoperations, and an eastern zone (Zone 2). The polyhalite seam within the main mining areas of Zone 1 averages around 15 meters in thickness. Zone 2 is under technical review and planned operations in Zone 2 will, over time, augment and eventually supplant Zone 1.
The ICL UK as it transitions away from declining potash production due to depleted reserves.
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Mineral is cut by continuous miners and is loaded at the working face into shuttle cars. The shuttle cars transport the mineral to a feeder breaker for loading onto the mine's conveyor belt system. Mining equipment is electrically powered, whilst support/ancillary equipment is primarily diesel powered.
Polyhalite is hoisted to the Company's mining operations insurface and conveyed to the United Kingdom is powered primarily by electricity purchased from the local electricity company. There is also a power plant on the site that converts gas into electricitymineral processing facilities. Standard and supplements the electricity supply required for execution of the mining operations.
| Year Ended December 31, | |||
| 2017 | 2016 | 2015 | |
| Potash Ore (millions of metric tons) | 1 | 2 | 3 |
| Grade (% KCl) | 36% | 36% | 33% |
| Grade (% insoluble) | 11% | 11% | 13% |
The following table sets forth, the quantitiesCompany also sells salt, which is a by-product and is used for de-icing purposes. In 2023, a total of the polyhalite ore extracted from the mine in the United Kingdom, for the three years ended December 31, 2017, 2016 and 2015:
| Year Ended December 31, | |||
| 2017 | 2016 | 2015 | |
The Haikoumine uses water sourced from a combination of mains supplied fresh water (from local utilities) approved for industrial use from state authorities, mine brine which is pumped from various inflows to storage lagoons in the mine workings and sea water. The mine has been in operation since 1966 anda stable supply of electricity from the concession area is spread over 9.6 square kilometers. The Baitacun concession area is spread over 3.08 square kilometers, with no mining operations to date.national grid.
The following table sets forth the amount of our total mine production of raw orepolyhalite at the Company’s mine in the Haikou mine (and the relevant grade)ICL Boulby supplied to ourthe beneficiation plants, for the three years ended December 31, 2017, 20162023, 2022 and 2015:2021:
| 2023 | 2022 | 2021 | |
| Polyhalite hoisted (kt) | 1,028 | 947 | 784 |
| Total Polyhalite Production (kt) | 1,009 | 953 | 789 |
Property Value
As of December 31, 2023, the overall book value of the property, plant and equipment of ICL Boulby amounted to about $181 million.
| Year Ended December 31, | |||
| 2017 | 2016 | 2015* | |
| Millions of metric tons produced | 1.95 | 2.20 | 0.57 |
| Grade (% P2O5 before/after beneficiation) | 21.3/29.6 | 20.4/29.2 | 22.1/28.3 |
The Company believes there are sizable resources in ICL Boulby's mine for the purpose of continued production of Polysulphate® and PotashpluS®. The estimation utilizes assay results from underground exploration drill holes and face sampling with grade control drilling used to aid the geological modelling of the polyhalite seam. The data is considered appropriate for use in Mineral Resource estimation and is supported by robust quality assurance/quality control (QA/QC) procedures. The geological model was used to code and composite the drill hole data based on their stratigraphic position within the seam. For Zone 1, two regional domains were identified: a higher polyhalite grade western region and a lower polyhalite grade eastern region, with further sub domains established based on population analysis and grade distribution. The boundary between domains ensured that sample selection for grade estimation reflected the stratigraphic nature of the polyhalite. Mineral Resources are only reported for Zone 1.
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Mineral Resources were categorized primarily on the search volume used to generate the estimate with additional consideration of drill hole spacing, geological and grade continuity, data density and orientation. The Resources are defined through an ongoing program of long hole drilling to provide information for Q4 2015 only – commencingthe classification of Mineral Resources. No Measured Mineral Resources were classified due to a lack of closely spaced drillholes (needed to predict variation in salt content, polyhalite grade and seam position on a production panel basis). Indicated Mineral Resources were generally based on a minimum of 3 sample points within a radius of 200 meters. Remaining areas were classified as Inferred Mineral Resources and these included areas in which the seam position or grade were deemed difficult to predict.
Mineral Resources consist of a 6 meter thick horizon optimized for grade (% K) whilst ensuring mining operations are matched to achievable gradients for excavation. Mineral Resources and Mineral Reserves are reported using a cut-off grade of 10.0% K, or 12.0% K2O Equivalent, which reflects the current ability to blend, homogenize and upgrade material as part of mine sequencing and processing. K2O is an equivalent value calculated from the estimated K based on atomic mass and ratio of K in the compound K2O. The factor used is K2O = K x 1.2046. Polyhalite, Halite and Anhydrite are theoretical values calculated from the elemental analysis under the assumption that all elemental K is contained within Polyhalite.
In estimating the cut-off grade, resources and reserves, a three-year average Polysulphate® price of $174 per tonne FOB and an average of the previous three years’ currency exchange rate of £0.78 per dollar as of December 31, 2023, and operating costs are used for the assessment of economic potential.
ICL Boulby – Summary of Polyhalite Mineral Resources at the end of the fiscal year ended December 31, 2023.
| Resources | ||||
| Amount (Mt) | Grades / qualities (K2O) | Cut-off grades (K2O) | Metallurgical recovery (K2O) | |
| Measured mineral resources | - | - | 12.0% Equivalent | 100% |
| Indicated mineral resources | 38.9 | 13.3% | ||
| Measured + Indicated mineral resources | 38.9 | 13.3% | ||
| Inferred mineral resources | 9.3 | 13.3% | ||
| (1) | Mineral Resources are reported exclusive of any Mineral Reserves. |
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources are reported in accordance with the guidelines of the JORC (2012) Code for Mineral Resources and Ore Reserves. |
| (4) | There is no metallurgical plant at Boulby. All material mined, after crushing and screening, is available for sale. |
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As of December 31, 2023, ICL Boulby had 48.2 Mt of Mineral Resources compared to 30.3 Mt as of December 31, 2022, an increase of 59% mainly due to exploration drilling in 2023 and partially offset by conversion of resources to reserves. This increase in Mineral Resources demonstrates the future potential of Zone 1 but is not material to the Company’s current business plan. The Mineral Resources Estimate for ICL Boulby is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.2 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
Mineral Reserve Estimate
The Probable Mineral Reserves are declared only for the Boulby Zone 1 area. The Mineral Reserve estimate has been derived from Indicated Mineral Resources included within the life of mine plan which have converted to Probable Mineral Reserves by applying Modifying Factors.
ICL Boulby – Summary of Polyhalite Mineral Reserves at the end of the fiscal year ended December 31, 2023.
| Amount (Mt) | Grades/ qualities (K2O) | Cut-off grades (K2O) | Metallurgical recovery (K2O) | |
| Proven mineral reserves | - | - | 12.0% Equivalent | 100% |
| Probable mineral reserves | 7.6 | 13.5% | ||
| Total mineral reserves | 7.6 | 13.5% |
| (1) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (2) | The Mineral Reserve estimate for the ICL Boulby deposit is classified in accordance with the JORC (2012) Code for Mineral Resources and Ore Reserves. |
| (3) | There is no metallurgical plant at ICL Boulby. All material mined, after crushing and screening, is available for sale. |
As of December 31, 2023, ICL Boulby had 7.6 Mt of polyhalite Mineral Reserves which is unchanged since December 31, 2022, due to our continuing mining operations and offset by conversion of resources to reserves from exploration drilling in 2023.
The life of the mine at ICL Boulby is approximately 8 years, based on reserves of approximately 7.6 million tonnes (given the annual average mining rate of around 0.95 million tonnes of polyhalite). Further work based on the current Mineral Resource of 48.2 Mt is expected to extend the life of mine.
The Mineral Reserves Estimate for ICL Boulby may be impacted by additional exploration that could alter the geological database and model of mineralization. Material assumptions regarding the technical parameter analysis, forecasted product prices, production costs, permitting decisions, or other factors may positively or negatively affect the reserves estimates. For further discussion of the material assumptions relied upon, please refer to Section 12.2 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
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Logistics
The ICL Boulby mine in the UK is connected to the national road network and has easy access to train transportation routes. Pursuant to agreements with the North Yorkshire National Parks Authority, the total transport movements by means of the network of roads to and from site to site are limited to a maximum of 150 thousand tonnes per year and a maximum of 66 trucks per day (no road movements are allowed on Sundays or public holidays). This limitation does not interfere with the future production of ICL Boulby considering its commitment to maintain the rail link to Teesdock. ICL Boulby's roads and trains are in full compliance with all the requirements.
The rail load-out products are transported on an ICL Boulby owned rail line which extends approximately eight kilometers from the mine entrance to a junction with the national rail network, and from there the products continue to Teesport, Middlesbrough, via the Network Rail Company, the owner and operator of the main rail line.
Eight trains per day transport Polysulphate®, PotashpluS and rock salt to Teesdock. Most of the Polysulphate® output is used as a component of agricultural fertilizers, where volumes are exported by sea from the Teesdock seaport to customers overseas and in the UK.
Rock salt is taken by train to Teesdock and transported by ship or trucks to local UK authorities for de-icing roads.
ICL Boulby leases and operates three principal storage and loading facilities: the Teesdock facility, which is a terminal located at Teesport, and two additional storage facilities that are connected to the main rail line – Cobra and Ayrton Works in Middlesbrough.
United Kingdom Concession - Everris
A UK subsidiary within the Growing Solutions segment (hereinafter – Everris Limited) operates peat mines in the UK (Creca, Nutberry and Douglas Water). Peat is used as a component in the production of professional growing media. All sites are owned by Everris Limited. The extraction permits for Creca were granted until the end of 2051. Mining activity in Nutberry and Douglas Water will cease at the end of 2024, following expiration of their permits.
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ICL Iberia
Overview
The Company's potash mining operations in Spain are carried out by ICL Iberia (a wholly owned subsidiary of the Company) and the marine transportation performed by Trafico de Mercancias (a wholly owned subsidiary of ICL Iberia). ICL Iberia holds mining rights for two underground potash mines, Cabanasses and Vilafruns, located in Catalonia in northeast Spain. As part of the Company's strategic decision to concentrate its production at the Súria site (Cabanasses mine), in June 2020, ICL Iberia consolidated its sites and potash production at the Sallent site (Vilafruns mine) was discontinued. The Vilafruns mine has been maintained on a care and maintenance basis since June 2020. As a result, the Company operates only at the Cabanasses mine, which is located in the town of Súria, approximately 12 kilometers north of the district capital of Manresa in the Cardener river valley. The Cabanasses mine is approximately centered on the geographic coordinates: latitude 41°50’27”N and longitude 01°45’07”E. The Vilafruns mine is approximately centered on the geographic coordinates: latitude 41°50’25”N and longitude 01°52’39”E.
The mines are located within the Catalan Potash Basin, a sub basin in the northeast of the Ebro Basin which extends along the southern flank of the Pyrenees through eastern Spain. Sylvinite, consisting of a mixture of potash (sylvite or KCl) and salt of late Eocene age occurs in two seams (Seams A and B) which are vertically separated by 3 to 6 meters and found at depths of approximately 730 to 1000 meters below the surface. At Cabanasses, mining of sylvinite is conducted according to a modified room and pillar method before being transported by conveyor to the surface. Potash is then separated from salt at a production plant located near the mine. The mine site is served by roads/railways and is near major highways. Potash in Súria was first discovered in 1912 and its commercial development began in 1920. ICL purchased the mines in 1998.
Figure 3: Location of Cabanasses and Vilafruns Mines (Spain)
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Mining Concessions and Lease Agreements
ICL Iberia conducts its mining activities in Spain pursuant to concessions granted to it by the Spanish government. ICL Iberia was granted mining rights based on legislation of Spain’s government from 1973 and regulations accompanying this legislation. Further to this legislation, the government of the Catalonia region published special mining regulations whereby ICL Iberia received individual licenses for each of 126 different sites that are relevant to current and possible future mining activities. Some of the licenses are valid until 2037 and the remainder are effective until 2067. The concession for the "Reserva Catalana", an additional site where mining did not commence, expired in 2012. The Company is acting in cooperation with the Spanish Government to obtain a renewal of the concession. According to the Spanish authorities, the concession period is valid until a final decision is made regarding the renewal.
A total of 126 licenses for the extraction of rock salt and potash, awarded to ICL Iberia, cover the Cabansses and Vilafruns operations covering an area of 42,489 hectares (425sqkm) in the province of Barcelona, and 26,809 hectares (268sqkm) in the province of Lerida. As required by law, the concessions are to be renewed prior to their expiration date. As part of a renewal process, the Company is required to prepare and present a basic technical report describing the intended use of the mines. If a concession expires, a bidding process will be initiated. ICL Iberia applies in advance for the renewal of mining concessions and, to date, has experienced no difficulties in renewing them.
ICL acquiredowns the Haikouland on which the Spanish surface facilities are located. The Spanish government owns all the underground mining rights and it has granted ICL concessions to conduct mining operations under the land. For further information, see Note 18 to the Audited Financial Statements.
Operations
The Cabanasses mine is accessed by two shafts and a decline. The potash seams are extracted underground using continuous miner machines and transported by a series of conveyors to the Súria processing plant, located at the surface, where it is processed to separate the potash and salt.
The shafts are used for worker access and ventilation while mined material transport is via the decline. The mining method used to extract the seams is a modified room and pillar method. The potash seams and salt horizons do not require drilling or blasting and are mined using electric powered continuous miner machines, equipped with a moveable boom-mounted rotary cutting head. The cuttings are collected and fed into a conveyor that discharges the mined material to the rear of the machine, where it is loaded into 25 tonne diesel-powered haul trucks. The trucks haul the material to ore passes where it is vertically transferred to the development level below and an internal conveyor system transports it to the decline. The five-kilometer decline was completed in April 2021 and is installed with a conveyor that transports the mined material to the Súria processing plant. In addition to transporting sylvinite ore, the conveyor is also used to batch transport some salt mined during development of the underground access tunnels in the development level.
The completion of the decline and installation of the conveyor system has increased the haulage capacity of the mined material to 1,000 tonnes per hour (compared with previous shaft haulage capacity of 400 tonnes per hour). In addition, the decline and the installation of a new main ventilation fan in 2023 improved ventilation within the mine and air now intakes down both shafts, circulates the working areas and exhausts back out of the decline. This increased ventilation has allowed additional continuous miners, haulage trucks and ancillary equipment to operate within the mine for longer periods of time.
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The mineral processing includes crushing, grinding, desliming, froth flotation, drying and compacting. There are separate warehouses for the final standard and granular potash products. In addition, there is a vacuum salt plant that produces industrial salt (UVS), specialty salt (SP Salt) and pure potash, and a rock salt facility that produces salt for de-icing purposes. In 2023, a total of 601 thousand tonnes of potash product were produced (including 17 thousand tonnes of pure potash). In addition, 448 thousand tonnes of industrial salt, 94 thousand tonnes of specialty salt and 631 thousand tonnes of rock salt were also produced. The power utilized by the Spanish mining operations is purchased from third party electric companies and is generally produced from green energy sources.
As of the date of this report, following the substantial completion of several expansion projects, the annual production capacity of the Súria processing plant is around 1.1 million tonnes of potash product. Mining operations at the Cabanasses mine continue to ramp-up to meet the processing plant capacity.
In June 2020, the activity at the Sallent site (Vilafruns mine) was discontinued, which led to a write off in the amount of $12 million attributed to fixed assets. Due to Vilafruns being placed on a care and maintenance basis with the expectation to vacate the Sallent site, the resources at this mine have remained static over the past four years. Vilafruns is not considered material to the Company’s business or financial condition.
Production
The following table sets forth the approximate amountsamount of product produced after processing by our operationsthe total mine production of potash at the Súria plant in Haikou mine,ICL Iberia, for the three years ended December 31, 2017, 20162023, 2022 and 2015:2021:
| Potash Production at Súria Plant, ICL Iberia | |||
| 2023 | 2022 | 2021 | |
| Ore hoisted from Cabanasses mine | 2,795 | 2,928 | 2,534 |
| Head Grade % KCl | 24.3% | 25.3% | 26.4% |
| KCl Produced (kt) | 601 | 680 | 614 |
| Product Grade % KCl | 95.5% | 95.3% | 95.5% |
In the beginning of March 2023, a fatal accident occurred at the Cabanasses mine. A gradual ramp-up in production then followed due to the implementation of extraordinary safety measures, which led to production losses.
| Year Ended December 31, | |||
| 2017 | 2016 | 2015* | |
thousands of metric tons | thousands of metric tons | thousands of metric tons | |
| Phosphate Rock | 1,545 | 1,798 | 569 |
| Green Phosphoric Acid | 572 | 617 | 159 |
| Fertilizers | 335 | 790 | 149 |
| White Phosphoric Acid (TG) | 61 | 37 | - |
As of December 31, 2023, the overall book value of the property, plant and equipment of Sallent site amounted to about $3.8 million, Villafruns mine has been fully impaired.
Mineral Resource Estimate
Mineral Resource estimation involves the creation of a computerized geological block model using both the drilling data from the dateunderground drilling campaigns and from the exploratory surface drilling. At Cabanasses, underground drilling is carried out on a regular basis, amounting to around 41,686 meters drilled in 2023. Surface drilling has been conducted at different times over the last decades. The KCI grade is interpolated into the block model using inverse distance method (ID2). Zones that are potentially mineable are defined, considered the thickness, the grade, and the structure of the sylvinite seams. Mineral Resource classification was set using wireframe perimeters within the extents of the modelled mineralization. The Mineral Resource classification methodology considers the confidence in the drillhole data, the geological interpretation, geological continuity, data spacing and orientation, spatial grade continuity and confidence in the Mineral Resource estimation process. Areas identified as being below a cut-off grade of 10% KCl and areas of low seam thicknesses are also considered by ICL acquired the Haikou mine.Iberia as non-recoverable.
In 2015,estimating the Ministercut-off grade, resources and reserves, a medium-long term forecast market price of Finance appointed$352 FOB per tonne as of December 31, 2023, and medium-long term operating costs were used. In addition, a team to determineforecast currency exchange rate of €0.91 per dollar as of December 31, 2023, was used in the “governmental activities to be conducted towards the endassessment of the concession period”. The public’s comments in this matter were submitted to the team. The team was requested to submit its recommendations to the Minister of Finance by May 2016, however up to the date of the report the Company has not been notified of any recommendations submitted by the team. There is no certainty as to what the recommendations of this team will be regarding the procedures that the government might undertake in connection with the existing concession and as to the manner in which future mining rights would be granted.economic potential.
| Resources | Cut-off grades (KCI) | Metallurgical recovery (KCI) | ||
| Amount (Mt) | Grades/ qualities (KCI) | |||
| Measured mineral resources | 77.4 | 25.0% | 10% | 86.5% |
| Indicated mineral resources | 54.2 | 23.8% | ||
| Measured + Indicated mineral resources | 131.6 | 24.5% | ||
| Inferred mineral resources | 247.2 | 27.2% | ||
| (1) | Mineral Resources are reported exclusive of any Mineral Reserves. |
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources for Cabanasses have been estimated in accordance with the guidelines of the JORC Code (2012). |
As of December 31, 2023, Cabanasses had 378.8 Mt of potash Mineral Resources compared to 386.3 Mt as of December 31, 2022, a decrease of 1.9% that mainly resulted from a transfer of prior Inferred Resources to Indicated Resources and those to Probable Reserves due to a 2023 drilling campaign.
The determination dateMineral Resources estimate for Cabanasses is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the actual calculation is only in 2030. The abovementioned team was requestedmaterial assumptions relied upon, please refer to submit its recommendations in this matterSection 11.3 of the Technical Report Summary filed as an exhibit to the Minister of Finance by March 2015. In January 2017, the Accountant General sent a letter to the Chief Economist – the Supervisor of the State’s revenues wherein she noted that the position of the Division of the Accountant General in the Ministry of Finance regarding the arrangement covering the assets was finalized (but was not published), however in light of the Accountant General changeover, the draft position report is being transferred to the incoming Accountant General for completion of the work. At this stage, there is no certainty regarding the recommendations of the Accountant General. In addition, there is no certainty as to how the Government would interpret the Concession Law, the manner in which this process and methodology would ultimately be implemented, and how the value of the tangible assets would be calculated.2021 Annual Report.
| Resources | Cut-off grades (KCI) | Metallurgical recovery (KCI) | ||
| Amount (Mt) | Grades / qualities (KCI) | |||
| Measured mineral resources | 12.6 | 31.0% | 10% | 86.5% |
| Indicated mineral resources | 9.4 | 32.1% | ||
| Measured + Indicated mineral resources | 22.0 | 31.5% | ||
| Inferred mineral resources | 30.7 | 28.9% | ||
| (1) | Mineral Resources are reported exclusive of any Ore Reserves. |
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources for Vilafruns have been estimated in accordance with the guidelines of the JORC Code (2012). |
As of December 31, 2023, Vilafruns had 52.7 Mt of potash Mineral Resources which was unchanged from the 52.7 Mt as of December 31, 2022, due to the Sallent site being put into care and maintenance in 2020. The Mineral Resources estimate for Vilafruns is based on factors related to geological and grade models and the matter is presently inprospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.3 of the Technical Report Summary filed as an arbitration proceeding, as described below.exhibit to the 2021 Annual Report.
Mineral Reserve estimation used the geological block model and application of Modifying Factors based on historic data for “Dilution”, “mining recovery” and “cut-off grade” of 19% KCl etc. This data is provided to the Mine Planning Dept. to spatially define the mine planning of access tunnels to all mineable blocks and then mining fleet activity scheduling to plan the life-of-mine.
The parameters used in determining the cut-off grade take into consideration geology (continuity, structure), mining method, mining recovery, mining dilution, plant recovery, technical feasibility, operating costs, and historical, as well as forecast product prices. The cut-off grade calculations are made by economists in ICL Iberia’s finance department. The calculation considers long-run forecast of selling prices, costs and expected ore production under the Long-Range-Plan. A conservative approach in selling prices was chosen.
The Proven and Probable Reserves take into consideration the cut-off grade criteria detailed above. The mining recovery and dilution factors, which are required in the conversion of resources to reserves take into consideration the mining method and the geological conditions in the mine and consist of historical yield data based on 20 years of operations at the mines. The mining recovery ranges from approximately 25% to 60% by ICL Iberia’s “room and pillar” modified layout. The reserve quantity (in tonnes) and grade are quoted as those that are expected to be delivered to the processing plant and are subject to metallurgical recovery factors. Metallurgical recovery factors consist of historical yield data and are based on operational experience. A processing plant recovery of 86.5% is used and is unchanged from 2022.The final product is 95.5% KCl to avoid quality losses.
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Cabanasses – Summary of Potash Reserves at the end of the fiscal year ended December 31, 2023.
| Amount (Mt) | Grades/ qualities (KCl) | Cut-off grades (KCl) | Metallurgical recovery (KCl) | |
| Proven mineral reserves | 29.3 | 25.2% | 19% | 86.5% |
| Probable mineral reserves | 67.0 | 26.2% | ||
| Total mineral reserves | 96.3 | 25.9% |
| (1) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (2) | Mineral Reserves for Cabanasses are classified in accordance with the guidelines of the JORC Code (2012). |
As of December 31, 2023, Cabanasses had 96.3 Mt of potash Mineral Reserves compared to 96.7 Mt as of December 31, 2022, a letter was receivednet decrease of 0.4% mainly due to our continuing mining operations offset by conversion of resources to reserves resulting from exploratory drilling in 2023.
The life of the mine at Cabanasses is approximately 22 years, based on reserves of approximately 96.3 million tonnes (given the annual average mining rate of around 4.3 million tonnes, which excludes salt mining for construction of underground infrastructure).
There are no Mineral Reserves for Vilafruns as of December 31, 2023, which is unchanged as of December 31, 2022, due to the discontinuation of activity at the Sallent site and the Vilafruns mine being put into care and maintenance.
Logistics
ICL Iberia transports by conveyor belt the excavated ore from the former Accountant General of the Israeli Ministry of Finance, claiming an underpayment of royalties amounting to hundreds of millions of shekels. PursuantCabanasses mine to the concession, disputes betweenSúria processing plant. The final products, potash and salt, are transported from the parties, including royalties, areplant to be decidedits customers by an arbitration panel of three arbitrators, comprising of two arbitrators appointed by each party, who in turn jointly appoint a third arbitrator.trucks to the local market, and via railway to Barcelona port to the overseas markets.
port. In addition, ICL Dead Sea paysIberia owns and maintains approximately 1.5 kilometers of standard gauge railway at the Israel Lands Authority lease rentalsSúria site that connects to the regional rail network. In 2023, up to three trains left daily with a total payload capacity of 800 tonnes, spread out over about 21 freight cars. The rail route for product transport from Súria to the terminal in respectthe port of Barcelona is about 80 kilometers. The train traction engine and part of the leases as defined inbulk freight car rolling stock is operated by the concession certificate. The amount of the paymentowner and the related update mechanism is provided in the agreement signed with the Israel Lands Authority (formerly the Israel Lands Administration) in 1975.
ICL Iberia owns and operates its own facilities at the port of Barcelona through its subsidiary, Tráfico de Mercancias, S.A. (Tramer). The facilities include bulk potash and salt storage warehouses, including freight car and rail truck conveyor unloading facilities, within an area of 80,492 square meters divided into three zones.
As part of the plan to increase ICL Iberia’s production capacity, upgrades have now been substantially completed to logistics infrastructure at the Súria site (including the rail load out facilities) and the Company’s berth at the Barcelona port, in such a manner that will allow transport and export of about 2.3 million tonnes of potash and salt products per year.
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Rotem Amfert Israel (ICL Rotem)
Overview
Rotem Amfert Negev Limited (“ICL Rotem/Rotem Israel”), a limited liability company and wholly owned subsidiary of ICL, retains three sites of phosphate open-pit mines (Rotem, Oron, and Zin) in the Negev desert region of southern Israel, each with its own beneficiation plant. Since 2021, ICL Rotem has operated only two of its phosphate open-pit mines (Rotem and Oron), due to the discontinuation of its mining activities at Zin in 2020. The Rotem operation is located approximately 17 kilometers to the south of the town of Arad and east of the town of Dimona, at approximately latitude 31°04’00”N and longitude 35°11’50”E. The Oron and Zin operations lie to the southeast of the town of Yeruham. Oron is approximately centered on the geographic coordinates of latitude 30°54’00”N and longitude 35°00’59”E. The Zin operation is approximately centered on the geographic coordinates: latitude 30°50’35”N and longitude 35°05’22”E. These sites are accessible by road and rail.
Figure 4: Location of the Rotem, Oron, Zin, and DSW Properties (Israel)
Israel has a well-established and high-quality road network making travel and access within the country, and to the ICL properties, straightforward and efficient. Rotem is 150 kilometers by road from Ashdod, a Mediterranean port, via Route 258 and Highways 25 and 40. The Zin mine is located at the end of the current rail network in the Negev desert. It is linked via an internal private haul road to the Oron mine which is 10 kilometers from Zin. All three sites of ICL Rotem are connected by rail to the port of Ashdod on the Mediterranean and by road to the port of Eilat on the Red Sea. Exports are mainly handled via Ashdod, where ICL has its own dedicated facilities, though exports to Asia Pacific are usually handled via Eilat.
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Mining Concessions and Lease Agreements
Rotem Israel has been mining phosphates in the Negev in Israel for more than sixty years. The miningMining is conducted in accordance with the phosphate mining concessions, which are granted from time to timeas required by the MinisterMinistry of National Infrastructures, Energy and Water under the Mines Ordinance, by the Supervisor of Mines, in his Office,as well as the mining authorizations issued by the Israel Lands Authority.
Historically, two separate mining concessions were held by ICL Rotem has the following two mining concessions, which cover a total area of approximately 224 square kilometers:
United Kingdom Concession - Everris
A UK subsidiary within the Growing Solutions segment (hereinafter – Everris Limited) operates peat mines in the UK (Creca, Nutberry and Douglas Water). Peat is used as a component in the production of professional growing media. All sites are owned by Everris Limited. The extraction permits for Creca were granted until the end of 2051. Mining Royaltiesactivity in Nutberry and Douglas Water will cease at the end of 2024, following expiration of their permits.
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ICL Iberia
Overview
The Company's potash mining operations in Spain are carried out by ICL Iberia (a wholly owned subsidiary of the Company) and the marine transportation performed by Trafico de Mercancias (a wholly owned subsidiary of ICL Iberia). ICL Iberia holds mining rights for two underground potash mines, Cabanasses and Vilafruns, located in Catalonia in northeast Spain. As part of the terms ofCompany's strategic decision to concentrate its production at the concessionsSúria site (Cabanasses mine), in respect of mining ofJune 2020, ICL Iberia consolidated its sites and potash production at the phosphate, Rotem is required to pay the State of Israel royalties basedSallent site (Vilafruns mine) was discontinued. The Vilafruns mine has been maintained on a calculation as stipulated incare and maintenance basis since June 2020. As a result, the Israeli Mines Ordinance. In January 2016, a legislative amendment entered into effect covering implementation of the recommendations of the Sheshinski Committee that changed the formula for the calculation of the royalties, by increasing the rates from 2% to 5% of the value of the quarried material and left the Supervisor the possibility of collecting royalties at a higher rate if he decided to grant a mining right in a competitive process wherein one of the selection indices is the royalty rate.
The Spanish government owns allmines are located within the Catalan Potash Basin, a sub basin in the northeast of the undergroundEbro Basin which extends along the southern flank of the Pyrenees through eastern Spain. Sylvinite, consisting of a mixture of potash (sylvite or KCl) and salt of late Eocene age occurs in two seams (Seams A and B) which are vertically separated by 3 to 6 meters and found at depths of approximately 730 to 1000 meters below the surface. At Cabanasses, mining rightsof sylvinite is conducted according to a modified room and has grantedpillar method before being transported by conveyor to the Company concessions to conductsurface. Potash is then separated from salt at a production plant located near the mine. The mine site is served by roads/railways and is near major highways. Potash in Súria was first discovered in 1912 and its commercial development began in 1920. ICL purchased the mines in 1998.
Figure 3: Location of Cabanasses and Vilafruns Mines (Spain)
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Mining Concessions and Lease Agreements
ICL Iberia conducts its mining operations under its landactivities in Spain pursuant to mining legislation enacted in 1973 and related regulations. The mining permits (or concessions) in Spain are administrated by the regional governments (in Catalonia, the Generalitat), except those specially reserved areas that are still administeredconcessions granted to it by the Spanish central government. There are several such areas in Spain, including Reserva Catalana. ICL Iberia (IBP) owns 126was granted mining concessions. Two separaterights based on legislation of Spain’s government from 1973 and independent processes for paying fees and renewals are thus involved.
A total of 126 licenses for the concession period.
extraction of rock salt and potash, awarded to ICL Iberia, (IBP) applies well in advance for concessions forcover the mining areas. As at the dateCabansses and Vilafruns operations covering an area of this Annual Report, ICL Iberia (IBP) has not had any serious difficulties in renewing those leases42,489 hectares (425sqkm) in the past. The earliest renewal required for anyprovince of Barcelona, and 26,809 hectares (268sqkm) in the 126 existing relevant concessions will be in 2037, and mostprovince of the concessions are effective up to 2067. The length of the planned life of the Cabanasas mine, given the first stage and the second stage of the expansion plan, is 23 years.Lerida. As is required by law, the concessions mustare to be renewed prior to thetheir expiration date. As part of a renewal process, the Company is required to prepare and present a basic technical report describing the intended use of the mines. If a concession were to expire for some reason,expires, a bidding process would start.will be initiated. ICL Iberia applies in advance for the renewal of mining concessions and, to date, has experienced no difficulties in renewing them.
The Cabanasses mine is accessed by two shafts and a decline. The potash seams are extracted underground using continuous miner machines and transported by a series of conveyors to the Súria processing plant, located at the surface, where it is processed to separate the potash and salt.
The shafts are used for worker access and ventilation while mined material transport is via the decline. The mining rightsmethod used to extract the seams is a modified room and pillar method. The potash seams and salt horizons do not require drilling or blasting and are mined using electric powered continuous miner machines, equipped with a moveable boom-mounted rotary cutting head. The cuttings are collected and fed into a conveyor that discharges the mined material to the rear of the machine, where it is loaded into 25 tonne diesel-powered haul trucks. The trucks haul the material to ore passes where it is vertically transferred to the development level below and an internal conveyor system transports it to the decline. The five-kilometer decline was completed in April 2021 and is installed with a conveyor that transports the mined material to the Súria processing plant. In addition to transporting sylvinite ore, the conveyor is also used to batch transport some salt mined during development of the underground access tunnels in the development level.
The completion of the decline and installation of the conveyor system has increased the haulage capacity of the mined material to 1,000 tonnes per hour (compared with previous shaft haulage capacity of 400 tonnes per hour). In addition, the decline and the installation of a subsidiarynew main ventilation fan in 2023 improved ventilation within the United Kingdom (hereinafter – mine and air now intakes down both shafts, circulates the working areas and exhausts back out of the decline. This increased ventilation has allowed additional continuous miners, haulage trucks and ancillary equipment to operate within the mine for longer periods of time.
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The mineral processing includes crushing, grinding, desliming, froth flotation, drying and compacting. There are separate warehouses for the final standard and granular potash products. In addition, there is a vacuum salt plant that produces industrial salt (UVS), are based on approximately 114 mining leasesspecialty salt (SP Salt) and licensespure potash, and a rock salt facility that produces salt for extracting various minerals, inde-icing purposes. In 2023, a total of 601 thousand tonnes of potash product were produced (including 17 thousand tonnes of pure potash). In addition, to numerous easements448 thousand tonnes of industrial salt, 94 thousand tonnes of specialty salt and rights631 thousand tonnes of way from private owners of land under which ICL UK operates, and mining rights in the North Sea grantedrock salt were also produced. The power utilized by the British Crown (Crown Estates). The saidSpanish mining rights cover a total areaoperations is purchased from third party electric companies and is generally produced from green energy sources.
As of about 374 square kilometers. As at the date of this report, allfollowing the lease periods, licenses, easements and rightssubstantial completion of way are effective – someseveral expansion projects, the annual production capacity of the said periods willSúria processing plant is around 1.1 million tonnes of potash product. Mining operations at the Cabanasses mine continue to ramp-up to meet the processing plant capacity.
In June 2020, the activity at the Sallent site (Vilafruns mine) was discontinued, which led to a write off in the amount of $12 million attributed to fixed assets. Due to Vilafruns being placed on a care and maintenance basis with the expectation to vacate the Sallent site, the resources at this mine have remained static over the past four years. Vilafruns is not considered material to the Company’s business or financial condition.
Production
The following table sets forth the amount of the total mine production of potash at the Súria plant in ICL Iberia, for the three years ended December 31, 2023, 2022 and 2021:
| Potash Production at Súria Plant, ICL Iberia | |||
| 2023 | 2022 | 2021 | |
| Ore hoisted from Cabanasses mine | 2,795 | 2,928 | 2,534 |
| Head Grade % KCl | 24.3% | 25.3% | 26.4% |
| KCl Produced (kt) | 601 | 680 | 614 |
| Product Grade % KCl | 95.5% | 95.3% | 95.5% |
In the beginning of March 2023, a fatal accident occurred at the Cabanasses mine. A gradual ramp-up in production then followed due to the implementation of extraordinary safety measures, which led to production losses.
Property Values
As of December 31, 2023, the overall book value of the property, plant and equipment of the Cabanasses mine amounted to about $613 million.
As of December 31, 2023, the overall book value of the property, plant and equipment of Sallent site amounted to about $3.8 million, Villafruns mine has been fully impaired.
Mineral Resource Estimate
Mineral Resource estimation involves the creation of a computerized geological block model using both the drilling data from the underground drilling campaigns and from the exploratory surface drilling. At Cabanasses, underground drilling is carried out on a regular basis, amounting to around 41,686 meters drilled in 2023. Surface drilling has been conducted at different times over the last decades. The KCI grade is interpolated into the block model using inverse distance method (ID2). Zones that are potentially mineable are defined, considered the thickness, the grade, and the structure of the sylvinite seams. Mineral Resource classification was set using wireframe perimeters within the extents of the modelled mineralization. The Mineral Resource classification methodology considers the confidence in the drillhole data, the geological interpretation, geological continuity, data spacing and orientation, spatial grade continuity and confidence in the Mineral Resource estimation process. Areas identified as being below a cut-off grade of 10% KCl and areas of low seam thicknesses are also considered by ICL Iberia as non-recoverable.
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Measured Mineral Resources are classified based on a drill spacing of 80m – 100m. Indicated Mineral Resources are classified based on a drill spacing of up to 2020 whereas1,700m and within areas covered by seismic survey. Inferred Mineral Resources include the remaining area of the licenses and covered by seismic survey with some will continue up to 2038.limited surface drilling.
Cabanasses – Summary of reserves areaPotash Resources at our mine in the United Kingdom was extended to the end of 2020 (one large leasethe fiscal year ended December 31, 2023.
| Resources | Cut-off grades (KCI) | Metallurgical recovery (KCI) | ||
| Amount (Mt) | Grades/ qualities (KCI) | |||
| Measured mineral resources | 77.4 | 25.0% | 10% | 86.5% |
| Indicated mineral resources | 54.2 | 23.8% | ||
| Measured + Indicated mineral resources | 131.6 | 24.5% | ||
| Inferred mineral resources | 247.2 | 27.2% | ||
| (1) | Mineral Resources are reported exclusive of any Mineral Reserves. |
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources for Cabanasses have been estimated in accordance with the guidelines of the JORC Code (2012). |
As of December 31, 2023, Cabanasses had 378.8 Mt of potash Mineral Resources compared to 386.3 Mt as of December 31, 2022, a decrease of 1.9% that mainly resulted from a transfer of prior Inferred Resources to Indicated Resources and those to Probable Reserves due to a 2023 drilling campaign.
The Mineral Resources estimate for Cabanasses is involved). Historically,based on factors related to geological and grade models and the renewalprospects of leases has not been problematiceventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.3 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
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Vilafruns – Summary of Potash Resources at the end of the fiscal year ended December 31, 2023.
| Resources | Cut-off grades (KCI) | Metallurgical recovery (KCI) | ||
| Amount (Mt) | Grades / qualities (KCI) | |||
| Measured mineral resources | 12.6 | 31.0% | 10% | 86.5% |
| Indicated mineral resources | 9.4 | 32.1% | ||
| Measured + Indicated mineral resources | 22.0 | 31.5% | ||
| Inferred mineral resources | 30.7 | 28.9% | ||
| (1) | Mineral Resources are reported exclusive of any Ore Reserves. |
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources for Vilafruns have been estimated in accordance with the guidelines of the JORC Code (2012). |
As of December 31, 2023, Vilafruns had 52.7 Mt of potash Mineral Resources which was unchanged from the 52.7 Mt as of December 31, 2022, due to the Sallent site being put into care and we believe that we have or will receivemaintenance in 2020. The Mineral Resources estimate for Vilafruns is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.3 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
Mineral Reserve Estimate
Mineral Reserve estimation used the geological block model and application of Modifying Factors based on historic data for “Dilution”, “mining recovery” and “cut-off grade” of 19% KCl etc. This data is provided to the Mine Planning Dept. to spatially define the mine planning of access tunnels to all government approvalsmineable blocks and permits necessary for our reservesthen mining fleet activity scheduling to plan the life-of-mine.
The parameters used in determining the cut-off grade take into consideration geology (continuity, structure), mining method, mining recovery, mining dilution, plant recovery, technical feasibility, operating costs, and historical, as well as forecast product prices. The cut-off grade calculations are made by economists in ICL Iberia’s finance department. The calculation considers long-run forecast of selling prices, costs and expected ore production under the Long-Range-Plan. A conservative approach in selling prices was chosen.
The Proven and Probable Reserves take into consideration the cut-off grade criteria detailed above. The mining recovery and dilution factors, which are required in the United Kingdom.conversion of resources to reserves take into consideration the mining method and the geological conditions in the mine and consist of historical yield data based on 20 years of operations at the mines. The mining recovery ranges from approximately 25% to 60% by ICL Iberia’s “room and pillar” modified layout. The reserve quantity (in tonnes) and grade are quoted as those that are expected to be delivered to the processing plant and are subject to metallurgical recovery factors. Metallurgical recovery factors consist of historical yield data and are based on operational experience. A processing plant recovery of 86.5% is used and is unchanged from 2022.The final product is 95.5% KCl to avoid quality losses.
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Cabanasses – Summary of Potash Reserves at the end of the fiscal year ended December 31, 2023.
| Amount (Mt) | Grades/ qualities (KCl) | Cut-off grades (KCl) | Metallurgical recovery (KCl) | |
| Proven mineral reserves | 29.3 | 25.2% | 19% | 86.5% |
| Probable mineral reserves | 67.0 | 26.2% | ||
| Total mineral reserves | 96.3 | 25.9% |
| (1) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (2) | Mineral Reserves for Cabanasses are classified in accordance with the guidelines of the JORC Code (2012). |
As of December 31, 2023, Cabanasses had 96.3 Mt of potash Mineral Reserves compared to 96.7 Mt as of December 31, 2022, a net decrease of 0.4% mainly due to our continuing mining operations offset by conversion of resources to reserves resulting from exploratory drilling in 2023.
The life of the mine at Cabanasses is approximately 22 years, based on reserves of approximately 96.3 million tonnes (given the annual average mining rate of around 4.3 million tonnes, which excludes salt mining for construction of underground infrastructure).
There are no Mineral Reserves for Vilafruns as of December 31, 2023, which is unchanged as of December 31, 2022, due to the discontinuation of activity at the Sallent site and the Vilafruns mine being put into care and maintenance.
Logistics
ICL Iberia transports by conveyor belt the excavated ore from the Cabanasses mine to the Súria processing plant. The final products, potash and salt, are transported from the plant to its customers by trucks to the local market, and via railway to Barcelona port to the overseas markets.
A designated railway line is used to transport potash and salt from the Súria processing plant to Barcelona port. Most of ICL Iberia’s shipments are made via a terminal it owns at the port. In addition, ICL Iberia owns and maintains approximately 1.5 kilometers of standard gauge railway at the Súria site that connects to the regional rail network. In 2023, up to three trains left daily with a total payload capacity of 800 tonnes, spread out over about 21 freight cars. The rail route for product transport from Súria to the terminal in the port of Barcelona is about 80 kilometers. The train traction engine and part of the bulk freight car rolling stock is operated by the owner and operator FGC (Ferrocarrils de la Generalitat de Catalunya).
ICL Iberia owns and operates its own facilities at the port of Barcelona through its subsidiary, Tráfico de Mercancias, S.A. (Tramer). The facilities include bulk potash and salt storage warehouses, including freight car and rail truck conveyor unloading facilities, within an area of 80,492 square meters divided into three zones.
As part of the plan to increase ICL Iberia’s production capacity, upgrades have now been substantially completed to logistics infrastructure at the Súria site (including the rail load out facilities) and the Company’s estimation, there is no competition for mineral leases because berth at the Barcelona port, in such a manner that will allow transport and export of about 2.3 million tonnes of potash and salt products per year.
ICL UK has already secured the planning permissionGroup Limited 157
Rotem Amfert Israel (ICL Rotem)
Overview
Rotem Amfert Negev Limited (“Planning Permission”ICL Rotem/Rotem Israel”) for potash, polyhalite, a limited liability company and rock‑salt extractionwholly owned subsidiary of ICL, retains three sites of phosphate open-pit mines (Rotem, Oron, and Zin) in the areaNegev desert region of southern Israel, each with its own beneficiation plant. Since 2021, ICL Rotem has operated only two of its phosphate open-pit mines (Rotem and Oron), due to the discontinuation of its mining activities at Zin in 2020. The Rotem operation is located approximately 17 kilometers to the south of the town of Arad and east of the town of Dimona, at approximately latitude 31°04’00”N and longitude 35°11’50”E. The Oron and Zin operations lie to the southeast of the town of Yeruham. Oron is approximately centered on the geographic coordinates of latitude 30°54’00”N and longitude 35°00’59”E. The Zin operation is approximately centered on the geographic coordinates: latitude 30°50’35”N and longitude 35°05’22”E. These sites are accessible by road and rail.
Figure 4: Location of the Rotem, Oron, Zin, and DSW Properties (Israel)
Israel has alla well-established and high-quality road network making travel and access within the necessary government approvalscountry, and permits for mineral extraction. Planning permission,to the ICL properties, straightforward and efficient. Rotem is 150 kilometers by road from Ashdod, a Mediterranean port, via Route 258 and Highways 25 and 40. The Zin mine is located at the end of the current rail network in the Negev desert. It is linked via an internal private haul road to the Oron mine which is granted10 kilometers from Zin. All three sites of ICL Rotem are connected by local authoritiesrail to the port of Ashdod on the Mediterranean and by road to the port of Eilat on the Red Sea. Exports are mainly handled via Ashdod, where ICL has its own dedicated facilities, though exports to Asia Pacific are usually handled via Eilat.
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Mining Concessions and Lease Agreements
Rotem Israel has been mining phosphates in the United Kingdom,Negev in Israel for more than sixty years. Mining is conducted in accordance with phosphate mining concessions, which are granted as required by the permission required in orderMinistry of Energy under the Mines Ordinance, by the Supervisor of Mines, as well as mining authorizations issued by the Israel Lands Authority. The concessions relate to be allowed to build on land or changequarries (phosphate rock), whereas the authorizations cover the use of land or buildings. The current license is valid upas active mining areas.
Historically, two separate mining concessions were held by ICL Rotem for its operations: (1) Rotem Field (including the Hatrurim Field located 5 kilometers northeast of Rotem), and (2) Zafir Field (Oron and Zin). In December 2021, the Ministry of Energy granted Rotem Israel an extension to a unified concession (which includes all Rotem's mining fields) for an additional three years until the end of 2024. In the fourth quarter of 2023, and accordinglyRotem Israel submitted a bid in the tender for a new agreement must be signed with North York Moors National Park no later than 2020. ICL UK is taking action to extendmining concession held by the planning permit by twenty‑five years.Ministry of Energy. In addition, it was granted an exploration license for all the past, when leases expired, thereCompany's phosphate sites, included in the existing concession. The Company has been no interest from other companies and there is no competitive bidding. ICL UK has a preferential right to renew the leases as it has the Planning Permission to extract potash‑bearing minerals. The entities involvedsuccessful in renewing or obtaining new leases are ICL UK, local solicitors and individual landowners who own the mineral rights, as described above. The particular conditions that must be met in order to retain the leases are payment of annual fees and a royalty payment for minerals extracted from the property to the landowner.its concessions Since 1952.
United Kingdom Concession - Everris
A UK subsidiary from ICL Specialty Fertilizerswithin the Growing Solutions segment (hereinafter – Everris UK), hasLimited) operates peat mines in the UK (Creca, Nutberry and Douglas Water). Peat is used as a raw material forcomponent in the production of detached beds for soil improvement and use as soil substitutes inprofessional growing media. The Nutberry and Douglas Water miningAll sites are owned by Everris UK, while theLimited. The extraction permits for Creca mine is held under a long‑term lease. The mining permits are granted by the local authorities and are renewed after examination of the local authorities. The mining permits were granted up tountil the end of 2051. Mining activity in Nutberry and Douglas Water will cease at the end of 2024,.
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ICL Iberia
Overview
The Company's potash mining licenses that were issuedoperations in July 2015, by the Division of Land and Resources of the Yunnan district in China. With reference to the Haikou Mine (hereinafter – Haikou), the mining license is valid up to January 2043, whereas regarding the Baitacun Mine (hereinafter – Baitacun), the mining license is valid up to November 2018. The mining activities at HaikouSpain are carried out by ICL Iberia (a wholly owned subsidiary of the Company) and the marine transportation performed by Trafico de Mercancias (a wholly owned subsidiary of ICL Iberia). ICL Iberia holds mining rights for two underground potash mines, Cabanasses and Vilafruns, located in accordanceCatalonia in northeast Spain. As part of the Company's strategic decision to concentrate its production at the Súria site (Cabanasses mine), in June 2020, ICL Iberia consolidated its sites and potash production at the Sallent site (Vilafruns mine) was discontinued. The Vilafruns mine has been maintained on a care and maintenance basis since June 2020. As a result, the Company operates only at the Cabanasses mine, which is located in the town of Súria, approximately 12 kilometers north of the district capital of Manresa in the Cardener river valley. The Cabanasses mine is approximately centered on the geographic coordinates: latitude 41°50’27”N and longitude 01°45’07”E. The Vilafruns mine is approximately centered on the geographic coordinates: latitude 41°50’25”N and longitude 01°52’39”E.
The mines are located within the Catalan Potash Basin, a sub basin in the northeast of the Ebro Basin which extends along the southern flank of the Pyrenees through eastern Spain. Sylvinite, consisting of a mixture of potash (sylvite or KCl) and salt of late Eocene age occurs in two seams (Seams A and B) which are vertically separated by 3 to 6 meters and found at depths of approximately 730 to 1000 meters below the surface. At Cabanasses, mining of sylvinite is conducted according to a modified room and pillar method before being transported by conveyor to the surface. Potash is then separated from salt at a production plant located near the mine. The mine site is served by roads/railways and is near major highways. Potash in Súria was first discovered in 1912 and its commercial development began in 1920. ICL purchased the mines in 1998.
Figure 3: Location of Cabanasses and Vilafruns Mines (Spain)
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Mining Concessions and Lease Agreements
ICL Iberia conducts its mining activities in Spain pursuant to concessions granted to it by the Spanish government. ICL Iberia was granted mining rights based on legislation of Spain’s government from 1973 and regulations accompanying this legislation. Further to this legislation, the government of the Catalonia region published special mining regulations whereby ICL Iberia received individual licenses for each of 126 different sites that are relevant to current and possible future mining activities. Some of the licenses are valid until 2037 and the remainder are effective until 2067. The concession for the "Reserva Catalana", an additional site where mining did not commence, expired in 2012. The Company is acting in cooperation with the above mentioned license. Regarding Baitacun, as was estimated at the timeSpanish Government to obtain a renewal of the acquisition,concession. According to the Spanish authorities, the concession period is valid until a final decision is made regarding the renewal.
A total of 126 licenses for the extraction of rock salt and potash, awarded to ICL Iberia, cover the Cabansses and Vilafruns operations covering an area of 42,489 hectares (425sqkm) in the province of Barcelona, and 26,809 hectares (268sqkm) in the province of Lerida. As required by law, the concessions are to be renewed prior to their expiration date. As part of a renewal process, the Company does not intendis required to prepare and present a basic technical report describing the intended use of the mines. If a concession expires, a bidding process will be initiated. ICL Iberia applies in advance for the renewal of mining concessions and, to date, has experienced no difficulties in renewing them.
ICL owns the land on which the Spanish surface facilities are located. The Spanish government owns all the underground mining rights and it has granted ICL concessions to conduct mining activitiesoperations under the land. For further information, see Note 18 to the Audited Financial Statements.
Operations
The Cabanasses mine is accessed by two shafts and a decline. The potash seams are extracted underground using continuous miner machines and transported by a series of conveyors to the Súria processing plant, located at the surface, where it is processed to separate the potash and salt.
The shafts are used for worker access and ventilation while mined material transport is via the decline. The mining method used to extract the seams is a modified room and pillar method. The potash seams and salt horizons do not require drilling or blasting and are mined using electric powered continuous miner machines, equipped with a moveable boom-mounted rotary cutting head. The cuttings are collected and fed into a conveyor that discharges the mined material to the rear of the machine, where it is loaded into 25 tonne diesel-powered haul trucks. The trucks haul the material to ore passes where it is vertically transferred to the development level below and an internal conveyor system transports it to the decline. The five-kilometer decline was completed in April 2021 and is installed with a conveyor that transports the mined material to the Súria processing plant. In addition to transporting sylvinite ore, the conveyor is also used to batch transport some salt mined during development of the underground access tunnels in the foreseeable future.development level.
The completion of the decline and installation of the conveyor system has increased the haulage capacity of the mined material to 1,000 tonnes per hour (compared with previous shaft haulage capacity of 400 tonnes per hour). In addition, the decline and the installation of a new main ventilation fan in 2023 improved ventilation within the mine and air now intakes down both shafts, circulates the working areas and exhausts back out of the decline. This increased ventilation has allowed additional continuous miners, haulage trucks and ancillary equipment to operate within the mine for longer periods of time.
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The mineral processing includes crushing, grinding, desliming, froth flotation, drying and compacting. There are separate warehouses for the final standard and granular potash products. In addition, there is a vacuum salt plant that produces industrial salt (UVS), specialty salt (SP Salt) and pure potash, and a rock salt facility that produces salt for de-icing purposes. In 2023, a total of 601 thousand tonnes of potash product were produced (including 17 thousand tonnes of pure potash). In addition, 448 thousand tonnes of industrial salt, 94 thousand tonnes of specialty salt and 631 thousand tonnes of rock salt were also produced. The power utilized by the Spanish mining operations is purchased from third party electric companies and is generally produced from green energy sources.
As of the date of this report, following the substantial completion of several expansion projects, the annual production capacity of the Súria processing plant is around 1.1 million tonnes of potash product. Mining operations at the Cabanasses mine continue to ramp-up to meet the processing plant capacity.
In additionJune 2020, the activity at the Sallent site (Vilafruns mine) was discontinued, which led to a write off in the amount of $12 million attributed to fixed assets. Due to Vilafruns being placed on a care and maintenance basis with the expectation to vacate the Sallent site, the resources at this mine have remained static over the past four years. Vilafruns is not considered material to the mining concession, certain additional land use approvals are required to conduct mining activities in Haikou. Such land use rights have been obtained, except for rights with respect to a portion of the Haikou Mine (block 4). The application submitted by YPH JV was returned by local authorities in September 2017 and, following discussions with local authorities, the application was resubmitted in February 2018. Although there is no specific timeline for approval by local authorities, we expect that ultimately approval of the application will be obtained.Company’s business or financial condition.
The following table sets forth information regarding our estimatesthe amount of our phosphatethe total mine production of potash at the Súria plant in ICL Iberia, for the three years ended December 31, 2023, 2022 and 2021:
| Potash Production at Súria Plant, ICL Iberia | |||
| 2023 | 2022 | 2021 | |
| Ore hoisted from Cabanasses mine | 2,795 | 2,928 | 2,534 |
| Head Grade % KCl | 24.3% | 25.3% | 26.4% |
| KCl Produced (kt) | 601 | 680 | 614 |
| Product Grade % KCl | 95.5% | 95.3% | 95.5% |
In the beginning of March 2023, a fatal accident occurred at the Cabanasses mine. A gradual ramp-up in production then followed due to the implementation of extraordinary safety measures, which led to production losses.
Property Values
As of December 31, 2023, the overall book value of the property, plant and equipment of the Cabanasses mine amounted to about $613 million.
As of December 31, 2023, the overall book value of the property, plant and equipment of Sallent site amounted to about $3.8 million, Villafruns mine has been fully impaired.
Mineral Resource Estimate
Mineral Resource estimation involves the creation of a computerized geological block model using both the drilling data from the underground drilling campaigns and from the exploratory surface drilling. At Cabanasses, underground drilling is carried out on a regular basis, amounting to around 41,686 meters drilled in 2023. Surface drilling has been conducted at different times over the last decades. The KCI grade is interpolated into the block model using inverse distance method (ID2). Zones that are potentially mineable are defined, considered the thickness, the grade, and the structure of the sylvinite seams. Mineral Resource classification was set using wireframe perimeters within the extents of the modelled mineralization. The Mineral Resource classification methodology considers the confidence in the drillhole data, the geological interpretation, geological continuity, data spacing and orientation, spatial grade continuity and confidence in the Mineral Resource estimation process. Areas identified as being below a cut-off grade of 10% KCl and areas of low seam thicknesses are also considered by ICL Iberia as non-recoverable.
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Measured Mineral Resources are classified based on a drill spacing of 80m – 100m. Indicated Mineral Resources are classified based on a drill spacing of up to 1,700m and within areas covered by seismic survey. Inferred Mineral Resources include the remaining area of the licenses and covered by seismic survey with some limited surface drilling.
In estimating the cut-off grade, resources and reserves, in Israela medium-long term forecast market price of $352 FOB per tonne as of December 31, 2017:2023, and medium-long term operating costs were used. In addition, a forecast currency exchange rate of €0.91 per dollar as of December 31, 2023, was used in the assessment of the economic potential.
Cabanasses – Summary of Potash Resources at the end of the fiscal year ended December 31, 2023.
| Resources | Cut-off grades (KCI) | Metallurgical recovery (KCI) | ||
| Amount (Mt) | Grades/ qualities (KCI) | |||
| Measured mineral resources | 77.4 | 25.0% | 10% | 86.5% |
| Indicated mineral resources | 54.2 | 23.8% | ||
| Measured + Indicated mineral resources | 131.6 | 24.5% | ||
| Inferred mineral resources | 247.2 | 27.2% | ||
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources for Cabanasses have been estimated in accordance with the guidelines of the JORC Code (2012). |
| Rotem | Proven | - | 12 | - | - | 12 | 26% |
| Zin | Proven | - | 16 | 14 | 3 | 33 | 25% |
| Oron | Proven | 18 | 5 | - | - | 23 | 24% |
| Total (Proven) (1) | 18 | 32 | 14 | 3 | 67 |
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Vilafruns – Summary of Potash Resources at the end of the fiscal year ended December 31, 2023.
| Resources | Cut-off grades (KCI) | Metallurgical recovery (KCI) | ||
| Amount (Mt) | Grades / qualities (KCI) | |||
| Measured mineral resources | 12.6 | 31.0% | 10% | 86.5% |
| Indicated mineral resources | 9.4 | 32.1% | ||
| Measured + Indicated mineral resources | 22.0 | 31.5% | ||
| Inferred mineral resources | 30.7 | 28.9% | ||
| (1) | Mineral Resources are reported exclusive of any Ore Reserves. |
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources for Vilafruns have been estimated in accordance with the guidelines of the JORC Code (2012). |
As of December 31, 2023, Vilafruns had 52.7 Mt of potash Mineral Resources which was unchanged from the 52.7 Mt as of December 31, 2022, due to the Sallent site being put into care and maintenance in 2020. The Mineral Resources estimate for Vilafruns is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.3 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
Mineral Reserve Estimate
Mineral Reserve estimation used the geological block model and application of Modifying Factors based on historic data for “Dilution”, “mining recovery” and “cut-off grade” of 19% KCl etc. This data is provided to the Mine Planning Dept. to spatially define the mine planning of access tunnels to all mineable blocks and then mining fleet activity scheduling to plan the life-of-mine.
The parameters used in determining the cut-off grade take into consideration geology (continuity, structure), mining method, mining recovery, mining dilution, plant recovery, technical feasibility, operating costs, and historical, as well as forecast product prices. The cut-off grade calculations are made by economists in ICL Iberia’s finance department. The calculation considers long-run forecast of selling prices, costs and expected ore production under the Long-Range-Plan. A conservative approach in selling prices was chosen.
The Proven and Probable Reserves take into consideration the cut-off grade criteria detailed above. The mining recovery and dilution factors, which are required in the conversion of resources to reserves take into consideration the mining method and the geological conditions in the mine and consist of historical yield data based on 20 years of operations at the mines. The mining recovery ranges from approximately 25% to 60% by ICL Iberia’s “room and pillar” modified layout. The reserve quantity (in tonnes) and grade are quoted as those that are expected to be delivered to the processing plant and are subject to metallurgical recovery factors. Metallurgical recovery factors consist of historical yield data and are based on operational experience. A processing plant recovery of 86.5% is used and is unchanged from 2022.The final product is 95.5% KCl to avoid quality losses.
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Cabanasses – Summary of Potash Reserves at the end of the fiscal year ended December 31, 2023.
| Amount (Mt) | Grades/ qualities (KCl) | Cut-off grades (KCl) | Metallurgical recovery (KCl) | |
| Proven mineral reserves | 29.3 | 25.2% | 19% | 86.5% |
| Probable mineral reserves | 67.0 | 26.2% | ||
| Total mineral reserves | 96.3 | 25.9% |
| (1) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (2) | Mineral Reserves for Cabanasses are classified in accordance with the guidelines of the JORC Code (2012). |
As of December 31, 2023, Cabanasses had 96.3 Mt of potash Mineral Reserves compared to 96.7 Mt as of December 31, 2022, a net decrease of 0.4% mainly due to our continuing mining operations offset by conversion of resources to reserves resulting from exploratory drilling in 2023.
The life of the mine at Cabanasses is approximately 22 years, based on reserves of approximately 96.3 million tonnes (given the annual average mining rate of around 4.3 million tonnes, which excludes salt mining for construction of underground infrastructure).
There are no Mineral Reserves for Vilafruns as of December 31, 2023, which is unchanged as of December 31, 2022, due to the discontinuation of activity at the Sallent site and the Vilafruns mine being put into care and maintenance.
Logistics
ICL Iberia transports by conveyor belt the excavated ore from the Cabanasses mine to the Súria processing plant. The final products, potash and salt, are transported from the plant to its customers by trucks to the local market, and via railway to Barcelona port to the overseas markets.
A designated railway line is used to transport potash and salt from the Súria processing plant to Barcelona port. Most of ICL Iberia’s shipments are made via a terminal it owns at the port. In addition, ICL Iberia owns and maintains approximately 1.5 kilometers of standard gauge railway at the Súria site that connects to the regional rail network. In 2023, up to three trains left daily with a total payload capacity of 800 tonnes, spread out over about 21 freight cars. The rail route for product transport from Súria to the terminal in the port of Barcelona is about 80 kilometers. The train traction engine and part of the bulk freight car rolling stock is operated by the owner and operator FGC (Ferrocarrils de la Generalitat de Catalunya).
ICL Iberia owns and operates its own facilities at the port of Barcelona through its subsidiary, Tráfico de Mercancias, S.A. (Tramer). The facilities include bulk potash and salt storage warehouses, including freight car and rail truck conveyor unloading facilities, within an area of 80,492 square meters divided into three zones.
As part of the plan to increase ICL Iberia’s production capacity, upgrades have now been substantially completed to logistics infrastructure at the Súria site (including the rail load out facilities) and the Company’s berth at the Barcelona port, in such a manner that will allow transport and export of about 2.3 million tonnes of potash and salt products per year.
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Rotem Amfert Israel (ICL Rotem)
Overview
Rotem Amfert Negev Limited (“ICL Rotem/Rotem Israel”), a limited liability company and wholly owned subsidiary of ICL, retains three sites of phosphate open-pit mines (Rotem, Oron, and Zin) in the Negev desert region of southern Israel, each with its own beneficiation plant. Since 2021, ICL Rotem has operated only two of its phosphate open-pit mines (Rotem and Oron), due to the discontinuation of its mining activities at Zin in 2020. The Rotem operation is located approximately 17 kilometers to the south of the town of Arad and east of the town of Dimona, at approximately latitude 31°04’00”N and longitude 35°11’50”E. The Oron and Zin operations lie to the southeast of the town of Yeruham. Oron is approximately centered on the geographic coordinates of latitude 30°54’00”N and longitude 35°00’59”E. The Zin operation is approximately centered on the geographic coordinates: latitude 30°50’35”N and longitude 35°05’22”E. These sites are accessible by road and rail.
Figure 4: Location of the Rotem, Oron, Zin, and DSW Properties (Israel)
Israel has a well-established and high-quality road network making travel and access within the country, and to the ICL properties, straightforward and efficient. Rotem is 150 kilometers by road from Ashdod, a Mediterranean port, via Route 258 and Highways 25 and 40. The Zin mine is located at the end of the current rail network in the Negev desert. It is linked via an internal private haul road to the Oron mine which is 10 kilometers from Zin. All three sites of ICL Rotem are connected by rail to the port of Ashdod on the Mediterranean and by road to the port of Eilat on the Red Sea. Exports are mainly handled via Ashdod, where ICL has its own dedicated facilities, though exports to Asia Pacific are usually handled via Eilat.
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Mining Concessions and Lease Agreements
Rotem Israel has been mining phosphates in the Negev in Israel for more than sixty years. Mining is conducted in accordance with phosphate mining concessions, which are granted as required by the Ministry of Energy under the Mines Ordinance, by the Supervisor of Mines, as well as mining authorizations issued by the Israel Lands Authority. The concessions relate to quarries (phosphate rock), whereas the authorizations cover the use of land as active mining areas.
Historically, two separate mining concessions were held by ICL Rotem for its operations: (1) Rotem Field (including the Hatrurim Field located 5 kilometers northeast of Rotem), and (2) Zafir Field (Oron and Zin). In December 2021, the Ministry of Energy granted Rotem Israel an extension to a unified concession (which includes all Rotem's mining fields) for an additional three years until the end of 2024. In the fourth quarter of 2023, Rotem Israel submitted a bid in the tender for a new mining concession held by the Ministry of Energy. In addition, it was granted an exploration license for all the Company's phosphate sites, included in the existing concession. The Company has been successful in renewing its concessions Since 1952.
Rotem Israel has two lease agreements in effect until 2024 and 2041. As of the reporting date, the Company has an agreement in principle, with the Israel Land Authority - Southern Region, regarding the extension of the lease agreement for Oron plant, which expired in 2017, until the year 2025.
Mining Royalties
As part of the terms of the concessions, in respect of mining of phosphate, Rotem Israel is required to pay the State of Israel royalties based on a calculation as stipulated in the Israeli Mines Ordinance.
In accordance with the Mines Ordinance, the royalty rate for production of phosphates is 5% of the value of the quarried material.
Under the terms of the concessions and in order to continue to hold the concession rights, Rotem Israel is required to comply with additional reporting requirements, in addition to the payment of royalties.
Planning and Building
Mining and quarrying activities require a zoning approval of the site based on a plan in accordance with the Israeli Planning and Building Law, 1965. Such plans are updated, as needed. As of the reporting date, there are various requests at different stages of deliberations pending for consideration by the planning authorities.
In 2016, the District Board of the Southern District approved a detailed site plan for mining phosphates in the Zin Oron area. This plan, which covers an area of about 350 square kilometers, will permit the continued mining of phosphate located in the Zin valley and in the Oron valley for a period of 25 years or until the exhaustion of the raw material – whichever occurs first, with the possibility for extension (under the authority of the District Planning Board).
In addition, as part of the Company’s efforts to locate phosphate rock resources in Israel, in January 2022, the Ministry of Energy granted Rotem Israel an exploration license for phosphate in an area comprising 263 acres north of the Oron Concession. In December 2022, following the completion of a geological survey, the Company received a discovery certificate which provides it with the exclusive right to request a mining license in that area. The Company is working to apply for a concession for approximately 76.6 acres, and consequently mining activity is expected to continue at least until 2025. As such, the Company has not accounted for any resources and reserves for the Oron North area. An additional area where the Company is working to promote a plan for phosphate mining is the Barir field, which is located to the northwest of Rotem. However, currently no mining concession exists for this area. There is no certainty regarding the timelines for the submission of the plan, its approval, or further developments with respect to the Barir field site.
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For further information regarding Rotem Israel's royalties, tax, planning and building proceedings, leases, and other matters, and for a description of certain risks relating to Rotem Israel's concession, see Note 18 to the Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors”, respectively.
Operations
ICL currently operates large surface phosphate mining sites at Oron and Rotem, which are in the southern part of Israel in the Negev region. In addition, the Company has plans to resume mining at the Zin mine subject to business requirements - the Mineral Reserves will be processed at the Rotem facility.
Each of the said fields in Israel has a similar layered structure and geological composition, with the phosphate preserved as relatively thin layers along the margins and within the axes of two northeast to southwest trending asymmetrical synclines (basins or trough-shaped folds). Oron and Rotem lie within a single syncline located northwest of the Zin syncline. The three deposits have been proved over extensive distances in terms of length (Rotem 10 kilometers, Oron 16 kilometers and Zin 22 kilometers) and width (4 kilometers each). The Campanian (Upper Cretaceous period) phosphate rock deposits of Israel are part of the Mediterranean phosphate belt extending from Turkey, through Jordan and Israel, and westward through Egypt, Tunisia and Morocco. The Company began operations at Oron in the 1950s and at Rotem and Zin in the 1970s.
The method of mining in the Negev is by the conventional open pit method using drilling and blasting, hydraulic excavators and rigid dump trucks or dozers with rippers for overburden removal, and front-end loaders and trucks for mining phosphate. Each mine site has varying numbers and thicknesses of over burden, inter burden and phosphate rock layers, so that the size of the mining equipment conforms to the mining sites and the operating requirements. In all the mines, stripping of the waste material and mining of the phosphate are performed by entirely conventional methods. The Company is committed to continuing restoration work, as it has done to date, at all of its mines.
All three sites have associated beneficiation plants, which include crushing, grinding and flotation processing methods. The beneficiation plants at Rotem and Oron are currently operational, while production at Zin was discontinued in 2020. At Rotem site (located in Mishor Rotem), additional processing facilities are also present and include two sulphuric acid plants, three green phosphoric acid plants, a white phosphoric acid plant, three superphosphate plants, two granular fertilizer plants and an MKP plant. Most of the production is used to produce phosphoric acid and fertilizers.
The plants at Mishor Rotem are powered primarily from electricity generated by the Company at its sulphuric acid plants, as well as from gas combustion from the national gas network (which recently replaced oil shale) and by the national grid. All the power utilized by the Oron beneficiation plant is purchased from the national grid in Israel. All water used by the site is supplied and approved for industrial use by the state authorities.
For further information and description of certain risks relating to the mining operation at the Negev Desert, see Note 18 to the Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors”, respectively.
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Production
The following table sets forth the amount of the total mine production of phosphate ore at the Company’s mines in the Negev Desert supplied to the beneficiation plants for the three years ended December 31, 2023, 2022 and 2021:
| Year Ended December 31, | |||
| 2023 | 2022 | 2021 | |
| Tonnes mined (kt) | 5,770 | 4,488 | 4,893 |
Grade (%P2O5 before / after beneficiation) | 25% / 32% | 26% / 32% | 26% / 32% |
The following table sets forth the approximate amounts of products produced after processing by our operations in the Negev Desert for the three years ended December 31, 2023, 2022 and 2021:
| Product Produced after processing at Rotem Israel (kt) | |||
| 2023 | 2022 | 2021 | |
| Phosphate Rock* | 2,309 | 2,170 | 2,431 |
| Green Phosphoric Acid | 520 | 508 | 531 |
| Fertilizers | 1,033 | 1,044 | 1,082 |
| White Phosphoric Acid (WPA) | 150 | 176 | 168 |
| Specialty Fertilizers | 78 | 95 | 72 |
* Figures relate to phosphate concentrate produced by the Oron and Rotem beneficiation plants for further processing at the Rotem acid and fertilizer facilities.
Property Values
As of December 31, 2023, the overall book value of the property, plant and equipment of ICL Rotem, amounted to about $811 million.
Mineral Resource Estimate
The reported P2O5 grade is intended for the phosphate rock product, after physical beneficiation (usually dis-aggregation, sieving and sizing), designed to replicate actual plant crushing and screening performance. The reported grade and tonnages, organic matter and chlorine contents are designated for the in-situ material.
At Rotem and Zin, future resources are in the deeper, more steeply dipping, or remote parts of the deposits. They have higher average stripping ratios and ore haulage distances than do those at the older, smaller, and more compact mining operations at Oron. In general, production is progressively toward deeper pits.
The phosphates are classified by ICL Rotem based on levels of organic content (resulting from the presence of micro-organisms and algae) during formation of the phosphate deposits. The classification is as follows: White (<0.25% organic matter), Low Organic (0.25 to 0.35% organic matter), Brown and High Organic (>0.35 to 1.0% organic matter) and Bituminous (>1.0% organic matter). Areas closest to the center of the depositional basins are generally associated with highest levels of organic content.
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The organic content of the phosphates dictates the processing methods and final products as follows:
White phosphate from Oron is typically used for higher added value products such as white phosphoric acids (WPA) for food applications.
Low organic from Rotem is typically used in green (impure) phosphoric acids for agricultural applications.
Significant brown phosphate resources (70 million tonnes) exist at Oron and pilot trials are on-going to confirm a process route to produce green phosphoric acid from brown phosphate rock. As such, no Mineral Reserves are currently reported for brown phosphate.
Bituminous phosphates from the margins of the Rotem deposit are mined and used to produce fertilizers. Further significant bituminous phosphate resources (150 million tonnes) exist within the deeper parts of the Rotem deposit, however, no mining of these has occurred due to the presence of thick overburden (10 to 50 meters) which contains oil shale. The oil shale contains 12% to 21% organic matter and is susceptible to spontaneous combustion when exposed by mining. This material is therefore not currently mined or stockpiled by ICL Rotem and no Mineral Reserves are currently reported for most of the bituminous phosphate at Rotem. Research is being undertaken regarding the possibility of stockpiling the overburden using capping. Additional research is being undertaken to produce green acids and WPA from bituminous phosphate and further testing is required to confirm if a suitable process route can be found.
The deposits have been extensively explored by surface exploration drilling using rotary percussion methods. Core drilling is occasionally undertaken when additional geological information is required. Drilling is initially undertaken on 200 to 250 meters spacing and then infilled on 50 to 70 meters spacing.
In determining these reserves and resources, a cut‑offcut-off grade of 20% to 25% P2O5 was applied, depending on the processing characteristics of the phosphate rock and the existing processes.mineral processing method. The cut‑offcut-off grade differs for each mine in accordance with the beneficiation process and enrichment capacity: a cut‑offcapacity. A cut-off grade of 20% P2O5 was applied at Oron, a cut‑offafter it was proven that the required quality can be reached. A cut-off grade of 23% P2O5 was applied at Zin, and a cut‑offcut-off grade of 25% P2O5 was applied at Rotem. The cut‑offcut-off grade for Oron is lower because ICL Rotemthe Oron plant has the appropriate beneficiation process for chalk phosphate rock with limestone, which characterizes the white phosphate and, therefore, the beneficiation process, through the flotation process,, is extremely efficient. The cut‑offcut-off grade for the Rotem mine is higher because the beneficiation process there has a limited grinding and flotation system, and only medium to high gradehigh-grade phosphate can be fed (which is appropriate for the existing reserves at Rotem). The cut‑offcut-off grade for Zin is slightly higher than that of Oron because of the presence of marl and clay thatat Zin, which reduces the efficiency of the enrichment process.
In estimating the cut-off grade, resources and reserves, an average of the previous three years’ FOB Ashdod market prices were used: $1,234 per tonne of green phosphoric acid, $2,344 per tonne for WPA, $1,767 per tonne for MKP, and $227 per tonne for GSSP as well as an average of the previous three years’ currency exchange rates of NIS 3.42 and €0.90 per dollar as of December 31, 2023, and operating costs are used in the assessment of economic potential.
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Rotem, Zin, and Oron – Summary of Phosphate Mineral Resources at the end of the fiscal year ended December 31, 2023.
| Category | White Phosphate | Low Organic Phosphate | High Organic & Bituminous Phosphate | Total (Mt) | Average Grade | Cut-off Grades | Metallurgical Recovery | |
| (millions of tonnes) | (P2O5) | |||||||
| Rotem | Measured | - | - | 156.7 | 156.7 | 27.5% | 25% | 54% |
| Indicated | - | - | 10.0 | 10.0 | 26.0% | |||
| M + Ind | - | - | 166.7 | 166.7 | 27.4% | |||
| Inferred | - | - | - | - | - | |||
| Zin | Measured | - | 3.0 | 35.7 | 38.7 | 26.8% | 23% | 56% |
| Indicated | - | - | - | - | - | |||
| M + Ind | - | 3.0 | 35.7 | 38.7 | 26.8% | |||
| Inferred | - | - | - | - | - | |||
| Oron | Measured | - | - | 69.8 | 69.8 | 27.5% | 20% | 59% |
| Indicated | - | - | - | - | - | |||
| M + Ind | - | - | 69.8 | 69.8 | 27.5% | |||
| Inferred | - | - | - | - | - | |||
| Total | Measured | - | 3.0 | 262.2 | 265.2 | 27.4% | ||
| Indicated | - | - | 10.0 | 10.0 | 26.0% | |||
| M + Ind | - | 3.0 | 272.2 | 275.2 | 27.3% | |||
| Inferred | - | - | - | - | - | |||
| (1) | Mineral Resources are reported exclusive of any Mineral Reserves. |
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources for Rotem, Zin, and Oron are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results (2021). |
| (4) | The reported Mineral Resource estimate was constrained by limiting polygons for the purpose of establishing reasonable prospects of economic extraction based on potential mining, metallurgical and processing grade parameters identified by mining, metallurgical and processing studies performed to date on the project. |
As of December 31, 2023, ICL Rotem had 275.2 Mt of phosphate resources compared to 275.4 Mt as of December 31, 2022, a decrease of 0.2 Mt which resulted from mining brown phosphate rock at Oron for on-going processing trials. There have been no upgrades of resources to reserves and no further exploration drilling.
The Mineral Resources estimate for ICL Rotem is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.4 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
Mineral Reserve Estimate
For purposes of determining the cut‑offcut-off grade, utilization and quantities parameters, accountconsideration was taken of thegiven to geology factors (continuity, structure), mining method,methods, mining dilution, plant utilization, technical feasibility, operating costs, and historical, andas well as current product prices. The parameters employed in the calculation are as follows: on‑on site tonnes (multiplying area by layer thickness and phosphate density);, recoverable tonnes (tonnes of mineral which can be mined, taking into account mining dilution);, mineable tonnes (recoverable tonnes from which the tonnes produced are deducted);, stripping ratio (the quantity of waste removed per tonne of phosphate rock mined);, planned dilution;dilution, cost per tonne for mining, (typically related to transport distance to beneficiation plant); cost per tonne including reclamation;reclamation, and unplanned dilution (5%(7%-15% unplanned dilution is taken into account based on the data from the mining inoperation and the data from the problematic areas). ICL Rotem’sRotem Israel’s yearly mining plan is not determined by the minimum cut‑offcut-off grade, and fluctuations in commodity prices rarely affect its cut‑offcut-off grade.
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The cut‑off grade calculations come from historical yield data and ICL Rotem’s historical experience with mining, andmining. They are adequately calculated and modelledmodeled by itsRotem's geologists, operation engineers and economists. The calculation takes the ore grade in‑situ, converts it into extracted ore with ICL Rotem mining methodmethods, and estimates the plant yield depending on the grade. Economic modellingmodeling then gives the cut‑off figures currently used by ICL Rotem.
The proven reservesProven Reserves above the cut‑off grade were obtained from the calculated on‑site resources taking into accountconsideration the mining method, the rate of mining dilution, and in‑plant recovery, based on ICL Rotem’s historical data. In order toTo convert the resources into reserves, an account is taken separately of the mining dilution rate, mining method and the geological conditions, including historical yield data,, and are based on the previous five years’ experience.operational data. The mining dilution rate in the Company's mines in Israel’s southern region is 2.5% and takes into account the continuity of the layers and the geological structure. The quantity and grade of the calculated reserves are those that are expected to be transferred to the processing plant and are subject to recovery indices in the utilization plant. The updated utilization in the plant varies between the sites as it consists of historical yield data, which is currently between 46% (at Oron and Rotem) and 48% (at Zin). These differences in metallurgical recovery rates are due to differences in the beneficiation process at the different mines. Proven reserves have been explored by borehole intersections typically at 50 to 70 meters intervals. Each of the three plants at the mines has been developed over the past few decades for the optimum upgrading of the phosphate rock to concentrate ore containing typically 31% to 32% P2O5. The conversion ratio for most of the phosphate layers is 1.8 tonnes for every 1 cubic meter, wherewhereas a conversion ratio of 2.0 tonnes per cubic meter is used for hard, calcareous beds. These factors are used based on the basis of long experience and are considered to be reasonable.
| • | Oron mine: The life of the mine at Oron is approximately 1.3 years based on a reserve of 3.6 million tonnes of white phosphate and an annual average mining rate of 2.7 million tonnes of white phosphate. The Oron reserves of low organic phosphate can be used as part of the future raw materials for MGA production at ICL Rotem and for other downstream products. |
| • | Rotem mine: The life of the mine at Rotem is approximately 2.9 years based on reserves of nominally 5.2 million tonnes of low organic/low magnesium phosphate and an annual average mining rate of 1.8 million tonnes. The low organic, low-magnesium phosphates are suitable for phosphoric acid production. |
| • | Zin mine: In mid-2020 the Company discontinued mining and processing activities at Zin, while mine restoration at the site continues. When mining restarts, the life of the mine at Zin is expected to be approximately 6.9 years based on a reserve of 12.4 million tonnes of low organic phosphate and an annual average mining rate of 1.8 million tonnes. The Zin reserves of low organic phosphate can be used as part of future raw materials for MGA production at ICL Rotem and for other downstream products. |
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Rotem, Zin, and Oron – Summary of Phosphate Mineral Reserves at the end of the Fiscal Year Ended December 31, 2023.
| Category | White Phosphate | Low Organic Phosphate | High Organic & Bituminous Phosphate | Total (Mt) | Average Grade | Cut-off Grades | Metallurgical Recovery | |
| (millions of tonnes) | (% P2O5) | |||||||
| Rotem | Proven | - | 5.2 | 10.7 | 15.9 | 28.1% | 25% | 54% |
| Probable | - | - | - | - | ||||
| Zin | Proven | - | 12.4 | - | 12.4 | 24.8% | 23% | 56% |
| Probable | - | - | - | - | ||||
| Oron | Proven | 3.6 | 2.7 | - | 6.3 | 23.3% | 20% | 59% |
| Probable | - | - | - | - | ||||
| Total | Proven | 3.6 | 20.3 | 10.7 | 34.6 | 26.0% | ||
| Probable | - | - | - | - | ||||
| (1) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (2) | Mineral Reserves for Rotem, Zin, and Oron are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results (2021). |
As of December 31, 2023, ICL Rotem had 23.9 Mt of white and low organic phosphate reserves (suitable for acid production), compared to calculate our reserves in the Negev28.5 Mt as of December 31, 2017 are as follows: $624 per tonne for green phosphoric acid, $1,212 per tonne for WPA, $1,223 per tonne for MKP, $894 per tonne for soluble MAP, $305 per tonne for GTSP, $169 per tonne for GSSP,2022, a decrease of 16%. This decrease was due to depletion arising from mining at Rotem and $87 per tonne for phosphate rock.Oron.
| Cabanasas | Proven | 19 | 26% |
| Probable | 56 | 25% | |
| Total Proven and Probable | 75 | 25% | |
| Vilafruns | Proven | 6 | 24% |
| Probable | - | - | |
| Total Proven and Probable | 6 | 24% | |
| Total(1) | Proven and Probable | 81 | 25% |
| Block 1 | Proven | 4 | 21% |
| Block 2 | Proven | 6 | 21% |
| Block 3 | Proven | 31 | 22% |
| Block 4 | Proven | 16 | 22% |
| Total (Proven) | 57 |
Logistics
Most of ICL’s products, whether in a solid or liquid state, are transported in bulk from Rotem Oron and ZinOron by road andor rail to either the Ashdod port or by road to the Eilat port. From Eilat, ICL’s products are transported by ship to markets in the Far East,Asia Pacific region, and from Ashdod, they are transported by ship to Europe, South America and South America.the US.
Within the Rotem site, there is a rail loading facility that typically loads up to 30 wagons for each delivery. Approximately two1.4 million tonnes of products per year are transported by rail fromto the Rotem site to Ashdod. About 200Ashdod port, about 250 thousand tonnes of productsby road to the Ashdod port and about 50 thousand tonnes are transported by road from Rotem to the port of Eilat.Eilat.
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From the Ashdod port, approximately 650 thousand tonnes of sulphur are transported to Rotem each year. Sulphur arrives at the port of Ashdod from overseas, where it is loaded intoonto road‑going trucks and transported to the Company’s sulphur dispatch, situated approximately 5 kilometers away.from the port. At the depot, it is loaded into rail cars and then transported to Mishor Rotem.
Dead Sea Works
Overview
Dead Sea Works Ltd (DSW) is located on the Mediterranean coast, approximately 40 kilometers south of Tel Aviv and approximately 120 kilometers northwestsouth-west shore of the Dead Sea’s southern basin. It is one of the world’s largest producers and suppliers of potash products, in addition to a range of chemical products. The main product produced at the plant is muriate of potash (MOP) for use as agricultural fertilizer. DSW has 37 ‘ponds’ covering an area of 146.7 sqkm and associated processing facilities.
The DSW processing facilities are approximately centered on the geographic coordinates: latitude 31°02’18”N and longitude 35°22’15”E. The Dead Sea region is the lowest point on the earth’s surface.
Figure 5 : Location of the DSW, Rotem, Oron and Zin Properties (Israel)
Water from the northern Dead Sea basin is pumped into evaporation ponds, which cause the carnallite to precipitate out of solution, sink and deposit on the bottom of the ponds. A barge harvests the carnallite and pumps this solution to processing facilities located at the southern end of the site.
DSW is located alongside Highway 90 which runs broadly north – south from the port of Eilat in the south, northwards alongside the Dead Sea and onwards through Tiberias near the Sea of Galilee in the north of the country. Products from DSW are transferred to either the port of Ashdod (on the Mediterranean Sea) or the port of Eilat (on the Red Sea).
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Mining Concessions and Lease Agreements
Pursuant to the Israeli Dead Sea Concession Law, 1961 (hereinafter – the Concession Law), as amended in 1986, and the concession deed attached as an addendum to the Concession Law, DSW was granted a concession to utilize the resources of the Dead Sea and to lease the land required for its plants in Sodom for a period ending on March 31, 2030. According to the Concession Law, should the government decide to offer a new concession after the expiration date to another party, it will first offer the new concession to DSW on terms that are no less attractive than those it may offer to that party.
The concession covers a total area of 652 sqkm, including the evaporation ponds that cover an area of 146.7 sqkm.
In accordance with section 24 (a) of the Supplement to the Concession Law, it is stated, among other things, that at the end of the concession period all the tangible assets located in the concession area will be transferred to the government in exchange for their amortized replacement value – the value of the assets as if they are purchased as new at the end of the concession period, less their technical depreciation based on their maintenance condition and the unique characteristics of the Dead Sea area. Pursuant to section 24 (b) of the Supplement to the Concession Law, it is stated that capital investments made during the 10-year period prior to the end of the concession require the prior consent of the Government, unless they can be fully deducted for tax purposes before the end of the concession period. However, the Government's consent to any fundamental investment that may be necessary for the proper operation of the plant will not be unreasonably delayed or denied. In 2020, an agreement was concluded between the Company and the Israeli Government for the purpose of implementing section 24(b).
The agreement determines, among other things, the manner of examining new investments and the consent process. In addition, the agreement determines the Company's commitment to invest in fixed assets, including for preservation and infrastructure, as well as for ongoing maintenance of the facilities in the concession area (for the period beginning in 2026) and the Company's commitment to continue production of potassium chloride and elemental bromine (for the period commencing 2028), all subject to the conditions specified in the agreement. Such commitments do not change the way the Company currently operates. The Company engages with the Israeli Government in accordance with the agreement and obtains investment approvals as required.
In consideration of the concession, DSW pays royalties and lease rentals to the Government of Israel and is subject to the Law for Taxation of Profits from Natural Resources, on addition to regular income tax.
For further information regarding ICL Dead Sea royalties, tax and other matters, see Notes 15 and 18 to our Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors.
Operations
The concentration of minerals extracted from the Dead Sea (including potash and bromide), constituting the raw materials for production, is gradually increasing due to the hydrological deficit experienced by the Dead Sea over the past 40 years.
ICL’s extraction of minerals from the Dead Sea begins with an evaporation process facilitated by the hot and dry desert climate of the Dead Sea region. Due to the hydrological deficit, the sea is declining at a rate of over 1 meter per year and is currently about 437 meters below sea level. As a result, the Dead Sea is divided into two parts: the natural Northern Basin and the Southern Basin where dams and artificial evaporation ponds have been constructed.
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The production process begins with the pumping of brine from the Northern Basin into the evaporation ponds in the Southern Basin (about 15 kilometers) using the Company’s pumping station. In 2023, ICL pumped approximately 455 million cubic meters of water from the Northern Basin into the evaporation ponds, of which, approximately 304 million cubic meters of brine were returned at the end of the process to the Northern Basin. In 2023, the Company produced approximately 3.8 million tonnes of potash from the Dead Sea, as well as 143 thousand tonnes of bromine, 17 thousand tonnes of metal magnesium, 129 thousand tonnes of salt and 111 thousand tonnes of solid magnesium chloride.
The evaporation ponds extend over an area of approximately 150 square kilometers and are divided into two main sub systems – an array of ponds for precipitating salt (mineral waste from the production process), and a series of ponds for precipitating carnallite (the target mineral constituting a raw material for production of potash).
The salt pond known as Pond 5 is the largest pond at approximately 80 square kilometers and consists of 9 sub-ponds (156, 155/3 to 155/1, and 154/5 to 154/1). Pond 5 was built during the 1960s by construction of a large dam, where in the center of the dyke surrounding it a partition (separation clay core) was installed for sealing and preventing potential leakage of solutions. This dam marks the Southern Basin of the Dead Sea on the Israeli side and allowed the continued existence of the Southern Basin due to the system of pumping stations and flowing channels that are operated as part of the industrial operational system of the evaporation ponds. In order to continue and operate Pond 5, the dyke was raised several times during the last 50 years.
The evaporation processes give rise to concentration of the brines and the precipitation of the salt to the floor of the pond. The remaining brines are rich in potash, magnesium and bromide. These brines are pumped into the systems of other ponds, and as a result of the continued evaporation, the carnallite precipitates. Carnallite (MgCl2KCl(H2O)6) is the raw material used for production of potash, metal magnesium and chlorine and contains around 27% KCl. Within the DSW ponds, salt is also present and the composition of the pond carnallite is approximately 23% KCl. The carnallite is harvested from the ponds by floating barges and is sent, as slurry, to our production plants. The overall grade of the harvested material is around 20% KCl when accounting for the salt contained in it. The brine from the end of the carnallite ponds is used as a raw material in the production of bromine and magnesium chloride.
The rise of the water level of Pond 5 -
Minerals from the Dead Sea are extracted by way of solar evaporation, whereby salt precipitates onto the bed of Pond 5, located at one of DSW’s sites. The precipitated salt creates a layer on the Pond 5 bed of approximately 16 million cubic meters per year. The production process of the raw material requires that a fixed brine volume is preserved in Pond 5. Failure to maintain a constant volume of brine in Pond 5 could result in a reduction of production capacity.
In addition, rising of the water level of Pond 5 above a certain point may cause structural damage to the foundations of hotel buildings situated close to the water’s edge, to the settlement of Neve Zohar and to other infrastructure located along the western shoreline of the Pond.
The preservation of the water level in Pond 5 at its maximum height (15.1 meters), which was reached at the end of 2021, was conducted through a joint project of the Dead Sea Preservation Government Company Ltd., and DSW (which financed 39.5% of the project's cost), for construction of coastline defenses. The project included the raising of the dyke along the western beachfront of Pond 5, across from the hotels, together with a system for lowering subterranean water. The construction work with respect to the hotels' coastline was completed, and the elevation work in the intermediate area between two hotel complexes conducted by the Dead Sea Preservation Government Company Ltd. is nearing completion.
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Commencing 2022 onwards, the brine volume in Pond 5 is preserved by the Salt Harvesting Project ("the Permanent Solution”). An electric powered cutter suction dredger is used to recover approximately 8 million tonnes of salt per year. The salt is contained within a slurry which is pumped to the eastern area of the pond and is deposited on dedicated stockpiles which are constructed and managed by excavators. The salt is allowed to dry and the remaining brine solution is returned to the pond under gravity. The stockpiled salt will eventually be transferred back to the Northern Basin using a 24 kilometer conveyor system (currently undergoing detailed engineering design) and is planned to be commissioned in 2027. In addition, the Company is working to include a second dredger with commissioning planned in 2026. The Harvesting Project's plan was approved by the National Infrastructures Committee and the Israeli Government.
For further information, see Note 18 to our Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors.
The receding level of the Dead Sea is not to be confused with the rising water level in Pond 5 discussed above. These two seemingly contradictory phenomena are occurring simultaneously, as Pond 5 is in the Southern Basin at a higher elevation than the main body of the sea lying to its north, necessitating a special pumping station to constantly feed the pond with brine. While the brine level of Pond 5 is rising due to the accumulation of salt on its floor and the continuous pumping of brine from the Northern Basin of the Dead Sea, the water level of the Northern Basin is receding, due to the reduction of the flow from the Jordan river to the Northern basin and evaporation, including evaporation from the ponds of ICL and Arab Potash Company (APC) for their production processes. As a result of the decline of the Dead Sea level, sinkholes in the Dead Sea area are occurring with increasing frequency over recent years. Most sinkholes develop in the Northern Basin of the Sea, where the pumping station and the feeding canal of DSW are located. To protect operational infrastructure, DSW monitors the area and fills sinkholes when they appear.
An additional effect of the decline in the level of the Dead Sea is the erosion of the Arava stream, which flows along the international border between Israel and Jordan. This erosion could endanger the future stability of the eastern dykes in the array of salt and carnallite ponds. The Company is analyzing the situation in order to find solutions to prevent or retard this occurrence in the long term. The Company continues to conduct ongoing monitoring and activities on site to protect the dykes. As part of these efforts, in 2020 the Company completed the research phase aimed at gathering information for the detailed planning of a project to prevent the continued erosion of the stream. The detailed design was completed in 2022 and optimization works are currently being undertaken by the Company. All work is being implemented with full cooperation from the Arab Potash Company. Prior to commencing the project, relevant permits from the authorities are required, due to the project's engineering complexity, proximity to the border, soil instability and the environmental sensitivity of the entire area. Insofar as it is decided to commence the project, the Company estimates that its completion is likely to take several years.
For further information, see “Item 3 - Key Information— D. Risk Factors.
The Company has operated a new cogeneration power station in Sodom, Israel since 2018. This power station supplies electricity and steam required to support production of ICL's plants at the Sodom site, and it sells its surplus electricity to other ICL companies and external customers via the Tzefa site.national grid in Israel. It has a capacity of about 330 tonnes of steam per hour and about 230 MWh. The Company operates the power station concurrently with an older power station which continues to operate on a limited basis as a "hot back up". Due to the new plant's operation by natural gas, as well as its high efficiency and advanced pollution reduction technologies, the new plant also allows for a significant reduction in direct air emissions, including greenhouse gas emissions.
Production
The following table sets forth the amount of our total production at DSW for the three years ended December 31, 2023, 2022 and 2021:
| Production (kt) | |||
| 2023 | 2022 | 2021 | |
| Potash | 3,819 | 4,011 | 3,900 |
| Compacting plant* | 1,737 | 1,561 | 1,858 |
| Bromine | 143 | 178 | 182 |
| Cast Mg | 17 | 22 | 18 |
*Figures relate to granular potash produced from total potash
Property Value
As of December 31, 2023, the overall book value of the property, plant and equipment of ICL Dead Sea, as presented in its financial statements, amounted to about $6 billion, which is based on Replacement Cost accounting (as used assets) and is supported by an opinion from an independent appraiser.
The Company believes that the applied Replacement Cost Methodology used in the opinion for estimating the fair value, coincides with the methodology mentioned in the Concession Law for future valuation of the Property, Plant and Equipment upon termination of the concession period. Nevertheless, there could be other interpretations to the manner of implementation of the Concession Law’s provisions or with respect to the valuation methodology. Therefore, the estimated value with respect to the Concession Law could materially differ from the Company's estimates, even with respect to the same assets and dates.
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Mineral Resource Estimate
DSW is not a typical mining operation with a finite Mineral Resource, explored by drilling, that is estimated and classified. It is also not a typical solution mining operation that would require an assessment of porosity and fluid flow. However, even though the source of brine is renewed to a certain extent by inflow to the northern Dead Sea basin, the resource cannot be considered either fully renewable or infinite, given that there are certain engineering, licensing, and environmental constraints. The Mineral Resource estimate is therefore based on the following steps:
| 1. | Determination of the pumping rate of brines from the northern Dead Sea area to the lagoons. |
| 2. | Determination of expected recovery of product based upon: |
| a. | Ability to determine composition and consistency of supply. |
| b. | Ability to predict consistency of evaporation and mineral precipitation. |
| c. | Ability to predict consistency of the split into various products. |
| 3. | Determination of Mineral Resource classification is based upon: |
| a. | Any variation in the supply composition. |
| b. | Any variation in the return flow of brines to the northern Dead Sea basin to assess efficiency and consistency of process. |
| c. | Variation in the precipitation of mineral amounts. |
| d. | Accuracy of sonar measurements in determining reconciliation. |
| 4. | Consideration of the length of the extraction license held by ICL. |
| 5. | Assessment of potential changes to any of the above factors during the remaining length of the license. |
Mineral Resources must have reasonable expectations of eventual economic extraction. Therefore, in assessing Mineral Resources for DSW we also consider the length of the license allowing the abstraction of waters from the northern Dead Sea basin to DSW.
It is also important to consider the future external impact on what is a dynamic hydrological system. The primary factor that could impact the source brines is the continuing decrease in the sea level of the northern basin of the Dead Sea and its potential effect on the chemistry of the Dead Sea water. A water deficit due to reduced inflow results in changing the chemistry of the remaining brine. The concentration of KCl has increased over time (at an annual rate of +0.05% over 20 years), and the concentration of NaCl has decreased due to halite deposition in the northern Dead Sea basin. This reduction in water level with associated changes in water chemistry are predicted to continue.
In estimating the cut-off grade, resources and reserves, an average of the previous three years’ market prices of $425 FOB per tonne as of December 31, 2023, operating costs, and the average of the previous three years’ currency exchange rates of NIS 3.42 per dollar as of December 31, 2023, are used for the assessment of economic potential.
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DSW - Summary of Potash Mineral Resources at the end of the fiscal year ended December 31, 2023.
| Classification | Product | Amount (Mt) | Grades/ qualities (KCl) | Cut-off grades (KCl) | Metallurgical recovery (KCl) |
| Measured | KCl | 225 | 20% | n/a | 100% |
| Indicated | KCl | 1,500 | 20% | ||
| Measured + Indicated | KCl | 1,725 | 20% | ||
| Inferred | KCl | 445 | 20% | ||
| Total | KCl | 2,170 | 20% |
| (1) | Potential brine volume is based upon the dynamic brine chemistry, estimated pumping rate from the Northern Dead Sea Basin multiplied by the potential extraction period until the year 2133. |
| (2) | Mineral Resources are reported exclusive of any Mineral Reserves. |
| (3) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (4) | Mineral Resources for the DSW are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results (2021). |
As of December 31, 2023, DSW had 2,170 million tonnes of potash resources, which is unchanged since December 31, 2022, as there have been no upgrades of resources to reserves as no further geological or hydrological studies have been conducted in 2023. The Mineral Resources estimate for DSW is based on factors related to predictive models following assumed water inflow to the Dead Sea, as well as the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.5 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
Mineral Reserve Estimate
DSW – Summary of Potash Reserves at the end of the fiscal year ended December 31, 2023.
| Amount (Mt) | Grades/qualities (KCl) | Cut-off grades (KCl) | Metallurgical recovery (KCl) | |
| Proven mineral reserves | 138.5 | 20% | n/a | 100% |
| Probable mineral reserves | - | - | ||
| Total mineral reserves | 138.5 | 20% |
| (1) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (2) | Mineral Reserves for the DSW are classified in accordance with the guidelines of the PERC Code (2021). |
As of December 31, 2023, DSW had 138.5 million tonnes of potash reserves compared to 159.5 million tonnes as of December 31, 2022, a decrease of 13% due to ongoing extracting operations. The Mineral Reserves estimate for DSW may be impacted by material assumptions regarding forecasted product prices, production costs, permitting decisions (most notably the 2030 expiration of the concession, which is assumed to occur for purposes of calculating the reserves; an extension would increase reserves), or other relevant factors that may positively or negatively affect the reserve estimate. For further discussion of the material assumptions relied upon, please refer to Section 12.5 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
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The current life of the mine based on the current concession at DSW is nominally 6.25 years (to March 31, 2030) based on the Mineral Reserve of 138.5 million tonnes and the current annual mining rate of around 22 million tonnes. “Mining” is set at 100% recovery and 0% planned dilution.
Logistics
The potash produced at ICL’s Dead Sea facilities is transported by means of a conveyor belt that was built over 18 kilometers to the railhead located at Tzefa in Mishor Rotem, and from there the output is transported to the Ashdod port by train or by truck, or to the Eilat port by truck. Other products are transported by truck and train to ports for export.
The port of Eilat is located in the far south of Israel on the Red Sea coast. It is approximately 180 kilometers due south of Rotem and about 200 kilometers from Sodom and is accessible by road. Shipments exiting the Eilat port are to the Far East,India and Asia Pacific, whereas sales to Europe, South America and the U.S. exitUS depart from the Ashdod port. Sales
YPH China
Overview
Yunnan Phosphate Haikou (YPH), ICL's subsidiary in China, which is equally owned with Yunnan Phosphate Chemicals Group Corporation Ltd. ("YYTH"), holds a phosphate mining license that was issued in 2015 by the Division of Land and Resources of the Yunnan district in China for the Haikou Mine (hereinafter – Haikou) which the Company operates and which is valid until January 2043. In addition, the Company held an unutilized mining license for the Baitacun mining site which expired in April 2023. In 2022, the Company completed a risk survey to assess the feasibility and profitability of this mining site and is currently working to renew its license for an additional ten years. As such no Mineral Resources or Mineral Reserves are currently stated for Baitacun.
Haikou is an open pit mine located to the west of Haikou Town, in the Xishan district, 30 kilometers south of Kunming City. Haikou is approximately centered on the geographic coordinates: latitude 24°46’33”N and longitude 102°28’29”E. The Baitacun mine, where mining activities have not yet commenced, is located several kilometers from the Haikou mine.
The Haikou mine has been in operation since 1966 and the mining license is spread over 9.6 square kilometers. The Haikou mine is divided into four blocks. The phosphate sources in blocks 1 and 2 have almost been fully depleted. The mining in block 3 began in 2015 and the mining activities in block 4 began at the end of 2017.
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Figure 6 : Location of Haikou Mine (China)
Mining Concessions and Lease Agreements
With respect to the mining rights, in accordance with China "Natural Resources Tax Law", YPH pays royalties of 8% on the selling price based on the market price of the rock prior to its processing.
In 2016, a subsidiary of YYTH (hereinafter – YPC) issued a statement whereby in 2010 it entered into agreements with the local authority of Jinning County, Yunnan Province and Jinning Lindu Mining Development and Construction Co. Ltd. (hereinafter - Lindu Company), according to which Lindu Company is permitted to mine up to two million tonnes of phosphate rock from a certain area measuring 0.414 square kilometers within the area of the Haikou mine (hereinafter – the Daqing Area) and to sell such phosphate rock to any third party in its own discretion.
YPC has undertaken that YPH’s mining rights in the Haikou mine will not be adversely affected by the above-mentioned agreements. It was decided that YPH should conduct further communications with YPC and Lindu Company to protect its legal rights and to urge the parties to reach a fair, just, and reasonable solution to this issue as soon as possible.
For further information regarding the concessions in China including royalties, mining licenses, rights, and other matters, and for a description of certain risks relating to the operations in China, see Note 18 to the Audited Financial Statements and “Item 3 - Key Information— D. Risk Factors”, respectively.
Operations
The phosphate deposits at Haikou and Baitacun are part of an extensive marine sedimentary basin of late Precambrian to early Cambrian age. The deposits occur as seams in which the phosphate is situated in two layers – an upper layer and a lower layer. The thickness of the upper layer varies from 2.5 to 11 meters and is about 7.6 meters on average, whereas the thickness of the lower layer, which is lower grade, varies from 2 to 9 meters and is about 6.1 meters on average. The phosphate is of a low organic type, and as such it is suitable for phosphoric acid production. The mining is executed based on inter-layers and quality thereof. Inter-layers have 3 quality categories: Grade I (highest grade) > 30% P2O5, Grade II- 24%-30% P2O5 and Grade III- 15%-24% P2O5. Structurally, the Haikou deposit is moderately complex, which requires precision mining that is accomplished through use of relatively small mining equipment.
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The mining in the Haikou Mine is via open mining using conventional methods by means of drilling and blasting, hydraulic excavators, mining trucks and tractors for mining phosphates.
Mining is undertaken in three stages. In the first stage, mining of the upper ground level is stripped and stored or spread out over mined areas for reclamation purposes. In the second stage, drilling, blasting, and stripping of the upper overburden level is executed (consisting of hard siliceous dolomite). In the third stage, mining of phosphate is performed by drilling and blasting every inter-layer separately. A layer of interburden with an average thickness of 11 meters is present between the upper and lower phosphate layers and consists of interbedded phosphate (non-economic) bearing sandy dolomite, which is also drilled, blasted and removed. The lower phosphate layer is underlain by dolomite which is not mined. The phosphate layers are mined based on three quality categories:
| • | Grade I (highest grade) > 30% P2O5 - This category of phosphate is weathered and most of the carbonates have been dissolved. It is soft and easy to mine, requiring no blasting. However, its occurrence is in small patches, requiring highly selective mining. This category comprises less than 10% of the Haikou deposit and is fed directly to the scrubbing plant for processing. |
| • | Grade II 24%-30% P2O5 – Harder phosphate material requiring blasting and crushing prior to further processing at the scrubbing plant. This category comprises around 25% of the Haikou deposit. |
| • | Grade III 15%-24% P2O5 – This is the hardest rock and requires blasting, crushing, and grinding before further processing. |
Based on the patches' appearance of the medium and high-grade phosphate, the mining is performed through use of small mining equipment, trucks with a capacity of 40 tonnes and excavators with a bucket capacity of 3 to 6 cubic meters.
Phosphate ore is trucked to on-site processing facilities which include two beneficiation plants (a flotation plant and a scrubbing plant) where it is processed to produce phosphate concentrate at a minimum grade of 28.5% P2O5. The concentrate is then transported to the on-site chemical processing plant (“3 Circle” or “3C”) for further processing into saleable products including fertilizers and potashphosphoric acids. The 3C chemical plant is part of YPH. Additional sources of phosphate ore come from Rotemon-site surface stockpiles and small amounts of phosphate rock purchased from third parties.
The flotation plant processes low to medium grade phosphate ore by crushing, grinding and flotation and produces phosphate concentrate which is pumped as a slurry to the Dead Sea3C chemical plant via a 6.5 kilometer pipeline. In 2021, flotation processing capacity at Haikou increased from 2.3 to 3.4 million tonnes per year, resulting in an increase in concentrate production from 1.6 to 2.2 million tonnes per year.
The scrubbing plant processes medium to high grade phosphate ore by removing the finest (lower grade) fraction. The concentrate produced by the scrubbing plant is transported to the grinding plant at the 3C chemical plant for size reduction prior to further processing. In 2023, a total of 503 thousand tonnes of concentrate were produced by the scrubbing plant. In addition, small amounts (36 thousand tonnes in 2023) of high-grade phosphate ore are not shippedtransported to the 3C chemical plant for dry grinding and use in production of triple super phosphate (TSP) fertilizer.
The 3C chemical plant includes four sulphuric acid factories, three green phosphoric acid factories, one factory for manufacture of technical grade white phosphoric acid, one factory for manufacture of food grade white phosphoric acid and an additional six fertilizer factories. These factories are powered by electricity generated from the Haifa port since it has no infrastructure for loading bulk products and the cost of overland transport is more expensive than transport to Ashdod.
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There are two tailings storage facilities (TSFs): the factoriesFlotation TSF and the mines to its customersGypsum TSF. The Flotation TSF receives tailings from flotation and scrubbing plants while the port. Ore is takenGypsum TSF receives gypsum tailings produced by 25-ton road haulage trucks and a conveyor belt from the Cabanasas and Vilafruns mines to3C chemical plant. In 2022, the Suria and Sallent plants, respectively. AfterCompany completed the processing is completed, various quantitiesconstruction of potash and different types of salt are produced. The final product is transferred directly to the customer by truck or through the port.
The facilities of the port of Barcelona are managed by ICL Iberia’s subsidiary Tramer and comprise an area of 13 thousand square meters divided into three zones. As part of the plan for increasing ICL Iberia's (IBP) production capacity, an upgradeHaikou site is being made of the logistical infrastructure at the mine (entrance ramps into the mine), the factories and the Company's berth in the Barcelona port, in such a manner that will permit production, transport and export of about 2.3 million tons of potash and salt per year.
Production
The following table sets forth the amount of total mine production of phosphate ore at the Haikoumine (and the relevant grade) supplied to the beneficiation plants, for the three years ended December 31, 2023, 2022 and 2021:
| Year Ended December 31 | |||
| 2023 | 2022 | 2021 | |
| Tonnes mined (kt) | 3,646 | 3,223 | 2,656 |
Grade (% P2O5 before/after beneficiation) | 22% / 28% | 22% / 28% | 21% / 28% |
| (1) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
The following table sets forththe approximate amounts of product produced after processing by the operations at the Haikou mine,for the three years ended December 31, 2023, 2022 and 2021:
| Product Produced after processing at Haikou (kt) | |||
| 2023 | 2022 | 2021 | |
| Phosphate Rock * | 2,657 | 2,497 | 2,194 |
| Green Phosphoric Acid | 682 | 676 | 673 |
| Fertilizers | 609 | 611 | 612 |
| White Phosphoric Acid | 95 | 94 | 83 |
| Specialty Fertilizers | 113 | 92 | 76 |
*Figures relate to phosphate concentrate produced by the flotation and scrubbing plants for further processing at the 3C chemical plant.
Property Value
As of December 31, 2023, the overall book value of the property, plant and equipment of Haikou amounted to about $292 million.
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Mineral Resource Estimate
In estimating the cut-off grade, resources and reserves, an average of the previous three years’ market prices were used: $402 per tonne for green phosphoric acid (MGA), $1,258 per tonne for white phosphoric acid (WPA), $1,166 per tonne for MKP, $326 per tonne for GTSP, $380 per tonne for NPS, $346 per tonne for MAP 55% and $687 per tonne for MAP 73%. In addition, operating costs and an average of the previous three years’ currency exchange rates of 6.73 RMB per dollar as of December 31, 2023, is used for the assessment of economic potential.
YPH Haikou – Summary of Phosphate Mineral Resources at the end of the fiscal year ended December 31, 2023.
| Measured | Indicated | Measured + Indicated | Inferred | Cut-off Grades | Metallurgical Recovery | |||||
| Mining Area | Mt | (P2O5) | Mt | (P2O5) | Mt | (P2O5) | Mt | (P2O5) | (P2O5) | |
| Block 1 and 2 | 0.7 | 23.0% | 0.02 | 22.4% | 0.7 | 23.0% | - | - | 15% | 89.3% |
| Block 3 | 1.6 | 22.0% | 2.2 | 24.1% | 3.8 | 23.2% | - | - | ||
| Block 4 | 0.7 | 22.4% | 0.2 | 23.1% | 0.9 | 22.5% | 0.2 | 20.0% | ||
| Total | 3.0 | 22.3% | 2.3 | 24.0% | 5.3 | 23.0% | 0.2 | 20.0% | ||
| (1) | Mineral Resources are reported on a dry in-situ basis and are exclusive of Mineral Reserves. |
| (2) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (3) | Mineral Resources for Haikou are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results (2021). |
| (4) | The reported Mineral Resource estimate was constrained by limiting polygons for the purpose of establishing reasonable prospects of economic extraction based on potential mining, metallurgical and processing grade parameters identified by mining, metallurgical and processing studies performed to date on the project. A minimum cut-off grade of 15% P2O5 has been applied for reporting purposes. |
As of December 31, 2023, Haikou had 5.46 Mt of phosphate resources which is unchanged since December 31, 2022, as there have been no upgrades of resources to reserves and no further exploration drilling. The Mineral Resources estimate for Haikou is based on factors related to geological and grade models and the prospects of eventual economic extraction. For further discussion of the material assumptions relied upon, please refer to Section 11.6 of the Technical Report Summary filed as an exhibit to the 2021 Annual Report.
Mineral Reserve Estimate
YPH has 50.9 million tonnes (after applying mining losses of 2.8% and mining dilution of 1.9%) of Proven Reserves of phosphate rock, located in 4 separated blocks (blocks 1-4). The annual average mining rate is around 2.5 million tonnes. The Proven Reserves are sufficient for a large networkmine life of conveyor load-out systems which carry potash, polyhalite and salt. The majority of this infrastructure will remain after cessation of potash production. Infrastructure specific to potash only will be recovered if economical.approximately 20 years.
The rail load‑out products are transported on an ICL UK‑owned rail line which extends approximately eight kilometers fromaverage quality of phosphate is around 21.8% P2O5 and is divided into 3 grades: Grade I (highest grade) > 30% P2O5, Grade II- 24-30% P2O5 and Grade III- 15-24% P2O5. Phosphate is beneficiated in the mine entrance to a junction withscrubbing facility, in the national rail network,flotation plant, or in the grinding facility. The quantities and from there the products continue to Teesport, Middlesbrough, via the Network Rail Company, the owner and operatorgrades of the main rail line.
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In determining these reserves, a cut-off grade of 15% P2O5 was applied in accordance with the flotation plant capability to produce usable concentrate rock (28.5% P2O5), which is the average quality required to produce phosphoric acid in the Yunnan region. In practice, the Haikou mine can process and use all the phosphate that exists in the deposit. The boundaries of the phosphate layers are physically well defined and all phosphate rock above the cut-off grade is mined.
The reported Mineral Reserve estimate was constrained by pit designs and includes diluting materials and allowances for losses. All Proven Reserves were derived from the Measured Mineral Resource classification, and all Probable Reserves were derived from the Indicated Mineral Resource classification only. The results of the Mineral Reserve estimate are supported by the outcomes of an economic analysis completed in support of the operational business plan.
Based on the Company's knowledge, we have all the government approvals and permits that are necessary for the reserves in China.
YPH JV includesHaikou – Summary of Phosphate Mineral Reserves, at the end of the fiscal year ended December 31, 2023.
| Category | Low Organic Phosphate (Mt) | Average Grade (P2O5) | Cut-off Grades (P2O5) | Metallurgical Recovery (P2O5) | |
| Block 1+ 2 | Proven | 5.7 | 21.9% | 15% | 89.3% |
| Probable | - | - | |||
| Block 3 | Proven | 34.9 | 22.0% | ||
| Probable | - | - | |||
| Block 4 | Proven | 10.3 | 21.0% | ||
| Probable | - | - | |||
| Total | Proven | 50.9 | 21.8% | ||
| Probable | - | - |
| (1) | All figures are rounded to reflect the relative accuracy of the estimate, and numbers may not sum due to rounding. |
| (2) | Mineral Reserves reported on a dry basis delivered to the processing plant primary crusher. |
| (3) | Mineral Reserves for Haikou are classified in accordance with the Pan European Reserves and Resources Reporting Committee (PERC) Standard for Reporting of Exploration Results (2021). |
As of December 31, 2023, Haikou had 50.9 Mt of phosphate reserves compared to 54.5 Mt as of December 31, 2022, a decrease of 7%, due to depletion from mining. Assumptions regarding the technical parameter analysis, forecasted product prices, production costs, permitting decisions, or other factors may positively or negatively affect the reserves estimates.
Logistics
YPH holds the Haikou Mine,mine, beneficiation plants, the 3C which is a group of factories for production of various types of fertilizers located close to the Haikou mine,chemical plant and two plants for production of downstream products – one located close to the Haikou mine and the fertilizers factory and the other situated proximatein proximity to the Kunming airport.
Most of the transport of the raw materials from the Haikou mine to the 3C factorieschemical plant is executed via pipeline (slurry), whereas a small part of the raw rock is transported by trucks.trucks.
Most of the outputproducts are sold to the local market isin northern China and are transported from the 3C chemical plant directly to the customers, in North China by train as well as throughor marine shipment, mainly from two exit ports, (BeihaiQinZhou port and Fangchengang). These portsFangchengang, while a small part is transported to customers in the Yunnan region. Fangcheng port and Zhanjiang port are also used for import of importing sulphur,, in the amount of 600approximately 626 thousand tonnes per year. A small part of the output sold is transported by trucksyear, subject to customers (owned by the customers) in the Yunnan region.YPH’s demand and existing sources.
Not Applicable.
Item 5 – OPERATINGFINANCIAL RESULTS AND FINANCIAL REVIEW AND PROSPECTSBUSINESS OVERVIEW
| A. | OPERATING RESULTS |
The information included in the discussion and analysis below provides details on the information for the years ended December 31, 2023 and December 31, 2022. Certain Information related to the year ended December 31, 2021 has not been included. It can be found in the Company's filing of the form 20-F for the year ended December 31, 2022.
Principal Factors Affecting Ouraffecting our Results of Operations and Financial Condition
The following table sets forth the total Government Takes (GT) the Company had paid to the State of Israel in 2023, 2022 and 2021:
| Year Ended December 31, | $ millions | NIS millions |
| 2023 | 652 | 2,399 |
| 2022 | 1,488 | 4,988 |
| 2021 | 507 | 1,636 |
The GT include, among others, royalties, leases, dividend withholding tax, payroll taxes and social security and payments relating to taxes, including advances regarding the Surplus Profit Levy.
In 20172023 and 2016, approximately 53%2022, about 4% and 54%3%, respectively, of our total sales revenue wasderived from sales in Israel. In 2023 and 2022, about 52% and 44%, respectively, of our total sales derived from production activities taking place outside Israel and approximately 8% and 6%, respectively, of the cost of sales of products produced outside Israel was attributable to raw materials supplied from Israel. There is nonot a single customer on which we are materially dependent, or a single customer that accounted for more than 10% of the Company’s total sales revenue in 2017.2023.
Trends Affecting Our Operating Expenses
Energy expenses accounted for approximately 7%6% and 6%7% of our total operating costs in 20172023 and 2016, respectively. Electricity2022, respectively, a year-over-year decrease of approximately 7%. The decrease was mainly related to several expenses: electricity expenses in 20172023 and 20162022 amounted to $190$162 million and $167$195 million, respectively, comprising 56%40% and 53%45%, respectively, of theour total energy expenses. Natural gas expenses in 20172023 and 20162022 amounted to $87$181 million and $77$167 million, respectively, comprising 25%45% and 24%39%, respectively, of theour total energy expenses. Oil and oil products expenses in 20172023 and 20162022 amounted to $16$21 million and $15$22 million, respectively, comprisingeach accounting for 5% of theour total energy expenses in both 2017 and 2016. Energy costs increased in 2017 by approximately 9% compared to 2016. The increase is mainly attributable to increases in electricity and gas expenses in Israel, and higher gas prices in Europe.expenses.
ICL is one of the largest natural gas consumers in Israel and is taking measureshas taken a strategic decision to increase the use of natural gas to power its largest production plants in itsIsrael. This transition of ICL’s facilities in order to natural gas from other fossil fuels has significantly reduce emissions ofreduced air pollutants in the areaareas surrounding itsICL facilities, improvereduced the GHG emissions, improved the quality of the output reduceand reduced maintenance expensesexpenses. For further information, including details of the specific natural gas purchasing agreements undertaken by the Company, see Note 18 to our Audited Financial Statements and lead to a significant monetary savings due to“Item 4 - Information on the transition from the use of more expensive fuels.Company— B. Business Overview”.
Marine transportation expenses in 20172023 and 2016 were2022 amounted to approximately 6%$269 million and 5%$373 million, respectively, for each year comprising 4% of our total operating costs, respectively, and amountedcosts. The decrease is primarily attributed to approximately $306 million and $286 million, respectively. In 2017, bulk transport shipping prices continued their upward trend compared to 2016. The monthly average marine transportation price index (Baltic Dry Index – “BDI”) for 2017 was 70% higher than the monthly average index for 2016. The increasea decrease in marine transportation expenses is primarily attributable to the increase in marine transportation prices compared to last year, resulting from an increase in fuel prices, and was partly offset by lower quantities of potash products and phosphate rock sold in 2017.costs.
Our financial statements are presented in U.S.US dollars. Most of our sales are in U.S.US dollars, even though aand the remaining portion of our sales is mainly in other currencies, mainly euros. Part of our operating expenses in Israel are denominated in NISIsraeli shekels and, consequently, devaluation of the average NISIsraeli shekel exchange rate against the U.S.US dollar has a positive impact on our profitability, while appreciation has the opposite effect. Devaluation of the average exchange rate of the euro against the U.S.US dollar has a negative impact on our profitability, while appreciation has the opposite impact. On the other hand, devaluation of the euro against the U.S.US dollar improves the competitive ability of our subsidiaries whose functional currency is the euro, compared with competitors whose functional currency is the U.S.US dollar. In 2017,2023, the Company was negativelyCompany’s operational results were positively impacted mainly by the devaluationdepreciation of the dollar, mainlyIsraeli shekel against the shekel,US dollar, partially offset by the appreciation of the euro and the British pound against the US Dollar, as well as the depreciation of the Chinese Yuan against the US dollar. For further information, see “Item 5 – Financial Results and Business Overview— A. Operating Results” and "Item 11 - Quantitative and Qualitative Disclosures about $28 million compared to 2016.
Market Risk".
We hedge part of our exposure to the risks described above, which include exposure to sales and operating expenses that are not denominated in our functional currency, mainlycurrency. The main exposure derives from operating expenses denominated in NIS and other currencies that are not the functional currency of our subsidiaries, and exposure to marine transportation prices and energy prices. Since all of these hedging transactions are treated as economic (non‑accounting) hedges, they are not reflected in our operating costs but instead are recorded as finance income or expenses in our statements of income. Our management determines the extent of our hedging activities based on their estimation of our sales and operating expenses, as well as their expectations of the developments in the markets in which we operate. See “Item 11 - Quantitative and Qualitative Disclosures about Market Risk— Risk Management”Risk”.
Trends affecting our segments
2023 was characterized by uncertainty and complex challenges, with commodity and fertilizer markets highlighting the interconnectedness of geopolitical, economic, and climate risks.
High inflation dominated the global economic landscape in 2023, while initially high, it gradually moderated throughout the year given central bank actions (interest rate hikes) and lower commodity prices. This contractionary monetary policy led to global economic slowdown impacting both developed and emerging economies. While emerging markets generally outperformed developed ones, both markets face challenges.
There is a prevailing belief that both the Federal Reserve and the European Central Bank have concluded their policy rate increases. However, interest rate reductions are not anticipated until mid-2024.
GDP growth has been stronger than expected in 2023 but is now moderating as a result of tighter financial conditions, weak trade growth and lower business and consumer confidence.
While the first half of 2023 saw signs of improvement in global supply chains, the latter half witnessed a concerning resurgence of bottlenecks due to several factors including drought-related delays in the Panama Canal and attacks on shipping in the Red Sea which has impacted traffic flow through the Suez Canal. These factors highlight the continued fragility of global supply chains which are susceptible to unforeseen events and geopolitical tensions. The combined impact of these disruptions could lead to increased shipping costs, delays, product shortages and further inflationary pressures.
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2023 also saw a stabilization in downstream crop markets from the more volatile price movements that have characterized the past two years. Farmers affordability improved given lower fertilizer and energy prices, but challenges remain due to various other factors including high interest rates impacting borrowing costs, extreme weather conditions and government policies.
Global unrest and ongoing conflicts in Eastern Europe and escalating tensions in the Middle East, including the war in Gaza are causing some supply chain disruptions and price fluctuations for freight and various commodities, impacting the global landscape. In October 2023, the Israeli government declared a state of war in response to an attack on civilians at its southern border. Subsequently, additional attacks were launched towards northern Israel. For further information regarding the security situation in Israel, see “Item 3 - Key Information— D. Risk Factors”.
Trends Affecting ICL Specialty Solutions Segmentaffecting Industrial Products segment
The Specialty Solutions businesses are comprisedoperations of a large variety of products sold in many different markets and to different customers. There is therefore no one specific trend that impacts the whole segment. However, most of the specialty business lines experienced growth in 2017 in line with the trends in the global economy.
Below are the trends of the business lines main activities:
Flame retardants: 2023 was characterized by low demand across all applications, resulting from soft demand and high stock levels in end markets including the electronics, building & construction, automotive and textile industries.
Demand for ICL’s phosphorus-based flame retardants: The trend was also soft due to the global economic situation. In addition, Chinese capacity reached above pre-pandemic levels and contributed to lower price levels. In 2023, ICL, LXS and PCC jointly filed an anti-dumping complaint with the European Commission against imports of pressure exertedtris(2-chloro-1-methylethyl) phosphate (TCPP) from China.
Pressure by “green” organizations in the area ofdedicated to environmental protection to reduce the use of bromine-based flame retardants is continuing. On the other hand,continues. However, development and commercialization of new sustainable polymeric andor reactive bromine-based flame retardants, along with regulationnew fire safety regulations in additionaldeveloping countries, as well as new growing global trends, are serving to increase the use of these new products. Following
Industrial solutions: Elemental bromine - 2023 was characterized by soft demand for elemental bromine especially for flame retardants and agro markets due to global economic dynamics. Agro-Pharma - During 2023, low demand was experienced in agro and pharma markets due to a slowdowndecrease in inventory in end markets.Industrial Services - Robust demand was recorded for Mercury emissions control, supported by a shortage of natural gas which resulted in numerous power plants in the US and Europe reverting to coal as their primary source of energy. High demand for productsfunctional fluids was also experienced. Clear brine fluids - The Industrial Products segment experienced higher year-over-year demand due to its advantage of excess capacity and storage capability in the electronics and construction industries since 2013, during 2016 and in 2017, there was stabilization in the demand for products used in printed circuit boards and other electronic applications. In addition, demand increases in the useGulf of flame retardants in electronic applicationsMexico for the automotive industry, resulted in higher prices. Prices of bromine compounds were also supported by an increase in elemental bromine prices in China.
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Specialty minerals: Magnesia and calcium products- 2023 was characterized by stable demand year-over-year and higher competition in industrial applications which are relatively low-grade applications. Solid MgCl2 -There was a moderate increase in the use of MgCl2 as a prime deicer. 2023 was characterized by higher sales to the retail market year-over-year. Pure and packed KCl - From the end of 2022, the segment has experienced excess supplyin the KCl market which has significantly increased competition and reduced sales year-over-year as a result of improvingstable demand in pure KCI for food and pharma.
Trends affecting the Potash segment
In 2023, average prices of soybean, corn and wheat decreased by 9.2%, 19.1% and 18.3%, respectively, while rice prices increased by 1.9%. Much improved crop production in 2023 weighed on grain prices in key growing areas. In Europe, renewed exports of low-cost Ukrainian wheat forced regional prices lower, while in the Americas large harvests in the US (corn) and Brazil (soy) eased stock concerns. As such, fertilizer affordability has been eroded over the past six to twelve months.
Nevertheless, despite these factors, the WASDE report, published in January 2024, still indicates a decrease in the anticipated ratio of the global inventories of grains to annual consumption to 27.7% for the 2023/24 agriculture year, compared to 28.1% and 28.4% for the previous two agriculture years respectively. This suggests that any disruption to production would likely have a significant supportive impact on prices.
Global potash market - average prices and imports:
| Average prices | 2023 | 2022 | VS 2022 | |
| Granular potash – Brazil | CFR spot ($ per tonne) | 392 | 857 | (54.3)% |
| Granular potash – Northwest Europe | CIF spot/contract (€ per tonne) | 496 | 793 | (37.5)% |
| Standard potash – Southeast Asia | CFR spot ($ per tonne) | 381 | 785 | (51.5)% |
| Potash imports | ||||
| To Brazil | million tonnes | 13.2 | 11.1 | 18.9% |
| To China | million tonnes | 11.7 | 7.9 | 48.1% |
| To India | million tonnes | 2.8 | 2.3 | 21.7% |
Sources: CRU (Fertilizer Week Historical Price: January 2024), SIACESP (Brazil), World Shipping Agenciamentos (WSA), FAI, Chinese customs data.
Potash prices decreased by 35-55% year-over-year across North and South America, Asia, and Europe. The trend was primarily driven by a recovery of Russian and Belarusian shipments to pre-conflict levels, as exporters in both countries found ways to navigate financial and logistical challenges that impacted their operations in 2022. However, they continue to encounter difficulties in accessing certain markets and customers, contributing to ongoing volatility.
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Furthermore, downward pressure was influenced by “just-in-time” purchasing patterns. Losses incurred from inventory purchased at significantly higher prices in the latter half of 2022, coupled with rising interest rates and improvements in supply chain conditions, prompted a more cautious purchasing approach in 2023. Consequently, distributors have postponed and limited purchases wherever feasible. Affordability has also played a role, with lower crop prices easing inflationary pressure on fertilizers prices.
Additionally, the delay in finalizing annual contracts in 2023 compelled suppliers to focus deliveries on Latin America during the first quarter, dampening market sentiment.
In contract markets we observed a comparable trend, with the Indian contract price down 46% from $590 in 2022 to $319/t CFR in 2023, but not before a prior six-month agreement in April at $422/t was agreed and then discarded following news of a Chinese agreement in June at $307/t CFR (-48% year-over-year).
Magnesium Trends
In 2023, demand in the agrochemicals markets.
Trends affecting Phosphate Solutions segment
Despite a positive beginning of 2023, weaker demand and excess supply towards the end of the first quarter dragged phosphate prices down through June. Later in Class B foam. The oil additives (P2S5) business also increased comparedthe year, markets began to recover, as better affordability and supportive weather spurred demand across the priorAmericas and part of Asia. Although India decreased phosphate subsidies, China tightened its export restrictions, and, as a result, phosphate prices remained firm.
In the US, DAP FOB NOLA prices decreased at the beginning of the year due to strong demandprolonged cold and wet weather. Although there was a short-lived improvement in April, as hesitant buyers covered their shortage of key customers. In December 2017, ICL announcedsupply, prices continued downward due to excess availability and limited demand. Around mid-year, the saletrend reversed as distributors restocked after what turned out to be a record planting season for corn, which led to increased prices. Prices remained firm until the end of the fire safety and oil additives (P2S5) businesses to SK Capital for approximately $1 billion. The sale is expected to closeyear despite the easing of Countervailing Duties (CVDs) against OCP Group in October.
In Brazil, MAP prices came under sustained pressure in the first half of 2018, subject to customary closing conditionsthe year, as lower crop prices prompted a sense of caution, and regulatory approvals. For additional information on divestitures currently in progress, see “Item 3 - Key Information— A. Selected Financial Data”.
In India, lower DAP prices year-over-year and attractive distribution margins (>$100/t) for most of 2023, led importers to purchase 6.5-7.0Mt of DAP. Although this is in line with the major part oftotal for 2022, and well above 2021, volumes slowed in the fourth quarter due to increased demandthe government’s decision to moderate DAP subsidies by a third in October hoping to force the DAP CFR India prices down from $600/t CFR. However, while the moderation of the subsidies led to a decrease in distribution margins and limited supply. Atvolumes, prices remained stable at $595/t CFR by the end of November, prices CFR China passed the $200 per tonne mark, but from that pointyear.
The Indian phosphoric acid price ranged between $850/t and $1,050/t P2O5 during 2023. Contracts are usually negotiated on a quarterly basis and tend to reflect developments in time prices startedDAP/MAP prices. Prices for the first quarter of 2024 are still under negotiation.
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Global phosphate commodities market - average prices:
| Average prices | $ per tonne | 2023 | 2022 | VS 2022 |
| DAP | CFR India Spot | 569 | 876 | (35)% |
| TSP | CFR Brazil Spot | 434 | 802 | (46)% |
| SSP | CPT Brazil inland 18-20% P2O5 Spot | 290 | 436 | (33)% |
| Sulphur | Bulk FOB Adnoc monthly contract | 104 | 280 | (63)% |
Source: CRU (Fertilizer Week Historical Prices, January 2024).
Trends Affecting the Growing Solutions Segment
The Growing Solutions segment operates within the agriculture and Turf & Ornamental markets. Traditional commodity producers continue to declineexpand into the specialty fertilizers markets, offering specialized, higher value products. The acquisition and merger of small specialty fertilizer players by larger industry players represent another prominent global trend.
Specialty Agriculture Markets:
The Specialty agriculture markets include all open field crops (rice, corn, potatoes, vegetables, fruits etc.), orchards, and greenhouses.
Our offerings for the specialty agriculture sector include seven main product groups: (1) soluble fertilizers, which include water-soluble straights (such as MKP, MAP and PeKacid), and water‑soluble NPK (WSNPK); (2) controlled release fertilizers (CRF); (3) liquid NPKs; (4) seed treatment; (5) biostimulants; (6) adjuvants; and (7) soil conditioners.
Specialty agriculture markets are constantly growing, driven by global population growth, lack of arable land, and regulations. New regulations, whether at the beginninglocal or national level, mandate limitations on the amounts of February 2018 decreasedfertilizers applied, consequently driving the adoption of efficient fertilizer application practices. Examples of such regulation can be found in China’s restrictions on nitrogen use and the implementation of measures to control nitrogen leaching in several European countries. Growth in demand is significant in China, India, and Brazil, while in Europe, growth is more moderate. CRF growth in Europe is anticipated to be robust, driven by an average of $60-$70 per tonne.the Green Deal and Farm to Fork programs.
The competitive landscape in the productionsoluble fertilizer market is continually evolving, with some commodity-oriented players bolstering their positions in specialty fertilizer markets. There has been a substantial increase in the capacity of WSNPK blending in China, encouraged by a government policy to improve fertilizer application efficiency and reduce total fertilizer consumption. The utilization of water-soluble fertilizers is also on the Moroccan producer OCP and Saudi Arabian producer Ma’aden, while Mosaic has announcedrise in India, attributed to the idlingincreasing adoption of an old plant.drip irrigation systems. WSNPK is seen as more efficient than traditional commodity fertilizers. Concurrently, compound NPK producers are seeking new avenues for growth, which is driving the expansion of WSNPK capacity.
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CRF markets are expanding globally, with significant growth observed in China, where both market demand and TSP) exports from China, which decreasedproduction capacity have notably increased, primarily led by 18%companies like Kingenta and Moith. Additionally, the US market is experiencing growth although the main capacity increase is concentrated in 2016lower quality CRFs produced by companies such as Nutrien and Pursell. The CRF market in Brazil is experiencing rapid growth driven by the unique climate and poor soil quality in the region. Although trials have demonstrated the economic and environmental advantages of using CRF, broader adoption among growers is impeded by its price premium compared to about 9.5traditional fertilizers.
In 2022, ICL signed a long-term agreement with India Potash Limited (IPL) to supply Polysulphate in India through 2026, with an option for renewal of the agreement. The five-year term encompasses a total volume of one million tonnes, increasedgradually increasing each year. Shipments set at a minimum of 25,000 tonnes each will be equally distributed across the calendar year, with prices and payment terms to 10.1 million tonnes in 2017, about 11% over 2016, but still lower than the recordbe fixed between IPL and ICL from time to time. The availability of 11.6 million tonnes exported in 2015. Continued pressure by Chinese environmental authorities is resulting in several plant closures and additional expenses, whichPolysulphate is expected to limit further growth in exports,help boost the Government of India’s organic agriculture program.
Turf and possibly result in some decline overOrnamental Horticulture
Turf and Landscape
The segment’s Turf and Landscape market business serves the coming years.professional turf (golf and sports fields) and the landscape and lawn markets.
During 2017, imports of phosphate fertilizers (DAP, MAP, TSP and SSP) into Brazil reached 7.26 million tonnes, constituting2023, the segment experienced stable demand in the professional turf market compared to 2022 across most product categories, supported by the professional sport & golf sector. This was attributed to an increase in the number of 10.4%, compared with importsgolfers throughout the year, resulting in 2016.heightened maintenance activities and new applications, offset by dealers' increased hesitancy to build inventories for the 2024 spring season, due to declining specialty fertilizer pricing.
Ornamental Horticulture
The Ornamental Horticulture market includes container nursery growers, potted plants, and bedding plants (greenhouses).
During 2023, the ornamental horticulture business encountered a significant decline in demand, particularly in Northern Europe and North America, driven primarily by inflation. Reduced consumer sales of DAP) were lowgreen goods and fewer visits to garden centers resulted in diminished potting activities. Additionally, growers in Northwest Europe scaled back plant cultivation in greenhouses due to soaring energy costs. In emerging markets, market demand remained stable. However, due to high inventories of inputs at the start of the year and increasing prices. Accordingthe conclusion of the potting season, dealers began to reduce their inventories in the latter half of 2023, consequently impacting market demand.
FertilizerpluS
In 2023, demand for FertilizerpluS products, mainly for Polysulphate standard and Polysulphate granular, experienced a decrease in contrast to 2022, due to the FAI (Fertilizer Association of India), DAP imports during 2017 decreased by 6.3%overall downward trend in commodity prices, mainly potash, as well as general market tendency for “just-in-time” purchasing practices. Conversely, downstream FertilizerpluS products such as Polysulphate Premium and PotashpluS experienced increased demand and showed strong performance compared to 4 million tonnes. However, domestic DAP production increased by 9.7%, to 4.8 million tonnes, using imported rock and acid.
Expected Expenses for Equity and Cash Compensation Plans
Based on the existing grants under the amended 2014 Equity Compensation Plan, the expected expensetotal expenses for the periods ended December 31, 2018,2024, December 31, 20192025, and December 31, 2020 is2026, are approximately $7.7$4 million, $2.8$1 million, and $0.7 million,$100 thousand, respectively. For further information, see Note 19 to our Audited Financial Statements.
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Results of Operations
We have elected to omit discussion on the earliest of the main trendsthree years covered by the consolidated financial statements presented. Refer to "Item 5 - Financial Results and Business Overview" located in its businesses.
Set forth below are our results of operations for the years ended December 31, 20172023 and 2016.2022.
| For the Years Ended December 31, | % Increase (Decrease) | ||
| 2023 | 2022 | ||
| $ millions | $ millions | ||
| Sales | 7,536 | 10,015 | (25)% |
| Cost of sales | 4,865 | 4,983 | (2)% |
| Gross profit | 2,671 | 5,032 | (47)% |
| Selling, transport and marketing expenses | 1,093 | 1,181 | (7)% |
| General and administrative expenses | 260 | 291 | (11)% |
| Research and development expenses | 71 | 68 | 4% |
| Other expenses | 128 | 30 | 327% |
| Other income | (22) | (54) | (59)% |
| Operating income | 1,141 | 3,516 | (68)% |
| Finance expenses | 259 | 327 | (21)% |
| Finance income | (91) | (214) | (57)% |
| Finance expenses, net | 168 | 113 | 49% |
| Share in earnings of equity-accounted investees | 1 | 1 | - |
| Income before taxes on income | 974 | 3,404 | (71)% |
| Taxes on income | 287 | 1,185 | (76)% |
| Net income | 687 | 2,219 | (69)% |
| Net income attributable to the non-controlling interests | 40 | 60 | (33)% |
| Net income attributable to the shareholders of the Company | 647 | 2,159 | (70)% |
| Earnings per share attributable to the shareholders of the Company: | |||
| Basic earnings per share (in dollars) | 0.50 | 1.68 | (70)% |
| Diluted earnings per share (in dollars) | 0.50 | 1.67 | (70)% |
| For the Years Ended December 31, | % Increase (Decrease) | ||
| 2017 | 2016 | ||
| $ millions | $ millions | ||
| Sales | 5,418 | 5,363 | 1% |
| Cost of sales | 3,746 | 3,703 | 1% |
| Gross profit | 1,672 | 1,660 | 1% |
| Selling, transport and marketing expenses | 746 | 722 | 3% |
| General and administrative expenses | 261 | 321 | (19)% |
| Research and development expenses | 55 | 73 | (25)% |
| Other expenses | 90 | 618 | (85)% |
| Other income | (109) | (71) | 54% |
| Operating income (loss) | 629 | (3) | - |
| Finance expenses, net | 124 | 132 | (6)% |
| Share in earnings of equity-accounted investees | - | 18 | - |
| Income (loss) before income taxes | 505 | (117) | - |
Provision for income taxes | 158 | 55 | 187% |
| Net income (loss) | 347 | (172) | - |
| Net income (loss) attributable to the shareholders of the Company | 364 | (122) | - |
| Earnings (loss) per share attributable to the shareholders of the Company: | |||
| Basic earnings (loss) per share (in dollars) | 0.29 | (0.10) | - |
| Diluted earnings (loss) per share (in dollars) | 0.29 | (0.10) | - |
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Results of operations forOperations For the year 2017Year 2023
| Sales | Expenses | Operating income | ||
| $ millions | ||||
 | ||
 | ||
| ||
| YTD 2022 figures | 10,015 | (6,499) | 3,516 | |
| Total adjustments YTD 2022* | - | (7) | (7) | |
| Adjusted YTD 2022 figures | 10,015 | (6,506) | 3,509 | |
| Quantity | (277) | 87 | (190) |  |
| Price | (2,202) | - | (2,202) | |
| Exchange rates | - | 59 | 59 |  |
| Raw materials | - | 136 | 136 | |
| Energy | - | (3) | (3) | |
| Transportation | - | 63 | 63 | |
| Operating and other expenses | - | (154) | (154) | |
| Adjusted YTD 2023 figures | 7,536 | (6,318) | 1,218 | |
| Total adjustments YTD 2023* | - | (77) | (77) | |
| YTD 2023 figures | 7,536 | (6,395) | 1,141 |
* See "Adjustments to reported operating and net income (non-GAAP)" above.
| - |
| - | Cost of sales – Cost of sales decreased by $118 million compared to 2022. The decrease was |
| - |
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| - | General and administrative – Expenses decreased by $31 million compared to 2022, mainly due to lower labor costs and the depreciation of the average exchange rate of the Israeli shekel against the US dollar. |
| - | Research and Development – Expenses increased by $3 million compared to 2022, mainly due to higher labor costs expenses, partially offset by the depreciation of the average exchange rate of the Israeli shekel against the US dollar. |
| - | Other expenses, net – Other expenses, net, increased by $130 million compared to 2022. The increase was primarily due to write-off of assets and provisions for early retirement related to restructuring at certain sites, as well as charges relating to the security situation in Israel. |
Below is a geographical breakdown of our sales by customer location:
| Year Ended December 31, | ||
| 2023 | 2022 | |
| $ millions | $ millions | |
| Europe | 2,332 | 2,809 |
| Asia | 1,744 | 2,743 |
| South America | 1,665 | 2,315 |
| North America | 1,351 | 1,577 |
| Rest of the world | 444 | 571 |
| Total | 7,536 | 10,015 |
| Year Ended December 31, | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Europe | 1,918 | 1,863 |
| Asia | 1,342 | 1,275 |
| North America | 1,175 | 1,141 |
| South America | 666 | 588 |
| Rest of the world | 317 | 496 |
| Total | 5,418 | 5,363 |
| - | Europe – The decrease in sales was primarily due to lower selling prices of potash, specialty agriculture and FetrilizerpluS products and phosphate fertilizers, as well as lower selling prices and sales volumes of bromine and phosphorous-based flame retardants, phosphate-based industrial solutions, white phosphoric acid (WPA) and salts, together with lower sales volumes of turf and ornamental products, bromine-based industrial solutions, specialty minerals, magnesium and phosphate-based food additives. This was partially offset by higher sales volumes of potash, specialty agriculture and FertilizerpluS products and phosphate fertilizers, as well as higher selling prices of bromine-based industrial solutions, specialty minerals, turf and ornamental products and phosphate-based food additives. |
| - | Asia – The decrease in sales was primarily due to lower selling prices and sales volumes of potash, bromine-based flame retardant, bromine-based industrial solutions, phosphate fertilizers, MAP used as raw materials for energy storage solutions, salts and WPA, as well as a decrease in sales volumes of FertilizerpluS products and phosphate-based food additives, together with a negative impact resulting from the depreciation of the average exchange rate of the Chinese yuan against the US dollar. The decrease was partially offset by higher sales volumes of specialty agriculture products, as well as higher selling prices and sales volumes of phosphorous-based industrial solutions. |
| - | South America – The decrease in sales was primarily due to lower selling prices of potash, phosphate fertilizers, as well as specialty agriculture and FertilizerpluS products, together with lower sales volumes of WPA and phosphate-based food additives. The decrease was partially offset by higher sales volumes of phosphate fertilizers, potash, specialty agriculture and FertilizerpluS products, together with higher selling prices of phosphate-based food additives and a positive impact resulting from the appreciation of the Brazilian real against the US dollar. |
| - | North America – The decrease in sales was primarily due to lower sales volumes and selling prices of phosphorous and bromine-based flame retardants and potash, as well as lower selling prices of phosphate fertilizers and specialty agriculture products, together with lower sales volumes of magnesium, phosphate-based food additives and salt, as well as turf and ornamental products. This was partially offset by higher sales volumes and selling prices of WPA, as well as higher sales volumes of clear brine fluids, phosphate fertilizers, specialty agriculture and FertilizerpluS products, together with higher selling prices of phosphate-based food additives, salts, magnesium, and phosphorous-based industrial solutions. |
| - | Rest of the world – The decrease in sales was primarily due to lower sales volumes and selling prices of potash, FertilizerpluS products, phosphate fertilizers, bromine-based flame retardants and WPA, as well as lower selling prices of specialty agriculture products and lower sales volumes of magnesium, together with a negative impact resulting from the depreciation of the average exchange rate of the Israeli shekel against the US dollar. This was partially offset by higher sales volumes and selling prices of clear brine fluids, as well as higher sales volumes of specialty agriculture products. |
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Tax Expenses
In 2023, the Company’s debt of about $7 million.
Segment Information
Segment revenues,revenue, expenses and results include inter-segment transfers, which are priced mainly based on transactiontransactions prices in the ordinary course of business – this being based onbusiness. This is aligned with reports that are regularly reviewed by the chief operating decision maker. TheseChief Operating Decision Maker. Inter-segment transfers are eliminated as part of consolidation of the financial statements. The segment income is measured based on the operating income, without certain expenses that are not allocated to the operating segments including general and administrative expenses, as it is included in reports that are regularly reviewed by the chief operating decision maker.statements' consolidation process.
Results of Operationsoperations for the year 2023 – Specialty Solutions SegmentIndustrial Products segment
| 2017 | 2016 | |
| $ millions | $ millions |
| Industrial Products | 1,193 | 1,120 |
| Sales to external customers | 1,179 | 1,111 |
| Sales to internal customers | 14 | 9 |
| Advanced Additives* | 877 | 798 |
| Sales to external customers | 824 | 732 |
| Sales to internal customers | 53 | 66 |
| Food Specialties | 596 | 659 |
| Sales to external customers | 585 | 650 |
Sales to internal customers | 11 | 9 |
| Setoffs | (16) | (24) |
| Total segment sales | 2,650 | 2,553 |
| Operating income attributable to the segment | 554 | 534 |
| 2023 | 2022 | |
| $ millions | $ millions |
Segment Sales | 1,227 | 1,766 |
Sales to external customers | 1,206 | 1,737 |
Sales to internal customers | 21 | 29 |
Segment Operating Income | 220 | 628 |
Depreciation and amortization | 57 | 61 |
Segment EBITDA | 277 | 689 |
Capital expenditures | 91 | 90 |
Below is a geographical breakdown of the segment’sour sales to external customers, by customer location:
| Year Ended December 31, | ||
| 2023 | 2022 | |
| $ millions | $ millions | |
Europe | 430 | 572 |
Asia | 361 | 664 |
North America | 341 | 395 |
South America | 23 | 36 |
Rest of the world | 51 | 70 |
Total | 1,206 | 1,737 |
| Year Ended December 31, | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| North America | 917 | 883 |
| Europe | 884 | 807 |
| Asia | 521 | 426 |
| South America | 177 | 182 |
| Rest of the world | 151 | 255 |
| Total | 2,650 | 2,553 |
ICL Group Limited 191
| $ millions | ||||||
| Total sales YTD 2016 | 1,120 | 798 | 659 | (24) | 2,553 | |
| Quantity | 57 | 85 | (67) | 7 | 82 | |
| Price | 12 | (7) | (1) | - | 4 | |
| Exchange rate | 4 | 1 | 5 | 1 | 11 | |
| Total sales YTD 2017 | 1,193 | 877 | 596 | (16) | 2,650 |
YTD 2022 figures | 1,766 | (1,138) | 628 | |
Quantity | (325) | 132 | (193) | |
Price | (216) | - | (216) | |
Exchange rates | 2 | 19 | 21 | |
Raw materials | - | (17) | (17) | |
Energy | - | (6) | (6) | |
Transportation | - | 22 | 22 | |
Operating and other expenses | - | (19) | (19) | |
YTD 2023 figures | 1,227 | (1,007) | 220 |
| - | Quantity – |
| - | Price – The negative impact on operating income was due to lower selling prices of bromine and |
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| - | Raw materials – The negative impact on operating income was due to increased costs of raw materials. |
| - | Energy – The negative impact on operating income was due to higher prices of electricity and gas. |
| - | Transportation – The positive impact on operating income was due to lower marine transportation costs, partially offset by higher costs of inland transportation. |
| - | Operating and other expenses – The negative impact on operating income was primarily related to higher maintenance and operational costs. |
ICL Group Limited 192
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Results of Operationsoperations for the year 2023 - Essential Minerals SegmentPotash segment
| 2023 | 2022 | |
| $ millions | $ millions |
| Segment Sales | 2,182 | 3,313 |
| Potash sales to external customers | 1,693 | 2,710 |
| Potash sales to internal customers | 129 | 184 |
Other and eliminations (1) | 360 | 419 |
| Gross Profit | 1,171 | 2,292 |
| Segment Operating Income | 668 | 1,822 |
| Depreciation and amortization | 175 | 166 |
| Segment EBITDA | 843 | 1,988 |
| Capital expenditures | 384 | 346 |
| Potash price - CIF ($ per tonne) | 393 | 682 |
| (1) | Primarily includes salt produced in Spain, metal magnesium-based products, chlorine, and sales of excess electricity produced by ICL’s power plant at the Dead Sea in Israel. |
| 2017 | 2016 | |
| $ millions | $ millions |
| Potash & Magnesium | 1,383 | 1,338 |
| Sales to external customers | 1,258 | 1,213 |
| Sales to internal customers | 125 | 125 |
| Phosphate | 1,052 | 1,163 |
| Sales to external customers | 860 | 966 |
| Sales to internal customers | 192 | 197 |
| Specialty Fertilizers | 692 | 661 |
| Sales to external customers | 671 | 632 |
| Sales to internal customers | 21 | 29 |
| Setoffs | (119) | (126) |
| Total segment sales | 3,008 | 3,036 |
| Operating income attributable to the segment | 359 | 398 |
Below is a geographical breakdown of the segment’sour sales to external customers by customer location:
| Year Ended December 31, | ||
| 2023 | 2022 | |
| $ millions | $ millions | |
| Asia | 539 | 1,008 |
| Europe | 529 | 571 |
| South America | 523 | 937 |
| North America | 260 | 365 |
| Rest of the world | 122 | 150 |
| Total | 1,973 | 3,031 |
| Year Ended December 31, | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Europe | 1,005 | 1,029 |
| Asia | 879 | 889 |
| South America | 496 | 416 |
| North America | 265 | 254 |
| Rest of the world | 363 | 448 |
| Total | 3,008 | 3,036 |
| $ millions | ||||||
| Total sales YTD 2016 | 1,338 | 1,163 | 661 | (126) | 3,036 | |
| Quantity | 1 | (73) | 46 | 8 | (18) | |
| Price | 41 | (37) | (12) | (1) | (9) | |
| Exchange rate | 3 | (1) | (3) | - | (1) | |
| Total sales YTD 2017 | 1,383 | 1,052 | 692 | (119) | 3,008 |
| YTD 2022 figures | 3,313 | (1,491) | 1,822 | |
| Quantity | 35 | (19) | 16 | |
| Price | (1,167) | - | (1,167) | |
| Exchange rates | 1 | 11 | 12 | |
| Raw materials | - | 3 | 3 | |
| Energy | - | 19 | 19 | |
| Transportation | - | 33 | 33 | |
| Operating and other expenses | - | (70) | (70) | |
| YTD 2023 figures | 2,182 | (1,514) | 668 |
| - | Quantity – The positive impact on operating income was primarily related to higher sales volumes of potash to China, Europe and Brazil, partially offset by lower sales volumes to India and the |
| - | Price – The negative impact on operating income resulted primarily from a decrease of $289 in |
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| Phosphate rock | ||
| Production of rock | 4,877 | 5,744 |
| Sales * | 498 | 1,032 |
| Phosphate rock used for internal purposes | 4,300 | 4,099 |
| Phosphate fertilizers | ||
| Production | 2,094 | 2,725 |
| Sales * | 2,291 | 2,645 |
| - |
| Sales to external customers | 1,181 | 1,134 |
| Sales to internal customers * | 149 | 151 |
| Total sales | 1,330 | 1,285 |
| Gross profit | 555 | 513 |
| Operating income attributable to potash business | 303 | 291 |
| CAPEX | 256 | 305 |
| Depreciation and amortization | 121 | 119 |
| Average potash selling price per tonne - FOB (in $) | 219 | 211 |
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Potash – Production and Sales
| Thousands of Tonnes |
| Production | 4,773 | 5,279 | 4,420 | 4,691 |
| Sales to external customers | 4,687 | 4,818 | ||
| Sales to internal customers | 352 | 347 | ||
| Total sales (including internal sales) | 5,039 | 5,165 | 4,683 | 4,499 |
| Closing inventory | 400 | 666 | 284 | 547 |
| - | Production– |
| - | Sales |
| For the Years Ended December 31, | % Increase (Decrease) | ||
| 2016 | 2015 | ||
| $ millions | $ millions | sales | |
| Sales | 5,363 | 5,405 | (1)% |
| Cost of sales | 3,703 | 3,602 | 3% |
| Gross profit | 1,660 | 1,803 | (8)% |
| Selling, transport and marketing expenses | 722 | 653 | 11% |
| General and administrative expenses | 321 | 350 | (8)% |
| Research and development expenses | 73 | 74 | (1)% |
| Other expenses | 618 | 211 | 193% |
| Other income | (71) | (250) | (72)% |
| Operating income (loss) | (3) | 765 | - |
| Finance expenses, net | 132 | 108 | 22% |
| Share in earnings of equity-accounted investees | 18 | 11 | 64% |
| Income (loss) before income taxes | (117) | 668 | - |
| Provision for income taxes | 55 | 162 | - |
| Net income (loss) | (172) | 506 | - |
| Net income (loss) attributable to the shareholders of the Company | (122) | 509 | - |
| Earnings (loss) per share attributable to the shareholders of the Company: | |||
| Basic earnings (loss) per share (in dollars) | (0.10) | 0.40 | - |
| Diluted earnings (loss) per share (in dollars) | (0.10) | 0.40 | - |
Results of operations for the year 20162023 – Phosphate Solutions segment
| 2023 | 2022 | |
| $ millions | $ millions |
| Segment Sales | 2,483 | 3,106 |
| Sales to external customers | 2,274 | 2,851 |
| Sales to internal customers | 209 | 255 |
| Segment Operating Income | 329 | 777 |
| Depreciation and amortization* | 221 | 189 |
| Segment EBITDA | 550 | 966 |
| Phosphate specialties EBITDA | 277 | 436 |
| Phosphate commodities EBITDA | 273 | 530 |
| Capital expenditures | 272 | 259 |
* For 2023, comprised of $60 million in phosphate specialties and $161 million in phosphate commodities. For2022, comprised of $53 million in phosphate specialties and $136 million in phosphate commodities.
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Below is a geographical breakdown of our sales according to external customers, by customer location:
| Year Ended December 31, | ||
| 2023 | 2022 | |
| $ millions | $ millions | |
| Europe | 615 | 778 |
| North America | 613 | 654 |
| Asia | 576 | 787 |
| South America | 367 | 493 |
| Rest of the world | 103 | 139 |
| Total | 2,274 | 2,851 |
| Year Ended December 31, | ||
| 2016 | 2015 | |
| $ millions | $ millions | |
| Europe | 1,863 | 2,012 |
| Asia | 1,275 | 1,118 |
| North America | 1,141 | 1,253 |
| South America | 588 | 585 |
| Rest of the world | 496 | 437 |
| Total | 5,363 | 5,405 |
ICL Group Limited 195
Expenses | Operating income | |||
$ millions | ||||
| YTD 2022 figures | 3,106 | (2,329) | 777 | |
| Quantity | (211) | 122 | (89) | |
| Price | (393) | - | (393) | |
| Exchange rates | (19) | 42 | 23 | |
| Raw materials | - | 74 | 74 | |
| Energy | - | (15) | (15) | |
| Transportation | - | 7 | 7 | |
| Operating and other expenses | - | (55) | (55) | |
| YTD 2023 figures | 2,483 | (2,154) | 329 |
| - | Quantity – The negative impact on operating income was due to lower sales volumes of white phosphoric acid (WPA), salts, phosphate-based food additives and MAP used as raw materials for energy storage solutions. This was partially offset by higher sales volumes of phosphate fertilizers. |
| - | Price – The negative impact on operating income primarily related to lower selling prices of phosphate |
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| - | Energy – The negative impact on operating income was due to increased electricity and gas prices, mainly in Europe and the US. |
| - | Transportation – The positive impact on operating income was due to lower marine and inland costs. |
| - | Operating and other expenses |
ICL Group Limited 196
Results of operations for the year 2023 – Growing Solutions segment
| 2016 | 2015 | |
| $ millions | $ millions |
| Industrial Products | 1,120 | 1,034 |
| Sales to external customers | 1,111 | 1,020 |
| Sales to internal customers | 9 | 14 |
| Advanced Additives* | 798 | 781 |
| Sales to external customers | 732 | 697 |
| Sales to internal customers | 66 | 84 |
| Food Specialties | 659 | 613 |
| Sales to external customers | 650 | 602 |
| Sales to internal customers | 9 | 11 |
| Setoffs | (24) | (34) |
| Total segment sales | 2,553 | 2,394 |
| Operating income attributable to the segment | 534 | 451 |
| 2023 | 2022 | |
| $ millions | $ millions |
| Segment Sales | 2,073 | 2,422 |
| Sales to external customers | 2,047 | 2,376 |
| Sales to internal customers | 26 | 46 |
| Segment Operating Income | 51 | 378 |
| Depreciation and amortization | 68 | 70 |
| Segment EBITDA | 119 | 448 |
| Capital expenditures | 92 | 101 |
Below is a geographical breakdown of the segment’sour sales to external customers, by customer location:
| Year Ended December 31, | ||
| 2023 | 2022 | |
| $ millions | $ millions | |
| South America | 752 | 849 |
| Europe | 741 | 873 |
| Asia | 255 | 284 |
| North America | 135 | 162 |
| Rest of the world | 164 | 208 |
| Total | 2,047 | 2,376 |
| Year Ended December 31, | ||
| 2016 | 2015 | |
| $ millions | $ millions | |
| North America | 883 | 904 |
| Europe | 807 | 797 |
| Asia | 426 | 278 |
| South America | 182 | 203 |
| Rest of the world | 255 | 212 |
| Total | 2,553 | 2,394 |
Sales | Expenses | Operating income | ||||
$ millions | ||||||
| YTD 2022 figures | 2,422 | (2,044) | 378 | |
| Quantity | 106 | (56) | 50 | |
| Price | (470) | - | (470) | |
| Exchange rates | 15 | (26) | (11) | |
| Raw materials | - | 131 | 131 | |
| Energy | - | (2) | (2) | |
| Operating and other expenses | - | (25) | (25) | |
| YTD 2023 figures | 2,073 | (2,022) | 51 |
| Total sales YTD 2015 | 1,034 | 781 | 613 | (34) | 2,394 | |
| Quantity | 101 | 36 | 44 | 6 | 187 | |
| Price | (17) | (17) | 8 | 4 | (22) | |
| Exchange rate | 2 | (2) | (6) | - | (6) | |
| Total sales YTD 2016 | 1,120 | 798 | 659 | (24) | 2,553 |
| - | Quantity – |
| - | Price –The negative impact on operating income was due to lower selling prices across most business lines, mainly specialty agriculture and FertilizerpluS products. This was partially offset by higher selling prices of Turf and Ornamental products. |
| - | Exchange rates – The unfavorable impact on operating income was mainly due to the negative impact on operational costs resulting from the appreciation of the average exchange rate of the Brazilian real and the euro against the US dollar, which was partially offset by a negative impact on sales, resulting from the above mentioned appreciation, together with a |
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| 2016 | 2015 | |
| $ millions | $ millions |
| Potash & Magnesium | 1,338 | 1,515 |
| Sales to external customers | 1,213 | 1,384 |
| Sales to internal customers | 125 | 131 |
| Phosphate | 1,163 | 1,064 |
| Sales to external customers | 966 | 864 |
| Sales to internal customers | 197 | 200 |
| Specialty Fertilizers | 661 | 680 |
| Sales to external customers | 632 | 656 |
| Sales to internal customers | 29 | 24 |
| Setoffs | (126) | (144) |
| Total segment sales | 3,036 | 3,115 |
| Operating income attributable to the segment | 398 | 885 |
| Year Ended December 31, | ||
| 2016 | 2015 | |
| $ millions | $ millions | |
| Europe | 1,029 | 1,150 |
| Asia | 889 | 829 |
| South America | 416 | 381 |
| North America | 254 | 280 |
| Rest of the world | 448 | 475 |
| Total | 3,036 | 3,115 |
| Total sales YTD 2015 | 1,515 | 1,064 | 680 | (144) | 3,115 | |
| Quantity | 204 | 290 | 24 | 10 | 528 | |
| Price | (366) | (185) | (39) | 8 | (582) | |
| Exchange rate | (15) | (6) | (4) | - | (25) | |
| Total sales YTD 2016 | 1,338 | 1,163 | 661 | (126) | 3,036 |
Raw materials – The positive impact on operating income |
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| Phosphate rock | ||
| Production of rock | 5,744 | 4,417 |
| Sales * | 1,032 | 1,635 |
| Phosphate rock used for internal purposes | 4,099 | 2,767 |
| Phosphate fertilizers | ||
| Production | 2,725 | 1,639 |
| Sales * | 2,645 | 1,566 |
| Sales to external customers | 1,134 | 1,292 |
| Sales to internal customers * | 151 | 157 |
| Total sales | 1,285 | 1,449 |
| Gross profit | 513 | 660 |
| Operating income attributable to potash business | 291 | 645 |
| CAPEX | 305 | 281 |
| Depreciation and amortization | 119 | 102 |
| Average potash selling price per tonne - FOB (in $) | 211 | 280 |
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| Production | 5,279 | 4,195 |
| Sales to external customers | 4,818 | 4,181 |
| Sales to internal customers | 347 | 375 |
| Total sales (including internal sales) | 5,165 | 4,556 |
| Closing inventory | 666 | 552 |
B. LIQUIDITY AND CAPITAL RESOURCES
Overview
As atof December 31, 2017,2023, ICL had a balance of $173$592 million in cash, cash equivalents,,
As at December 31, 2017,In addition, the Company'sCompany has unutilized long‑term credit facilities of about $1.2 billion and a securitization agreement in the amount of $300 million, of which the Company has utilized approximately $182 million of the facility.
Furthermore, our net financial liabilities were $3,037$2,095 million,, including $2,388$1,829 million ofin long‑term debt (excluding current maturities) and debentures, and $822$858 million ofin short‑term debt (including current maturities of long‑term debt). The long-term debt consists of debentures totaling $953 million together with loans from financial institutions and lease liabilities totaling $876 million, while short‑term debt consists of $283 million in short-term loans from financial institutions and $575 million in current maturities of debentures, loans and lease liabilities. For more information about the currencies in which the Company's liabilities are denominated and their interest rates, see Note 13 to our Audited Financial Statements.
Distributions of dividends to ICL from its subsidiaries and transfers of funds through certain countries may, under certain circumstances, result in the creation of tax liabilities. However, taxation on dividend distributions and funds transfers have not had, and are not expected to have, a material impact on the Company'sour ability to meet itsour cash obligations.
As of December 31, 2023, we had no material off-balance sheet arrangements other than the amounts described in Note 18A to our Audited Financial Statements.
ICL Rotem. Additional major capital expenditures scheduled to run over the coming years are investments in the YPH joint venture in China along with further investment in Spain. In addition, in 2019 long‑term debt repayments are expected to be made in the amount of about $260 million. On the other hand, as part of its strategy of divesting non-core businesses, in December 2017, the Company completed sale of its holdings in IDE Technologies Ltd., for net proceeds of $168 million. In addition, in December 2017, the Company signed an agreement to sell its fire safety and oil additives (P2S5) businesses to SK Capital for approximately $1 billion (of which $950 million will be in cash and $53 million will be in preferred equity notes of the Buyer), where closing of the deal is expected in the first half of 2018, subject to customary conditions and receipt of regulatory approvals. For additional information on divestitures currently in progress, see “Item 3 - Key Information— A. Selected Financial Data”.Group Limited 199
Credit Facilities
Sustainability-linked Revolving Credit Facility (RCF)
In April 2023, the Company entered into a Sustainability-Linked Revolving Credit Facility Agreement made between ICL Finance B.V. and a consortium of twelve international banks for a $1,550 million credit facility. The Sustainability-Linked RCF replaced a previous revolving credit facility that was entered into in 2015, as amended and extended in 2018, and which was due to expire in 2025. As of December 31, 2023, the Company had utilized $376 million of the credit facility.
Securitization
The total amount of the Company's committed securitization facility framework is $300 million with an additional $100 million uncommitted. As of December 31, 2023, ICL had utilized approximately $182 million of the facility’s framework.
Debentures
In March 2017, Fitch 2023, the Company repaid NIS 392 million (approx. $108 million) of its Series E Bond, as scheduled.
In December 2022, the Company repaid NIS 15 million (approx. $4 million) of its Series G Bond, as scheduled.
Subsequent to date of the report, in January 2024, the Company repaid $145 million private placement bond, as scheduled.
Ratings loweredand financial covenants
S&P
In July 2023, the S&P credit rating agency reaffirmed the Company’s international corporate credit rating to BBB-and senior unsecured rating of 'BBB-'. In addition, the S&P Maalot credit rating agency reaffirmed the Company’s credit rating of 'ilAA' with a stable rating outlook. Fitch’s above-mentioned rating also applies to the Company’s debentures.
In June 2023, Fitch Ratings reaffirmed the Company’s international corporate creditlong-term issuer default rating and senior unsecured rating at BBB- with'BBB-'. The outlook on the long-term issuer default rating is stable.
Financial Covenants
For a stable outlook. The local rating by S&P Maalot was also reaffirmed at ilAA with a stable outlook. The above-mentioned rating also applies todescription of material financial covenants in the Company’s debentures.loan agreements and any potential risk relating to compliance with them, credit facilities, sale of receivables under securitization transaction and information on material loans and debentures outstanding as of December 31, 2023, see Note 13 to our Audited Financial Statements.
ICL Group Limited 200
Sources and Uses of Cash
The following table sets forth our cash flowsflow for the periods indicated:
| Year Ended December 31, | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
| Net cash provided by operating activities | 847 | 966 | 573 |
| Net cash used in investing activities | (333) | (800) | (547) |
| Net cash provided by (used in) financing activities | (511) | (239) | 15 |
| Year Ended December 31, | ||
| 2023 | 2022 | |
| $ millions | $ millions | |
| Net cash provided by operating activities | 1,595 | 2,025 |
| Net cash used in investing activities | (863) | (754) |
| Net cash used in financing activities | (712) | (1,303) |
Operating Activities
Investing Activities
Financing Activities
Principal Capital Expenditures
ICL incurred cash capital expenditures of long term loans, net,$594 million and $603 million for the years ended December 31, 2023, and 2022, respectively. These capital expenditures comprise investments in fixed and intangible assets.
ICL’s principal capital expenditures over the last three years have consisted of work on the following main projects:
Energy storage solutions (ESS) in St. Louis. In October 2022, the Company announced its plan to build an LFP CAM plant in St. Louis, Missouri, which is expected to be the first large-scale LFP material manufacturing facility in the amountUS. The Company was awarded a $197 million grant from the US Department of $421 million, comparedEnergy. The plant is expected to produce high-quality LFP material for the global lithium battery industry using a primarily domestic supply chain. The plant is expected to help meet growing demand from the energy storage, EV and clean-energy industries for US-produced-and-sourced essential battery materials.
Salt harvesting in the Dead Sea. The Salt Harvest Project aims to provide a permanent solution to the rising of the water level of Pond 5 and preserve the water level in at its maximum height (15.1 meters) by harvesting salt from this pond and transferring it to the Dead Sea northern basin. According to the agreement with the amountIsraeli government, the planning and execution of $87 million made last year, along with higher dividend paymentsthe Salt Harvest Project will be performed by DSW. The Company will bear 80% and the State of Israel will bear 20% of the cost of the project. However, the State's share will not exceed NIS 1.4 billion. Commencing 2022, the brines' volume in Pond 5 is preserved by the salt Harvest Project.
ICL Group Limited 201
Two new harvesters. ICL Dead Sea’s raw material plant operates several floating barges that supply Carnallite to the Company’s shareholders,production plants. In order to ensure continues operation, the Company initiated a project for the construction of two new harvesters to replace the older ones. This investment will ensure the standardization of the harvesters' fleet and increase the reliability of the raw-material supply to the production plants to support the Company's production goals. The project is expected to be completed by the end of 2024.
Three emission treatment precipitators. In order to meet the emissions requirements of the Israeli Clean Air Law, it is essential to upgrade the system for gas treatment of the carnallite dryers by constructing three wet electrostatic precipitators (one for each dryer). The project is expected to be completed by the end of 2025.
LFP battery production in China. In 2022, the Company built and currently operates a new 70 thousand tonne MAP 73% battery level minerals plant to specifically serve the fast-growing LFP industry. The total capacity of MAP 73%, together with the produced technical grade phosphoric acid and improved green phosphoric acid, creates a portfolio that positions YPH as one of the most important phosphate suppliers to the battery industry in south China.
Investment in EHS related activities. We continuously invest in capital projects related to environmental protection, health and safety and in their proactive management. Over the next few years, we intend to invest significant capital to further reduce our air emissions, treat hazardous materials and reduce our overall negative environmental impact. These include investments that are required to comply with the Israeli Clean Air Law, European environmental regulations and other regional environmental regulations.
Raising the coastal dikes of evaporation Pond 5 at the Dead Sea. The project’s objective was to protect from structural damage to the foundations and hotel buildings situated close to the water’s edge, to the settlement of Neve Zohar and to other infrastructure located along the western shoreline of Pond 5. The project included the raising of the dike along the western beachfront of Pond 5 across from the hotels together with a system for lowering subterranean water. The project was implemented by the Government of Israel, through the Dead Sea Preservation Government Company Ltd., together with DSW (which financed 39.5% of the project's cost). The construction work with respect to the hotels' coastline has been completed.
New P-9 pumping station in Sodom. Due to the receding water level in the amountnorthern basin of $75 million compared with 2016. On the other hand, there was an increaseDead Sea, the Company constructed a new pumping station that serves as the main brine intake station for pumping brine from the Dead Sea to the coastal transmission system. The new P-9 pumping station commenced operation in receipt of short-term credit from banks and others, net, in the amount of $133 million, compared with the prior year.January 2022.
The netCompany finances its capital expenditures from cash usedflow from operations and from credit facilities.
ICL Group Limited 202
C. RESEARCH AND DEVELOPMENT, INTELLECTUAL PROPERTY AND LICENSES, ETC.
Research and development
ICL’s R&D and Innovation (RD&I) activities are part of our global strategic plan and include product, formulation, and process developments. The activities include internal research and collaborative research with universities, institutes, and start-ups. Our RD&I aims to create new products and solutions to address current and future market and customer needs and identify new uses for our core minerals and derivatives. The Company’s core RD&I activities support each of our business segments. The longer-term strategic projects, digital platforms, and technological solutions for farmers and agronomists are coordinated at the corporate level.
Fields of RD&I include:
Next Generation Fertilization: nutrient use efficiency, biodegradable coatings; nutrient sensing; growth enhancers; nitrogen fixation, recycled nutrients and soil health.
Food Technology: texture improvement, stabilization, salt reduction, shelf-life extension and alternative proteins.
E-mobility/Sustainability: cathode-active materials; electrolytes for batteries; energy storage; hydrogen carriers for fuel cells; lithium battery recycling; recycling technologies for other materials.
Novel Materials: flame retardants; paints & coatings additives; biocides; post-harvest solutions.
Circular economy: waste to product; recycling; efficiency improvement.
Industry 4.0:IOT concepts in financingmanufacturing, safety and environment; machine learning and AI technologies for manufacturing optimization and product development.
Digital Agricultural Suite:
ICL’s Digital Agricultural Suite continues to evolve in our mission to integrate multiple precision agricultural technologies (sensors, imagery, and others) with additional agronomical research data from multiple partners.
Digital technology developed by ICL digests data from multiple sources, automatically aggregating, standardizing and processing it to create one harmonized data lake with powerful AI/machine learning engines. Those powerful engines enable us to deploy advanced data-driven solutions that drive real-time agronomic decision-making, such as increasing crop yields and farmer's profitability. An increasing number of global partners are joining our revolutionary digital platform including leading global academic institutions and multinational agriculture companies solidifying this strong digital foundation with high-quality and highly actionable agronomic data.
Through these efforts, ICL aims to leverage its digital platform and data-driven solutions to create an agro-professional community that enables sharing of information and knowledge between growers and agro-professionals, dealers, retailers and food producers to extract the most value from agriculture.
ICL Group Limited 203
Below are the main areas of the R&D activities by segments:
Industrial Products
Development of magnesia-based product formulations to fulfill unmet needs in 2016the markets. We introduced our new formulation, FruitMag™, which serves as a firming agent for post-harvest treatment of citrus fruits. We are also marketing a product that enables aluminum salt-free deodorant, known as CareMag® D, which is already being marketed by several leading international companies. We developed a magnesium-based formulation, TextiMag®, designed to absorb odors and increase skin wellness with a textile coating. In addition, we are also developing a new formulation package of skin treatments including face mask, serum and swallowing tablets, all based on magnesium.
Development of brominated electrolytes and phosphorus-based active salt for electrolytes for battery producers.
Promotion of antimicrobial products, such as CDA technology for pulp & paper, reverse osmosis membranes & cooling towers.
Use of the Company's Bromoquel® product, a new solution designed to treat bromine leakages, in its plants as well as commercially distribute the product.
Development of a new flame-retardant product for the textile market which is currently in the market penetration stage.
Total R&D expenses by the Industrial Products segment in 2023 amounted to $239 million, compared with net cash provided by financing activities of $15 million in 2015. This is mainly due to an increase in the repayment of long term loans, amounting to $519 million, compared with 2015. On the other hand, there was a decrease in the Company’s dividend payments compared with 2015, amounting to $185about $19 million.
Advancement of research regarding environmental protection, including the development of methods for treating and reducing effluents.
Analysis of alternative methods to increase production capacity of carnallite at December 31, 2017,our evaporation ponds, based on renewable energies.
Initiatives centered on floatation and crystallization plants aimed at enhancing production capacity while simultaneously reducing the Company’s non‑current liabilities consistedconsumption of loans from financial institutionsindustrial water.
Total R&D expenses in 2023 in the amountPotash segment were about $5 million.
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Phosphate Solutions
Analysis of $872 millionthe adaptation of various potential types of phosphate rock to produce phosphoric acid and debentures inits downstream products as part of an effort to utilize and increase existing phosphate reserves. In 2024, the amountCompany will further analyze additional types of $1,516 million. For information about the currencies in which the Company's liabilities are denominatedphosphate including by conducting R&D, pilots, plant testing activities and their interest rates, see Note 16other economic feasibility assessments.
Research regarding environmental protection, including developing methods to treat and reduce effluents and applications for Phosphogypsum uses.
Investigation of opportunities to integrate waste steams into our production processes, fostering a closed-loop circular economy and development of future sources for sustainable fertilizer products.
Development of a new fertilizer product with microelements that contribute to plant growth.
Development of a new PK fertilizer designed to be fully water soluble.
The Specialties R&D group established a team dedicated to the Company's audited consolidated financial statements.scaling up of licensed technology for LFP CAM. The team was awarded a United States Department of Energy grant for $197 million to establish an LFP CAM plant at our St. Louis, USA facility. As at December 31, 2017, the Company had $1,568 million of unutilized long‑term credit lines. As at March 1, 2018, the company withdrew an additional $320 million from its existing credit facilities.
Introduction of a novel Asphalt admixture that improves asphalt stiffening properties, similar to polyphosphoric acid, but which also significantly enhances antistrip properties with improved freeze point and high flash point properties.
The Specialties R&D group supported further growth in the traditional markets and application areas of Meat/Poultry/Seafood, Dairy, and Bakery. We also expanded our footprint in emerging markets, through sustainable and affordable solutions. New launches include innovative products beyond phosphates for sodium reduction and texture improvement.
The Front-End Innovation group has scouted more than 500 food technology start-ups to identify disruptive technologies for ICL Phosphate Specialties. Following the investment in Protera Biosciences, and Plantible Foods, ICL Planet Startup Hub invested €2.75 million in Arkeon, a start-up that creates completely customizable protein ingredients by converting CO2 into nutritious amino acids and sustainable proteins necessary for human nutrition. The teams continue to seek innovation partners engaged in the transformation of sustainable food systems.
Continued diversification and development of a product portfolio for meat substitutes: ICL and Plantible Foods have partnered to launch ROVITARIS® Binding Solution, a revolutionary clean label binding solution for plant-based meat and seafood applications that may replace most chemically processed binders. The ROVITARIS® fresh wet protein fibers are suited for several applications such as tender white meat imitations for chicken and seafood alternatives. ROVITARIS® emulsion portfolio has been expanded as a toolbox to target multiple applications such as substitute for cold-cuts, sausages, hot dogs, bacon, and pepperoni. ICL has established a Center of Excellence for alternative proteins technology to innovate next-generation ROVITARIS® and other innovative plant-based solutions including fish-like products. Such center will expand ICL’s expertise to better serve commercial strategies for global markets.
Total R&D expenses in the Phosphate Solutions segment in 2023 totaled about $10 million.
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Growing Solutions
The Growing Solutions segment promotes innovation and the development of new products and services.
Main R&D targets:
Development of controlled-release fertilizers with biodegradable coating to meet the regulatory requirements of the interest rates,EU Fertilizer Product standards, expected in order2026.
Development of innovative bio-stimulant products alongside fertilizers embedded with unique bio-stimulants designed to conformenhance their performance.
Development of biological bio-stimulants designed to encourage plant growth and provide resilience to different stress conditions. In 2022, ICL signed a multi-year, strategic collaboration agreement with Lavie Bio Ltd., which will focus on developing novel bio-stimulant products to enrich fertilizer efficiency. Ag-biologicals are externally applied products used to optimize overall plant and soil health.
Development of fertilizers designed to enhance nutrient-use efficiency and reduce emissions.
Development of liquid and fully-soluble fertilizers.
Development of products designed to improve water use efficiency.
| • | Enhancement of micronutrients solutions and sulfur fertilizer formulations. |
Integration of secondary source phosphate technologies for immediate utilization at our production facilities in Europe as part of our Circular Economy approach and the actual interest‑rate structureadvancement of future sources of our fertilizer products, including the establishment of a technology roadmap for recycling and recovering phosphorous and nitrogen from secondary sources to transition our products into sustainable fertilizers.
| • | Development of fertilizers with higher agronomic nutrient efficiency. |
| • | Development of customized formulations tailored to meet specific customer requirements. |
Total R&D expenses of the projections regarding the anticipated developmentsGrowing Solution segment in the interest rates.2023 were about $17 million.
Circular Economy
For a description of material financial covenantsthe past few years, we have engaged in the Company’s loan agreementsCircular Economy. For further information see “Item 4 - Information on the Company— Environmental, Health and any potential risk relating to compliance with them – see Note 16 to the Company’s audited consolidated financial statements.Safety — Circular Economy”.
We believe that our intellectual property is crucial for protecting and developing our business activities. As of December 31, 2017, are as follows:
| Issuer | European bank | Group of eleven international banks | American bank | European bank |
Date of the credit facility | March 2014 | March 2015 | March 2016 | December 2016 |
Date of credit facility termination | March 2020 | March 2022* | March 2022* | June 2023 |
The amount of the credit facility | USD 35 million, Euro 60 million* | USD 1,705 million | USD 150 million | USD 136 million |
Credit facility has been utilized | - | USD 530 million** | - | - |
| Interest rate | Up to 33% use of the credit: Libor/Euribor + 0.90%. From 33% to 66% use of the credit: Libor/Euribor + 1.15% 66% or more use of the credit: Libor/Euribor + 1.40% | Up to 33% use of the credit: Libor/Euribor + 0.70%. From 33% to 66% use of the credit: Libor/Euribor + 0.80% 66% or more use of the credit: Libor/Euribor + 0.95% | Up to 33% use of the credit: Libor + 0.65%. From 33% to 66% use of the credit: Libor + 0.75%. 66% or more use of the credit: Libor + 0.95% | Libor +0.75% |
| Loan currency type | USD and euro loans | USD and euro loans | USD loans | USD loans |
| Pledges and restrictions | Financial covenants – see Note 16 Section D to the accompanying financial statements, a cross-default mechanism and a negative pledge. | Financial covenants - see Note 16 Section D to the accompanying financial statements, a cross-default mechanism and a negative pledge. | Financial covenants - see Note 16 Section D to the accompanying financial statements, a cross-default mechanism and a negative pledge. | Financial covenants - see Note 16 Section D to the accompanying financial statements, and a negative pledge. |
| Non-utilization fee | 0.32% | 0.21% | 0.19% | 0.30% |
The acquisitionsCompany also has over 3,000 registered trademarks worldwide, including inter alia:
Eqo®, eqo-x and eqo-s® - a group of brand names for innovative fast biodegradable controlled-release fertilizers designed to meet new EU fertilizers standards due to take effect in 2026.
Keep Green® - a brand name for a novel biostimulant to protect plants against excessive sun radiation and temperature.
Sulfurgran® - a leading product and brand in the sulfur market in Brazil.
Profol® - a leading foliar nutrition product line and brand in Brazil.
Osmocote® - a leading brand in the area of controlled released fertilizers which uses innovative technologies and is used globally by container nursery stocks, pot-plant growers and more.
Peters® - a brand of water-soluble fertilizers, specifically designed for bedding-, pot- and container nursery plants.
Joha® - a global brand of dairy specialties, which specializes in emulsifying salts for processed cheese.
Tari® - a brand in the meat industry as well as in the artisan business which focuses on the production and processing of meat products with functional additives, spices and flavors.
Brifisol® - a global brand in the meat and seafood industries, which concentrates in improving texture by adding cryoprotectant for frozen food products such as meat, shrimp, fish filets and more.
Rovitaris® - a brand name for plant-based meat alternatives that are on an ongoing basis, whereby the proceeds receivedvirtually indistinguishable from customers whose debts were sold aretheir traditional meat counterparts.
Fyrol® - a brand name for a range of phosphorus-containing flame retardants targeting flexible and rigid polyurethane foam applications.
Merquel® - a line of inorganic brominated salts which can be used to acquire new trade receivables. The periodcontrol mercury emissions from coal power plants.
We do not believe that the loss of any single patent or trademark or group of related patents or trademarks would have a material effect on our operations or our financial results.
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D. TREND INFORMATION
Trend information is included throughout the other sections of “Item 5 - Financial Results and Business Overview— A. Operating Results”. In addition, the fluctuations in which the Subsidiariesoperating results may continue in the upcoming quarters. Specific material drivers of these trends are entitled to sell their trade receivablesidentified in the discussion above with respect to the Acquiring Companyyears ended December 31, 2023 and 2022. Seasonality of our business is five years fromincluded in “Item 4 - Information on the closing date of the transaction, where both parties have the option at the end of each year to give notice of cancellation of the transactionCompany— B. Business Overview” and “Item 3 - Key Information— D. Risk Factors”.
E. CRITICAL ACCOUNTING ESTIMATES
The selling pricepreparation of the trade receivables is the amount of the debt sold, less the calculated interest cost based on the anticipated period between the sale date of the customer debt and its repayment date. Upon acquisition of the debt, the Acquiring Company pays the majority of the debt price in cash and the remainder in a subordinated note, which is paid after collection of the debt sold. The rate of the cash consideration varies according to the composition and behavior of the customer portfolio. The Subsidiaries handle collection of the trade receivables included in the securitization transaction, on behalf of the Acquiring Company. In addition, as part of the agreements a number of conditions were set in connection with the quality of the customer portfolios, which give the Lending Banks the option to end the undertaking or determine that some of the Subsidiaries, the customer portfolios of which do not meet the conditions provided, will no longer be included in the securitization agreements.
| Instrument type | Loan date | Original principal (millions) | Currency | Carrying amount 31 December, 2017 $ millions | Interest rate | Principal repayment date | Additional information |
| Loan-Israeli institutions | November 2013 | 300 | Israeli Shekel | 76 | 4.94% | 2015-2024 (annual installment) | Partially prepaid |
| Debentures (private offering) – 3 series | January 2014 | 84 145 46 | U.S Dollar | 84 145 46 | 4.55% 5.16% 5.31% | January 2021 January 2024 January 2026 | |
| Loan-international institutions | July 2014 | 27 | Euro | 26 | 2.33% | 2019-2024 | Partially prepaid |
| Debentures-Series D | December 2014 | 800 | U.S Dollar | 792 | 4.50% | December, 2024 | (1) |
| Loan-European Bank | December 2014 | 161 | Brazilian Real | 30 | CDI+1.35% | 2015-2021 (Semi annual installment) | |
| Loan from a European Bank | December 2015, December 2013 | 129 | U.S Dollar | 129 | Libor+1.40% | December 2019 | |
| Debentures-Series E | April 2016 | 1,569 | Israeli Shekel | 449 | 2.45% | 2021- 2024 (annual installment) | (2) |
| Loan - others | April - October, 2016 | 600 | Chinese Yuan Renminbi | 92 | 5.23% | 2019 | |
| Loan - Asian Banks | June - October, 2017 | 700 | Chinese Yuan Renminbi | 108 | 4.72% | 2018 | |
| Loan - Asian Bank | October, 2017 | 400 | Chinese Yuan Renminbi | 61 | CNH Hibor + 0.50% | April 2018 | |
| Loan - Parent Company | November - December, 2017 | 175 | U.S Dollar | 175 | 1.81% | 2018 | See Note 26D |
The evaluation of accounting estimates used in the preparation of ICL’s Financial Statements requires the Group’s financial statements requiresCompany's management of the Company to make assumptions regarding interpretations of laws interpretations applieswhich apply to the company,Company, circumstances and events that involveinvolving considerable uncertainty. Management of the CompanyThe Company's management prepares the estimates based on the basis of past experience, various facts, external circumstances, and reasonable assumptions accordingrelating to the pertinent circumstances of each estimate. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.affected.
| Credit from banks and others (not including current maturities) | 822 | 822 | - | - | - |
| Trade payables | 790 | 790 | - | - | - |
| Other payables | 310 | 310 | - | - | - |
| Operating lease obligations | 347 | 50 | 51 | 104 | 142 |
| Purchase obligations(1) | 794 | 454 | 89 | 251 | - |
| Employee Benefits | 668 | 28 | 106 | 165 | 369 |
| Long-term debt and debentures | 2,890 | 102 | 345 | 1,085 | 1,358 |
| Total | 6,621 | 2,556 | 591 | 1,605 | 1,869 |
| Financial liabilities – derivative instruments utilized for economic hedging | |||||
| Foreign currency and interest derivative instruments | 6 | 3 | - | - | 3 |
| 6 | 3 | - | - | 3 |
| A. | DIRECTORS AND OFFICERS |
The following table lists the names and ages of our directors as atof the publication date of this Annual Report. The mailing address of our directors is c/o Israel ChemicalsICL Group Ltd., 23 Aranha Street, Millennium Tower, Tel Aviv, 6120201, Israel.
| Name | Age | Commencement date as director | Director Qualification | Financial Expertise | Membership in Board Committees | ||
| Under the Israeli Companies Law | Under the NYSE rules | Under the Israeli Companies Law | Under the SEC rules | ||||
| Yoav Doppelt (Executive Chairman of the Board) | 55 | December 2018 and as CoB since July 2019 | (1) | - | - | ||
| Aviad Kaufman | 53 | March 2014 | (1) | Financial Expert | - | Financing Committee (member) | |
| Avisar Paz | 67 | April 2001 | (1) | Financial Expert | - | Financing Committee (member) | |
| Lior Reitblatt | 66 | November 2017 | Independent Director | Independent Director | Financial Expert | Audit Committee Financial Expert | Audit & Accounting Committee (member) Compensation Committee (member) |
| Reem Aminoach | 62 | March 2017 | (2) | Independent Director | Financial Expert | - | Climate, Sustainability & Community Committee (member) |
| Sagi Kabla | 47 | February 2016 | (1) | Financial Expert | - | Financing Committee (Chair) Climate, Sustainability & Community Committee (member) | |
| Tzipi Ozer Armon | 58 | January 2020 | Independent Director | Independent Director | Financial Expert | - | - |
| Gadi Lesin | 56 | March 2021 | Independent Director | Independent Director | Financial Expert | Audit Committee Financial Expert | Audit & Accounting Committee (member) Climate, Sustainability & Community Committee (member) |
| Dr. Miriam Haran | 74 | July 2021 | External Director | Independent Director | Financial Expert | Audit Committee Financial Expert | Audit & Accounting Committee (member) Compensation Committee (Chair) Climate, Sustainability & Community Committee (Cahir) |
Dafna Gruber | 58 | January 2022 | External Director | Independent Director | Financial Expert | Audit Committee Financial Expert | Audit & Accounting Committee (Chair) Compensation Committee (member) Financing Committee (member) |
| Michal Silverberg | 47 | July 2022 | (2) | Independent Director | Financial Expert | - | - |
| Shalom Shlomo | 46 | January 2024 | Independent Director | Independent Director | - | - | - |
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| Mr. |
Yoav Doppelt. Mr. Lior Reitblatt is an independent director pursuantDoppelt serves as the Chief Executive Officer of Israel Corp. Previously Mr. Doppelt served as the Chief Executive Officer of Kenon Holdings Ltd., a global company (NYSE: KEN), and Executive Chairman of IC Power Ltd., a power generation company, from March 2014 to September 2017. Prior thereto, Mr. Doppelt was the Israeli Companies Law.
Aviad Kaufman. Mr. Kaufman is the chief financial officerChief Executive Officer of One Globe Business Advisory Ltd, the chairman of Israel Corporation Ltd., and a board member of Kenon Holdings Ltd., OPC Energy Ltd. and other private companies, each of which may be associated with Mr. Idan Ofer. From 2017 until July 2021, Mr. Kaufman served as the Chief Executive Officer of Quantum Pacific (UK) LLP and Chairmanfrom 2008 until 2017 as Chief Financial Officer of the Board of Israel Corporation Ltd. He is also a director of Kenon Holdings Ltd., which may be considered associated with Mr. Idan Ofer.Quantum Pacific (UK) LLP (and its predecessor Quantum Pacific Advisory Limited). From 2002 until 2007, Mr. Kaufman served as director of international taxation and held variousfulfilled different senior corporate finance roles at Amdocs Ltd. (2002-2007). Previously, Mr. Kaufman held various consultancy positions with KPMG. Mr. Kaufman is a Certified Public Accountantcertified public accountant and holds a BA degree in accountingAccounting and economicsEconomics from the Hebrew University ofin Jerusalem (with honors)distinction), and an MBA, with a majorMaster’s of Business Administration in finance,Finance from Tel Aviv University.
Avisar Paz. Mr. Paz is served as the Chairman of the Board of Directors of OPC Energy Ltd. until January 3, 2021. Previously, Mr. Paz served as the Chief Executive Officer of Israel CorporationCorp. and was previously Israel Corporation'sprior to that, as the Chief Financial Officer.Officer of Israel Corp. Mr. Paz serves as director in various subsidiaries of Israel Corporation, including in Oil Refineries Ltd. Mr. Paz holdsreceived a BA degree in economicsEconomics and accountingAccounting from Tel AvivTel-Aviv University and is a Certified Public Accountantcertified public accountant in Israel.Israel (CPA).
Lior Reitblatt. Mr. Reitblatt is a Certified Public Accountant, and holds a BA in accounting and economics from Tel Aviv University and an MBA from the University of California, Berkeley. Until recently, Reitblatt. Mr. Reitblatt served as CEOChief Executive Officer and Chairman of the Board of Super-Pharm (Israel) Ltd. Mr. Reitblatt has also previously served, among other things,positions, as Chairman of the Board of Life Style Ltd. and member of the board of Office Depot Israel Ltd. Mr. Reitblatt is a certified public accountant, and holds a BA degree in Accounting and Economics from Tel Aviv University and an MBA degree from the University of California, Berkeley.
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Sagi Kabla. Mr. Kabla has served as the Chief Financial Officer of Israel Corp. since December 2015. Mr. Kabla previously served as director of Oil Refineries Ltd and as Senior Executive of Business Development, Strategy and IR at Israel Corp. Prior to joining Israel Corp., Mr. Kabla held various management roles at KPMG Corporate Finance and M&A. Mr. Kabla holds an MBA degree in Finance from COMAS and a B.A. degree in Economics and Accounting from Bar-Ilan University and he is qualified as a certified public accountant (Israel).
Tzipi Ozer-Armon. Ms. Ozer-Armon serves as the Chief Executive Officer of Lumenis Ltd. Before joining Lumenis, she headed the Japanese market activities of Teva Pharmaceutical Industries Ltd. and served as Senior Vice President of Sales and Marketing at SanDisk. Previously, Ms. Ozer-Armon also served as VP & General Manager at MSystems. In addition to ICL, Ms. Ozer-Armon is a director at the Strauss Group Ltd., SimilarWeb and Check Point and previously served as a director at IACC and Itamar Medical. Ms. Ozer-Armon holds a BA degree, magna cum laude, in Economics, and an MBA degree in Finance and Marketing from Tel-Aviv University, and she is an AMP graduate of the Harvard Business School.
Gadi Lesin. Mr. Lesin served as President and CEO of Strauss Group Ltd. ("Strauss Group"), an international food and beverage company and the largest food company in Israel, from 2009 to 2018. Mr. Lesin successfully led the Strauss Group through a time of intense economic, global and social change. Under his leadership, the Strauss Group strengthened its international operations, more than doubled its equity value, and grew its profits significantly. Mr. Lesin currently serves as a director in ORIAN SH.M. Ltd. and as an external director in Electra Consumer Products, both companies listed on the TASE. Mr. Lesin holds a BA degree in business management from the Tel Aviv College of Management and an MBA degree from Ben Gurion University.
Miriam Haran. Haran. Dr. Haran has been involved in environmental management and safety issues for over forty years in various key positions. Dr. Haran is currently serving as chair of Israel Resource Efficiency Center – a knowledge and consulting center for reducing the environmental impact of industry by streamlining raw materials, energy, water, etc. She is chair of the Weitz Center for Sustainable Development and a board member of M.A.I – a major Israeli recycling company of electrical and electronic waste as well as the Chair of the Public Safety Committee in the Prime Minister's Office. Dr. Haran previously served as Director General, Deputy Director General and Chief Scientist of Israel’s Ministry of Environmental Protection. She is currentlyProtection, as well as the Head of Ono Academic College’s MBA Program in Environmental ManagementManagement. Dr. Haran has served in numerous scientific, corporate, and is apublic organizations. She was Chair of the Israel Consumer Council, Environmental Consultant, Board memberMember of M.A.I (Electrical and Electronic Waste Recycling)The Environmental Services Company Ltd. (ESC), Board Member of BGN Technologies Ltd., and also chairpersonMember of the Weitz CenterGeneral Assembly of the Jerusalem Institute for Sustainable Development.Israel Studies. Dr. Haran was Senior Researcher at A.Y. Laboratories, Researcher at Unikoor Biotechnology, Researcher and Senior Lecturer at the Hebrew University, and Researcher at Rutgers University in Newark, New Jersey. Dr. Haran served as a Board memberan external director of the Company for Environmental Services (2008-2012) and as Chairperson of the Consumer Council (2012-2014).ICL between 2010-2018. Dr. Haran holds a B.Sc. in Natural Sciences from the Hebrew University of Jerusalem and a PhD in Organic Chemistry from Brandeis University.
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Michal Silverberg. Ms. Silverberg has served as a Managing Director at the founding partnerNovartis Venture Fund (“NVF”) since 2017. Prior to joining NVF and from 2014, Ms. Silverberg served as a Senior Partner at Takeda Ventures and, prior to that and from 2007, Ms. Silverberg worked at Novo Nordisk in roles of the accounting firm Shtainmetz Aminoach & Co. In his military service, Mr. Aminoach servedincreasing responsibility, including as Senior Director Business Development and New Product Commercialization, serving as a member of the General Staff ForumBioPharm leadership team. Since 1998, Ms. Silverberg has held positions in various sectors of the IDF, Head of Budgets atlife science industry, including in the Ministry of Defense, financial advisor to the IDF Chief of Staff and HeadOffice of the IDF Budget Division. Mr. Aminoach served as directorChief Scientist of Israel (the incubator program), venture capital (Ofer Brothers Hi Tech investing group) and global pharmaceutical and biotech companies, including various positions at Ofer Investments Ltd.MGVS Ltd., an Israeli biotech company, and as director and Chairman of the Audit Committee at Zim Ltd., of the Israel Corporation group. Mr. Aminoach also servedOSI Pharmaceuticals, Inc. in a business development role. Ms. Silverberg currently serves as a member of the Board of Governors of Hadassah Medical Center.
Shalom Shlomo. Mr. Shlomo has over twenty years of experience in various leading positions in the public and private sectors. Mr. Shlomo serves as the chairman of the Haim Avshalom Institute, since May 2023, and as a director of Ashdod Refinery Ltd., an MBAIsraeli public company, since August 2023. As part of his positions in the private sector, Mr. Shlomo provided consulting services to Israeli energy, infrastructure and telecommunications companies, among others. In addition, Mr. Shlomo served in various senior positions in the public policy, bothsector, including as the Israeli Cabinet Secretary from June 2021 until January 2023. Mr. Shlomo holds an LLB degree in law from the Hebrew University in Jerusalem.Israeli Academic Center for Law and Business.
The following table lists the names, ages and positions of our Executive Officers (who are not directors) as of the publication date of this report.Annual Report. The address for sending notices is c/o Israel ChemicalsICL Group Ltd., 23 Aranha Street, Millenium Tower, Tel Aviv, 6120201, Israel.
| Name | Age | Position |
Amir Meshulam(1) | Senior Vice President, Global Internal Auditor | |
| Anantha N. Desikan | 56 | Executive Vice President, ICL |
| 64 | Chief Financial Officer | |
| Elad Aharonson | 50 | Executive Vice President, ICL |
| Executive Vice President, Chief People Officer | ||
| Lilach Geva-Harel | 47 | EVP, Chief Legal and Sustainability Officer |
| Meir Mergi | 61 | President, Potash Division |
| Miri Mishor | 60 | Executive Vice President, Global Information Technology |
| Noam Goldstein | 63 | Executive Vice President, Chief Risk Officer, Operational Excellence, Energy Activity |
| Philip Brown | 54 | President, ICL Phosphate Specialty Solutions Division |
| Yaniv Kabalek | 49 | President, ICL Industrial Products Division |
| Uri Perelman | 43 | Executive Vice President, ICL |
| Chief |
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Raviv Zoller. Mr. Zoller has served as ICL's President and Chief Executive Officer of the Company. The date of Mr. Zoller’s assumption of office has yetsince May 14, 2018. Prior to be determined. The Company summoned a general meeting, to be held on April 24, 2018, to approve the terms of office and employment of the incoming CEO, Mr. Zoller. For further details regarding the terms of office and employment offered to Mr. Zoller, as will be brought for approval of the general meeting as aforesaid, see “Item 6 - Directors, Senior Management and Employees— B. Compensation”.
Anantha N. Desikan. Dr. Anantha Desikan was appointed Chief Innovation & Technology Officer of ICL in November 2018 and was promoted to EVP in November 2019. Dr. Desikan joined ICL in 2007 and has served in senior commercial and technology management roles including Senior Vice President of ICL Industrial Products’ Flame Retardants business (2014-2018), President, ICL-IP America (2013-2015) and VP Global Phosphorous R&D (2007-2013). Prior to joining ICL in 2007, Dr. Desikan held technology management roles at Supresta and Akzo Nobel. Mr. Desikan holds a founding partnerPh.D and M.S degree in Chemical Engineering from Clarkson University, Potsdam, New York, and a B.S. degree in Chemical Engineering from Coimbatore Institute of Apax – Mutavim Investment BankTechnology, Madras University, India.
Aviram Lahav. Mr. Lahav serves as ICL CFO since 2022. Mr. Lahav previously held several senior positions as CFO of ADAMA group, a global agro-chemical company and in 1999 founded Ness Technologies,part of Syngenta Group, and servedalso as CEO until 2007. In 2004 Ness Technologies was publicly listed on NASDAQ. Since 2008of ADAMA Agricultural Solutions. Prior to this experience, he worked at Delta Galil Industries, moving from group CFO to CEO of the US division and then to global CEO and COO. Mr. Lahav is a certified public accountant (CPA) as of 1987, holds a BA in economics and finance from the Hebrew Jerusalem University and is a graduate of the Harvard Business School Advanced Management Program (AMP).
Elad Aharonson. Mr. Aharonson has been the CEOserving as President of IDI Direct Insurance Company Ltd, a Tel Aviv Stock Exchange listed company
Ilana Fahima. Ms. Fahima serves as EVP, Chief Operating Officer. HePeople Officer, since November 2018. Prior to joining ICL, Ms. Fahima served as Vice President HR for Global Quality and Head of Israel HR at Teva Pharmaceutical Industries Ltd. Before joining Teva, Ms. Fahima held several positions at Maccabi Health Services, among them Regional HR Director and Regional Service Manager. Ms. Fahima holds a BA degree in Social Work and an MBA degree in Health Care Management, both from Ben Gurion University.
Lilach Geva-Harel. Mrs. Geva-Harel serves as EVP, Chief Legal and Sustainability Officer since February 1, 2019. Prior to joining ICL, from 2009 Mrs. Geva-Harel served as Senior Deputy to the Chief Executive Officer and Head of Investments House's Headquarters of Psagot Investment House Ltd., as well as its General Legal Counsel. Mrs. Geva-Harel was previously a Partner in the Merger & Acquisitions Department at Gross, Kleinhendler, Hodak, Halevy, Greenberg & Co. Law Offices (GKH). Mrs. Geva-Harel served as a director at REE Automotive Ltd. (NYSE: REE) a global company. Mrs. Geva-Harel holds an LLB degree and an LLM degree, both from Bar Ilan University and is a member of the BoardIsrael Bar.
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Meir Mergi. Mr. Mergi serves as President of TrusteesICL Potash Division since March 2021 (first as Acting President and starting January 2021 as President). From March 2017 to Meir served as SVP, ICL Dead Sea Operations. Prior to that Meir held the position of VP Operations in the Company's Performance Products Division, based in Germany. From 2010 to 2014, Mr. Mergi served as the CEO of the Dead Sea Magnesium and before that he held various senior positions in the operations of Dead Sea Magnesium. Meir holds a BSc degree in Materials Engineering and MBA in Business Management, both from Ben Gurion University,University.
Miri Mishor. Mrs. Mishor serves as ChairmanEVP, ICL Information Technology since 2022. Mrs. Mishor joined ICL in 1986 and served in various positions, including CIO of ICL Industrial Products, VP Information Systems of ICL Fertilizers and SVP, ICL Information Technology. Mrs. Mishor holds a B.Sc. degree in Mathematics and Computer Science and a M.Sc. degree in Industrial Management from Ben Gurion University.
Noam Goldstein. Mr. Noam Goldstein serves as ICL EVP and as ICL’s Chief Risk Officer since January 2024. In this role he is also responsible for the ICL Operational Excellence and for the ICL Energy activity. Mr. Goldstein joined ICL in 1986 and served in various positions in the Potash Division, including Vice President of Business Development, CFO in Europe, Vice President of Infrastructure, Senior Vice President Operations at ICL Dead Sea, and the president of ICL´s Potash Division and until recently as ICL EVP for Operational Excellence, Innovation & Energy. Mr. Goldstein serves as the Chair of the Be’er Sheva chess club,Chemical, Pharmaceutical, and was memberEnvironmental Industries Association of the Manufacturers Association of Israel. Mr. Goldstein holds a B.A. degree in Economics and Business Administration from the Hebrew University of Jerusalem and a M.A. degree in Economics from Ben Gurion University. Mr. Goldstein is also a graduate of the Heschel Sustainability Leadership Fellowship Program.
Philip Brown. Mr. Brown has served as the President of ICL’s Phosphate Specialties Solutions since May 2022 and as Head of ICL Americas HQs. Mr. Brown joined ICL in 2006 and served in various leading positions in ICL’s Phosphate Business, including SVP Sales and Marketing, SVP Global Operations, and VP Operations and Supply Chain. Prior to joining ICL, Mr. Brown gained broad chemical industry experience in two global companies: Celanese (NYSE: CE) and Monsanto Company (NYSE:MON). Mr. Brown currently also serves on the Board of Directors for the IsraelAmerican Chemistry SocietyCouncil (ACC). Mr. Brown holds a BS degree and ChairmanMS degree in Engineering from Texas A&M University.
Yaniv Kabalek. Mr.Kabalek has served as President of the Chemistry AssociationIndustrial Products Division since September 2022. Since 2001, Mr.Kabalek has served in several leadership positions at ICL: as Senior VP, Flame Retardants, Business Develop. & Advocacy from 2019-2022; as Senior Vice President, ICL-IP Regional Sales China/Asia & ICL Asia HQ (located in China) from 2017-2019; as Vice President, ICL-IP Regional Sales China/Asia (located in HK) from 2014-2017; as Head of Global Marketing Bromine & Isotanks from 2012-2014, as ICL-IP Global Treasury Manager from 2007-2012; and the Environmental Committee of the Israeli Manufacturers Association. In 2016as a financial analyst from 2001-2006. Mr. Grinbaum concluded his role as Chairman of the Executive Committee of Be’er Sheva Theatre. Mr. GrinbaumKabalek holds a BA degree in Mechanical EngineeringEconomics and an MBAMA degree in Business Administration, both from Ben Gurion University.
Family Relationships
There are no family relationships between any members of our executive management and our directors.directors.
Arrangements for Election of Directors and Members of Management
There are no arrangements or understandings with major shareholders, customers, suppliers or others pursuant to which any of our executive management or our directors were elected.elected.
B. COMPENSATION
DirectorsCompensation: The approval of our director’s compensation is governed by Israeli law. Under the Israeli Companies Law and regulations promulgated thereunder (collectively, the "Companies Regulations" or “Compensation Regulations”), therequirements, compensation of directors must comply with the Company's compensation policy andgenerally requires the approval of the HR & Compensation Committee, the Board of Directors and the shareholders, in that order. Generally, the approval of the HR & Compensation Committee and the Board of Directors must be in accordance with the Company’s compensation policy, except in special circumstances and subject to certain conditions, in which case the shareholder approval must be by a special majority.
Non-Executive Directors: Each of our non-executive directors (including our external directors, within the meaning of the Companies Law) are compensated in accordance with the regulations promulgated under the Companies Law governing the compensation of external directors (the “Compensation Regulations”). The CompaniesCompensation Regulations set minimum and maximum amounts of cash compensation (an annual fee and per meeting fees), depending on the sizeCompany’s shareholders’ equity. Generally, shareholder approval is not required for director compensation payable in cash (annual and per meeting fees) up to the maximum amounts set forth in Compensation Regulations.
Cash Compensation and Fees: The per meeting fees vary in accordance with the qualification of the company, or cashnon-executive directors, depending on whether the director is qualified as an “Expert Director” under the Compensation Regulations. The fees are currently as follows:
| Expert Directors | Non-Expert Director | |
| Fixed Annual Fee | ~NIS 160,000 (approximately $44,000) | |
| Per Meeting Fee | NIS 6,160 (approximately $1,672) | NIS 4,620 (approximately $1,254) |
The Company also covers and/or equity compensation at a certain ratio toreimburses its directors for expenses (including travel expenses) incurred in connection with meetings of the compensation paid toBoard of Directors and its committees or performing other directors who are not controlling shareholders or employed thereby and who are not employed byservices for the Company (collectively, "Other Directors")in their capacity as directors, in accordance with the Company's compensation policy and the Compensation Regulations. Our Board members also benefit from directors' and officers' liability insurance and indemnification and exemption arrangements entered into with them. For further information, see “Item 6 - Directors, Senior Management and Employees— C. Board Practices – Insurance and Indemnification”.
The aggregate compensation paid by us to our non-executive directors for the year ended December 31, 2023, was approximately $0.84 million. This amount includes annual and per meeting fees but does not include business travel and expenses reimbursed to directors.
ICL Group Limited 215
2023 Summary of Directors Compensation: The following table sets out the compensation earned by each individual who are employees ofserved as a non-executive director during the year ended December 31, 2023 (amounts exclude VAT):
| Non-executive Director | Fixed Annual Fee | Aggregate Per Meeting Fees | Other * | Total |
| Aviad Kaufman | NIS 160,290 (~$43,509) | NIS 136,752 (~$37,120) | - | NIS 297,042 (~$80,628) |
| Avisar Paz | NIS 160,290 (~$43,509) | NIS 125,664 (~$34,110) | - | NIS 285,954 (~$77,619) |
| Dafna Gruber | NIS 160,290 (~$43,509) | NIS 166,320 (~$45,146) | - | NIS 326,610 (~$88,654) |
| Gadi Lesin | NIS 160,290 (~$43,509) | NIS 162,624 (~$44,142) | - | NIS 322,914 (~$87,651) |
| Lior Reitblatt | NIS 160,290 (~$43,509) | NIS 170,016 (~$46,149) | - | NIS 330,306 (~$89,658) |
| Michal Silberberg | NIS 160,290 (~$43,509) | NIS 103,488 (~$28,091) | NIS 17,177 (~$4,523) | NIS 280,955 (~$76,122) |
| Dr. Miriam Haran | NIS 160,290 (~$43,509) | NIS 203,280 (~$55,178) | - | NIS 363,570 (~$98,687) |
| Ovadia Eli** | NIS 43,231 (~$11,735) | NIS 28,644 (~$7,775) | - | NIS 71,875 (~$19,510) |
| Reem Aminoach | NIS 160,290 (~$43,509) | NIS 81,312 (~$22,071) | - | NIS 241,602 (~$65,580) |
| Sagi Kabla*** | NIS 160,290 (~$43,509) | NIS 172,480 (~$46,818) | - | NIS 332,770 (~$90,326) |
| Tzipi Ozer-Armon | NIS 160,290 (~$43,509) | NIS 78,848 (~$21,402) | - | NIS 239,138 (~$64,911) |
* Includes business travel and expenses.
** Mr. Eli concluded his tenure as an ICL director on May 10, 2023.
*** Mr. Kabla, Israel Corp. do not receive additional's Chief Financial Officer, has requested that his director cash compensation for their services as directors. Instead, such fees are included in the annual management fees we paybe assigned and paid directly to Israel Corp. pursuant to our agreement with it. As of January 1, 2018, subject to approval by the general meeting of shareholders, scheduled to convene on April 24, 2018, the management fees paid to Israel Corp. will include, among other things, all compensation components, in equity (or the economic benefit thereof) and in cash, for the services of Company directors who are officers of Israel Corp.
Mr. Doppelt’s compensation terms are as follows:
| (1) | Annual cost: Annual fixed cost of employment of NIS 1.8 million (approximately $489,000). |
| (2) | Short-term incentive: Mr. Doppelt may be entitled to an annual cash bonus, in accordance with the Executive Chairman’s short-term incentive (“STI”) formula set forth in the Company’s Compensation Policy. Mr. Doppelt’s target STI, which is also his maximum STI payout in any given year, is NIS 1.2 million (approximately $331,000). For details regarding Mr. Doppelt’s STI formula, as well as for his 2023 STI payout, see below "Short-Term Incentive - The Annual Bonus Component". |
| (3) | Termination arrangement: In the event of termination of Mr. Doppelt's term of office as Executive Chairman of the Board, Mr. Doppelt is entitled to a six-month adjustment period and six-month advance notice period, during both of which he will continue to be entitled to all of his compensation terms, including STI payouts and continued vesting of his existing long-term incentive (“LTI”) plans. |
ICL Group Limited 216
| (4) | Long-term incentive: In addition, pursuant to the decision of the HR & Compensation Committee on January 31, 2022, the Board of Directors on February 6, 2022, and our shareholders at the annual general meeting held on March 30, 2022, Mr. Yoav Doppelt was awarded a three-year LTI award, for the years 2022-2024, in the form of non-marketable options, exercisable into 1,055,100 Ordinary Shares, at an exercise price of NIS 35.7 ($9.7) per share (or on a cashless basis based for a reduced number of |
Equity (LTI) Grant to each of our directors, at the amount of NIS 310,000 (excluding theExecutive Chairman of the Board Mr. Johanan Locker), who serve from time to time, for no consideration, in accordance with the Company’s Equity Compensation Plan (2014), as amended in June 2016. The shares are subject to restriction pursuant to Section 15C of the Israeli Securities Law, 5728-1968 (the “Securities Law”).Furthermore, the aforementioned authorized organs approved that the directors employed by Israel Corp. and Messrs. Ron Moskovitz and Aviad Kaufman will assign their restricted shares (or the economic benefit thereof) to Israel Corp. and that Mr. Ron Moskovitz will assign the cash compensation paid to him by the Company unto Millennium. Accordingly, 54,909 shares were allocated to Israel Corp. For further information on the fair value of the restricted shares, see Note 22 to our consolidated financial statements.
(1):
| Grant for Year | Offerree | Grant Date | Type of Equity | Dates of Governance Bodies' Approvals | Grant Value (NIS) | Amount of Options | Expiration Date |
2022-2024 | Mr. Yoav Doppelt, Executive Chairman of the Board | March 30, 2022 | Options | HR & Comp. Committee – 31.1.22 & 6.2.22 Board – 8.2.22 Shareholders (Annual GM) – 30.3.22 | 9 million (3 million per annum) | 1,055,100 | March 30, 2027 |
| Vesting Schedule | |||||||
The options will vest in three equal tranches, upon each of the three anniversaries of the grant date. Options fully accelerate if Mr. Doppelt ceases to provide services within 12 months following a change of control (other than in the event of termination for cause). | |||||||
| (1) | The equity award was granted pursuant to the Company’s Equity Compensation Plan (2014), as amended in June 2016. |
Other than the Board of Directors, respectively, and on January 10, 2018, our shareholders at the General Meeting of Shareholders, approved an equity grant for 2018, by way of allocation of 22,080 restricted shares to each of our directors (excluding theagreement with Mr. Doppelt in his capacity as Executive Chairman of the Board, Mr. Johanan Locker), who serve from timedescribed above, including the described acceleration of equity awards upon termination of his service under certain circumstances, we do not have any written agreements with any current director providing for benefits upon the termination of such directors' relationship with us.
Senior Management Compensation
Our Compensation Philosophy: The design and philosophy of our executive compensation program closely links financial performance and strategy execution resulting awards, supporting our efforts to time, for no consideration, atattract, motivate and retain the amountbrightest talent with skills across a diverse range of ILS 310,000capabilities. An emphasis on long-term incentives (equity-based compensation) focuses our executives on long-term success and aligns compensation with shareholders’ interests. The compensation structure is designed to support the delivery of financial performance while demonstrating a commitment to operating safely, reliably and in accordancea manner that is proactively consistent with the Company’s Equity Compensation Plan (2014),our Environmental, Social and Governance (ESG) commitments. ESG performance targets are regularly included as amended in June 2016. The shares are subject to restriction pursuant to Section 15Cpart of the Securities Law. With respectannual short term incentive plan of all executive officers, to Dr. Miriam Haran, whose term of office shall end in August 2018, 14,793 restricted shares were allocated, reflecting her entitlementreflect our commitment to create impactful solutions for the relative part of 2018. With respect to Messrs. Geoffrey Merszei and Yaacov Dior, whose term of office ended on February 13 and 26, 2018, respectively, no shares were allocated in the framework of this allocation. Furthermore, Messrs. Avisar Paz, Sagi Kabla and Aviad Kaufman have waived in advance their entitlement to the equity compensation approved respecting them, and were therefore not allocated shares as aforesaid.humanity’s greatest sustainability challenges. Accordingly, a total of 110,400 restricted shares were allocated to 5 directors. For further information on the fair value of the restricted shares, see Note 22 to our consolidated financial statements.
ICL Group Limited 217
The aggregate compensation amount grantedincurred to all of the members of our senior management (Global Executive Committee – GEC) as of December 31, 20172023, was approximately $10$12 million for the year 2017.
2023. This amount includes an annual provision for pension or other retirement benefits for our senior management of approximately $1 million.In 2023, the Company adopted a Compensation Recoupment Policy as required under, and in accordance with, the requirements of Section 10D of the Securities Exchange Act of 1934, as amended, and Section 303A.14 of the NYSE Listed Company Manual. Effective as of October 2, 2023, this policy requires us to reasonably promptly recover incentive-based compensation received by executive officers in the event of certain restatements of the Company’s financial statements due to material noncompliance with any financial reporting requirement under US federal securities laws. The amount to be recovered under this policy is calculated (on a pre-tax basis) based on the excess of the amount received by the executive officer over the amount that would have been received had the amount been calculated based on the restated financial statements. A copy of this policy is attached as Exhibit 4.7 to this Annual Report on Form 20-F.
The following table and accompanying footnotesnotes describe the compensations grantedcompensation incurred for the year 20172023 with respect to the five highest earning senior officers in ICL.
of ICL for such period.
| Details of the Recipient | Payments for services | |||||||||||
| Name | Position | Scope of | Base Salary | Equity based compensation (LTI)(3) (4) | Total | |||||||
| US$ | ||||||||||||
Raviv Zoller (4) | President & Chief Executive Officer | 100% | 805 | 1,157 | 668 | 1,852 | 3,677 |
Yoav Doppelt (5) | Executive Chairman of the Board | Invests significant portion of his time | 411 | 491 | 219 | 1,007 | 1,717 |
Elad Aharonson (6) | President, Growing Solutions Division | 100% | 402 | 566 | 223 | 561 | 1,350 |
Aviram Lahav (7) | Chief Financial Officer | 100% | 383 | 550 | 237 | 446 | 1,233 |
Lilach Geva-Harel (8) | EVP, Chief Legal and Sustainability Officer | 100% | 263 | 405 | 176 | 369 | 950 |
| (1) | The salary items (compensation) column set out in the above table includes all of the following components: base salary, customary social benefits, customary social and related provisions, Company car and reimbursement of telephone expenses. The compensation is in accordance with the Company's Compensation Policy. |
| (2) | The annual bonuses (STI awards) to officer holders for 2023, including the top-five earners in 2023, were approved by our HR & Compensation Committee and Board of Directors on February 11, 2024, and February 13, 2024, respectively. |
| (3) | The expense for share-based payment compensation is calculated according to IFRS and is recognized in the Company’s statement of income over the vesting period of each portion. The amounts reported in this column represent the expense recorded in the Company’s financial statements for the year ended December 31, 2023, with respect to equity-based compensation granted to the senior officer. For details regarding the Company's equity compensation plans, see Note 19 to our Audited Financial Statements. |
ICL Group Limited 218
Asher Grinbaum (5) | Acting CEO, ICL, as of September 2016 | 100% | * | 460 | 699 | 346(6) | 796 | 1,840 |
Johanan Locker (7) | Chairman of the Board as of August 2016 | 100% | * | 534 | 747 | 522(8) | 463 | 1,732 |
Eli Glazer(9) | President, ICL Specialty Solutions segment, as of February 2017 | 100% | * | 356 | 745 | 391 | 408 | 1,544 |
Charles Weidhas(10) | Chief Operating Officer (COO) as of July 2016 | 100% | * | 365 | 719 | 240 | 373 | 1,332 |
Kobi Altman(11) | Chief Financial Officer (CFO) as of April 2015 | 100% | * | 391 | 538 | 294 | 465 | 1,297 |
| Senior officer | Employment terms | |
(4) | Raviv Zoller | On April 18, 2023 and April 20, 2023, our HR & Compensation Committee and Board of Directors, respectively, approved an immaterial amendment to Mr. Zoller’s compensation terms, as included in his employment agreement from July, 2018 (and amended in July 2019) (“Mr. Zoller’s Employment Agreement”), exercising their authority as granted under Section 272(d) of the Companies Law, which permits a non-material amendment to an existing transaction solely with the approval of the Compensation Committee (the “Immaterial Amendment”) inasmuch that the amendment complies with the Company’s Compensation Policy. The Immaterial Amendment resulted in an increase of approximately 9.2% in Mr. Zoller's overall compensation terms, as December 31, 2023, are as follows: •Base salary: - Annual base salary of ~NIS 3.1 million (approximately $841,000), or - Monthly base salary of ~NIS 258,000 (approximately $70,000). •STI – Annual Bonus: Mr. Zoller’s STI target is ~NIS 3.4 million (approximately $937,000), as of December 31, 2023. Mr. Zoller’s maximum STI is ~NIS 4.4 million (approximately $1.2 million). For information regarding Mr. Zoller’s STI formula, performance and payout in 2023, see below “Short-Term Incentive - The Annual Bonus Component”. •LTI – Equity: There was no change to Mr. Zoller’s LTI component under the Immaterial Amendment. Mr. Zoller is entitled to an annual LTI (equity) grant of NIS 5.3 million (approximately $1.5 million), or any other amount per vesting annum, as determined and approved by the Company's authorized governance bodies, including by the Company's shareholders. On February 6, 2022, February 8, 2022, and March 30, 2022, our HR & Compensation Committee, Board of Directors and shareholders, respectively, approved a three-year LTI award to Mr. Raviv Zoller, for the years 2022-2024, in the form of non-marketable options, with value of NIS 5.5 million (approximately $1.5 million) per vesting annum. For details regarding Mr. Zoller's equity-based compensation grants, see Note 19 to our Audited Financial Statements; •Termination arrangements: there was no change to Mr. Zoller’s termination terms under the Immaterial Amendment, which remain as follows: - 12-months advance notice period in case of termination by the Company (not for cause) or 6-months advance notice in case of resignation; - Additional severance equal to the last base salary multiplied by the number of years that Mr. Zoller served as ICL’s President & CEO. •In accordance with Mr. Zoller’s Employment Agreement, all compensation items per Mr. Zoller’s Employment Agreement, are indexed to the Israeli Consumer Price Index (CPI). •The Immaterial Amendment complies with all of the Company's Compensation Policy requirements. •All other cash and non-cash benefits payable to our senior executives pursuant to our policies in effect from time to time, including but not limited to, pension, study fund, disability insurance, Company car, gross up, etc., as well as the exemption, insurance and indemnification arrangements applying to the Company’s office holders. |
| Senior officer | Employment terms | |
(5) | Yoav Doppelt | •For details regarding Mr. Doppelt’s compensation terms as our Executive Chairman of the Board, see above ‘Executive Chairman of the Board's Compensation’, as well as ‘Short-Term Incentive (Annual Bonus) Component‘ below. |
(6) | Elad Aharonson | •Monthly base salary: ~NIS 125,000 (approximately $34,000), as of December 31, 2023. Mr. Aharonson’s base salary may be updated twice a year according to the rise in the CPI in the months that have passed since the previous update. •2023 STI: Mr. Aharonson’s target STI is 75% of his annual base salary. For details regarding Mr. Aharonson’s STI performance and payout in 2023, see below “Short-Term Incentive Annual Bonus Component”. •LTI: The equity-based compensation amount in the above table reflects the expense that was recognized for Mr. Aharonson’s LTI in the Company’s 2023 Financial Statements. •Termination arrangements: Advance notice period of 6 months. •All other benefits customary in the Company, such as regular provisions for pension and severance, disability fund, Company car, gross up, as well as the exemption, insurance and indemnification arrangements applying to the Company’s office holders. |
(7) | Aviram Lahav | On February 14 and 16, 2023, our HR and Compensation Committee and Board of Directors, respectively, approved a change to Mr. Lahav’s compensation mix, such that as of March 2023, Mr. Lahav’s compensation terms are as follows: •Monthly base salary: ~NIS 122,000 (approximately $33,000), as of December 31, 2023. Mr. Lahav’s base salary may be updated twice a year according to the rise in the CPI in the months that have passed since the previous update. •2023 STI: Mr. Lahav’s target STI is 75% of his annual base salary. For details regarding Mr. Lahav’s STI performance and payout in 2023, see below "Short-Term Incentive Annual Bonus Component". •LTI: The equity-based compensation amount in the above table reflects the expense that was recognized for Mr. Lahav’s LTI in the Company’s 2023 Financial Statements. •Termination arrangements: advance notice period of 6-months. •All other benefits customary in the Company, such as regular provisions for pension and severance, disability fund, Company car, gross up, as well as the exemption, insurance and indemnification arrangements applying to the Company’s office holders. |
| Senior officer | Employment terms | |
| (8) | Lilach Geva-Harel | •Monthly base salary: ~NIS 82,000 (approximately $22,000), as of December 31, 2023. Mrs. Geva Harel’s base salary may be updated twice a year according to the rise in the CPI in the months that have passed since the previous update. •2023 STI: Mrs. Geva Harel’s target STI is 75% of her annual base salary. For details regarding Mrs. Geva Harel’s STI performance and payout in 2023, see below “Short-Term Incentive Annual Bonus Component”. •LTI: The equity-based compensation amount in the above table reflects the expense that was recognized for Mrs. Geva Harel’s LTI in the Company’s 2023 Financial Statements. •Termination arrangements: Advance notice period of 6 months. •All other benefits customary in the Company, such as regular provisions for pension and severance, disability fund, Company car, gross up, as well as the exemption, insurance and indemnification arrangements applying to the Company’s office holders. |
Short Term Incentive - The bonusesAnnual Bonus Component
Our Annual Short Term Incentive Plan is a key element in supporting our pay-for-performance philosophy. Each Executive Officer’s annual incentive opportunity is determined by performance in certain components, with an emphasis on key operating and financial metrics, including ESG targets.
The Annual Incentive Plan for 2023 continued to officers, includinginclude strategic metrics at both ICL and operating segment levels to measure and reward initiatives critical to the top-five earners in 2017, were approved by our HR & Compensation Committee and Boardlonger-term success of Directors on March 5 and 6, 2018, respectively. The bonuses approved are in accordance with the provisionsorganization. For most of our compensation policy.
| Year of grant | Approval dates | Offeree | Allocation date | Quantity of option warrants | Quantity of restricted shares | NIS exercise price (subject to adjustments) | Quantity of valid option warrants as at February 28, 2018 | Weighted economic value of each option warrant (4) | Fair value of restricted shares | Exercise price of option warrants | Share price | Quantity of option warrants expired as at February 28, 2018 | Notes |
| On eve of allocation (NIS) | as at February 28, 2018 (NIS) | ||||||||||||
| 2014 | Compensation Committee and Board: August 4 and 6, 2014, respectively | Asher Grinbaum(1) | September 27, 2014 | 95,129 | 22,250 | 28.71 | 95,129 | 6.57 | 28.09 | 25.6596 | 14.92 | - | Exercise price of the option warrants is 92% higher than the share price on February 28, 2018; hence the option warrants are “out of the money”. |
| Johanan Locker | NA | ||||||||||||
Eli Glazer(1) | September 27, 2014 | 45,874 | 10,730 | 28.71 | 45,874 | 6.57 | 28.09 | 25.6596 | 14.92 | - | |||
| Charles Weidhas | September 27, 2014 | 95,129 | 22,250 | 28.71 | 95,129 | 6.57 | 28.09 | 25.6596 | 14.92 | - | |||
| Kobi Altman | NA | ||||||||||||
| 2015 | Compensation Committee and Board: May 10 and 12, 2015, respectively | Asher Grinbaum(1) | July 12, 2015 | 137,363 | 23,200 | 27.76 | 137,363 | 4.55 | 26.94 | 26.1933 | 14.92 | - | Exercise price of the option warrants is 86% higher than the share price on February 28, 2018; hence the option warrants are “out of the money”. |
| Johanan Locker | NA | ||||||||||||
Eli Glazer(1) | July 12, 2015 | 66,813 | 11,284 | 27.76 | 66,813 | 4.55 | 26.94 | 26.1933 | 14.92 | - | |||
| Charles Weidhas | July 12, 2015 | 137,363 | 23,200 | 27.76 | 137,363 | 4.55 | 26.94 | 26.1933 | 14.92 | - | |||
| Kobi Altman | July 12, 2015 | 137,363 | 82,591(2) | 27.76 | 137,363 | 4.55 | 26.94 | 26.1933 | 14.92 | - | |||
| 2016 | Compensation Committee and Board: May 16 and 17, 2016, respectively. Respecting Mr. Locker, general meeting approval : August 29, 2016 | Asher Grinbaum(1) | February 14, 2017 | 114,065 | 37,592 | 17.22 | 114,065 | 5.83 | 17.69 | 16.711 | 14.92 | - | Exercise price of the option warrants is 14% higher respecting Mr. Grinbaum and 15% higher respecting all others, than the share price on February 28, 2018; hence the option warrants are “out of the money”. |
| Johanan Locker | August 29, 2016 | 186,335 | 55,215 | 17.05 | 186,335 | 4.19 | 15.42 | 16.0812 | 14.92 | - | |||
Eli Glazer(1) | June 30, 2016 | 70,911 | 55,982 | 17.05 | 70,911 | 4.83 | 16.3 | 16.2012 | 14.92 | - | |||
| Charles Weidhas | June 30, 2016 | 133,747 | 39,632 | 17.05 | 133,747 | 4.83 | 16.3 | 16.2012 | 14.92 | - | |||
| Kobi Altman | June 30, 2016 | 145,549 | 43,129 | 17.05 | 145,549 | 4.83 | 16.3 | 16.2012 | 14.92 | - | |||
| Year of grant | Approval dates | Offeree | Allocation date | Quantity of option warrants | Quantity of restricted shares | NIS exercise price (subject to adjustments) | Quantity of valid option warrants as at February 28, 2018 | Weighted economic value of each option warrant (4) | Fair value of restricted shares | Exercise price of option warrants | Share price | Quantity of option warrants expired as at February 28, 2018 | Notes |
| On eve of allocation (NIS) | as at February 28, 2018 (NIS) | ||||||||||||
| 2017 | Compensation Committee and Board: June 19 and 20, 2017, respectively. Respecting Mr. Locker, general meeting approval : August 2, 2017 | Asher Grinbaum(1) (3) | June 20, 2017 | 128,627 | 42,089 | 15.31 | 128,627 | 5.17 | 15.8 | 14.9481 | 14.92 | - | Exercise price of the option warrants is 11% higher respecting Mr. Locker and 3% higher respecting all others, than the share price on February 28, 2018; hence the option warrants are “out of the money”. |
| Johanan Locker | August 2, 2017 | 164,916 | 52,910 | 16.49 | 164,916 | 5.46 | 17.01 | 16.2282 | 14.92 | - | |||
Eli Glazer(1) | June 20, 2017 | 128,627 | 42,089 | 15.31 | 128,627 | 5.17 | 15.8 | 14.9481 | 14.92 | - | |||
| Charles Weidhas | June 20, 2017 | 128,627 | 42,089 | 15.31 | 128,627 | 5.17 | 15.8 | 14.9481 | 14.92 | - | |||
| Kobi Altman | June 20, 2017 | 128,627 | 42,089 | 15.31 | 128,627 | 5.17 | 15.8 | 14.9481 | 14.92 | - | |||
CEO STI Formula as set forth in the Company’s income statements dueCompensation Policy:
The target STI (“STI Target”) for the CEO represents the conceptual payout amount for 100% performance level (i.e., achieving weighted 100% of all targets) in a given year. The STI Target for the CEO shall not exceed 120% of the CEO’s annual base salary.
| • | STI Threshold: If either ICL adjusted operating income and/or adjusted net income actual performance, as adjusted according to the pre-defined profit adjustments list that is listed in the Compensation Policy (the “Predefined List”), will not meet the threshold performance level (60% of budget), there will be no payout for the 80% of STI that is measured against measurable financial and measurable non-financial goals. |
80% of the CEO's STI Target will be measured against the performance level of annual measurable financial and measurable non-financial goals determined by the HR & Compensation Committee and the Board of Directors at the beginning of each fiscal year, as detailed in the Compensation Policy, and including ESG targets, as detailed above.
Out of the 80% STI Target, at least 60% of the STI Target will be measured against financial goals that will be included in the annual budget. The other 20% (or less) of the STI Target will be measured against other measurable non-financial goals. The achievement level of each goal, whether measurable financial goals or measurable non-financial goals, will be measured independently of other goals, according to the aforesaid grant will be recognized overrating scale set forth in the years 2018-2021,Compensation Policy, and therefore the above table, which specifies the compensation granted in 2017then translated to payout factors. The measurable financial goals are calculated according to the Company’s top-five earners in said year does not include the aforesaid grant. Mr. Grinbaum’s equity compensation for 2018 has yet to receive final approval. Final approval thereof, together with other compensation components, will be brought for approval by the authorized Company organs andfigures from ICL's annual reports, as adjusted in accordance with law close to his retirement date, which has yet to be determined. At such time when Mr. Grinbaum’s retirement terms are brought for approval of the relevant organs as aforesaid, the Company shall issue an appropriate report and in accordance with law. furthermore, the allocation of equity compensation to Mr. Locker is made in August of each year, subject to approval of the Company organs authorized by law. At such time when Mr. Locker’s equity compensation allocation for 2018 is brought for approval of all relevant organs, the Company shall issue an appropriate report and in accordance with law.
The Annual Bonus Component
The maximum STI payout for the CEO pursuant to the Company's Compensation Policy cannot exceed, for any given year, the lower of 130% of the CEO's STI Target for such year and $1.5 million.
Mr. Zoller’s STI Target after adjustment of linkage to the CPI as per Mr. Zoller’s employment agreement, is NIS 3.4 million (approximately $937,000), as of December 2023 and his maximum STI payout is NIS 4.4 million (approximately $1.2 million).
For details regarding Mr. Zoller’s STI performance and payout in 2023, see ‘Five-highest earners STI performance and payout in 2023' below.
Executive Chairman of the Board (CoB) STI Formula as set forth in the Company’s Compensation Policy:
The STI Target for the CoB represents the conceptual payout amount for 100% performance level (i.e., achieving weighted 100% of all targets) in a given year. The STI Target for the CoB shall not exceed 120% of the CoB's annual base salary.
| • | STI Threshold: If either ICL’s adjusted operating income and/or adjusted net income actual performance, as adjusted according to the pre-defined profit adjustments list that is listed in the Compensation Policy (the “Predefined List”), will not meet the threshold performance level (60% of budget), there will be no payout under the CoB STI plan at all. |
30% of the CoB's STI Target will be measured against the performance level of ICL EBITDA; 30% against the performance level of ICL Operating Income; 20% against the performance level of ICL Net Income, and 20% against the performance level of ICL’s Revenues. These goals will be taken from ICL’s budget for the relevant fiscal year, and each will be measured as adjusted according to the rating scale set forth in the Company's Compensation Policy. Such financial goals are calculated according to the figures from ICL's annual reports, as adjusted in accordance with the Predefined List.
Mr. Doppelt’s STI Target, which is also his maximum STI payout in any given year, is NIS 1.2 million (approximately $331,000).
The maximum STI payout for the CoB shall not exceed, for any given fiscal year, the lower of 150% of the CoB's STI target and $1 million.
For details regarding Mr. Doppelt’s STI performance and payout in 2023, see ‘Five-highest earners STI performance and payout in 2023' below.
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Executive Officers STI requirements as set forth in the Company’s Compensation Policy:
With respect to our Executive Officers, other officers,than our CEO and CoB, the new Company's Compensation Policy provides that the annual bonuses may be determinedcalculated by measurable financial metrics and/or measurable non-financial metrics, as pre-determined by our HR & Compensation Committee and Board of Directors, by means of financial indicators and/or coefficients of meeting measurable targets (KPIs) and/or a qualitative evaluation.
The annual bonus to Mr. Weidhas was calculated according tomaximum STI payout for an Executive Officers, other than the Annual Bonus Calculation Formula as aforesaid. The outcomeCEO and Executive Chairman, shall not exceed, for any given fiscal year, the lower of multiplying Mr. Weidhas' target bonus with ICL's financial factor (70%) was updated according to a good satisfaction225% of his KPIsthe Executive Officer’s STI Target for such year and to a qualitative evaluation of his performance.$1 million.
Five-highest earners STI performance and payout in 2023(2)
| Executive Office | Annual Base (1) | STI Target % | STI Target | Overall score of % target (3) | 2023 STI Payout |
| Raviv Zoller | NIS 3.1 million (~$0.84 million) | NA(4) | NIS 3.4 million (~$0.94 million) | 71.5% | NIS 2.4 million (~$0.67 million) |
| Yoav Doppelt | NIS 1.5 million (~$0.41 million) | NA(5) | NIS 1.2 million (~$0.33 million) | 66.2% | NIS 0.8 million (~$0.22 million) |
| Elad Aharonson | NIS 1.5 million (~$0.41 million) | 75% | NIS 1.1 million (~$0.3 million) | 71.9% | NIS 0.8 million (~$0.22 million) |
| Aviram Lahav | NIS 1.5 million (~$0.41 million) | 75% | NIS 1.1 million (~$0.3 million) | 78.2% | NIS 0.9 million (~$0.24 million) |
| Lilach Geva Harel | NIS 1 million (~$0.27 million) | 75% | NIS 0.7 million (~0.19 million) | 87.2% | NIS 0.6 million (~$0.18 million) |
| (1) | The Annual Base amounts are as of December 31, 2023. |
| (2) | The adjustments to the Company’s annual net and operating income, as specified in “Item 3 – Key Information – A. Selected Financial Data", for purposes of calculating the STI Threshold (as defined above) and for purposes of calculating the measurable financials goals for the CEO and the CoB, adhere to the Predefined List outlined in the Company's Compensation Policy, excluding the adjustment pertaining to charges related to the security situation in Israel, which was not adjusted for the above purposes. Consequently, the adjusted net and operating income for the above STI purposes is lower than the adjusted net and operating income, as reported. |
| (3) | For all executive officers, other than Mr. Doppelt who has a different formula as set forth above, this column represents the weighted % score of the measurable financial and non-financial goals (including ESG targets) and qualitative evaluation. |
| (4) | Mr. Zoller's STI Target was determined in Mr. Zoller's Employment Agreement as a nominal number only (linked to the CPI). |
| (5) | Mr. Doppelt's STI Target (being also his maximum STI potential) per his employment agreement is set as a nominal number only of NIS 1.2 million (approximately $331,000). |
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C. BOARD PRACTICES
Board of Directors
According to our Articles of Association, we must have no less than seven and no more than twenty directors.directors on our Board of Directors (including our external directors). Our directors (other than our external directors) are normallytypically elected by our shareholders at our annual meeting.general meeting of shareholders. Our Board of Directors is also authorized to appoint directors in order to fill vacancies or for any other reason. Each of our directors, other than our external directors, serves from the date of election or appointment until our next annual meeting of the shareholders. According to our Articles of Association, athe majority of the membersour Board of our BoardDirectors must be both citizens and residents of Israel. The approval of at least a majority of the voting rights represented at a shareholders’ meeting and voting on the matter is generally required to remove any of our directors from office (other than external directors as detailed below).
As of the date of this Annual Report, our Board of Directors consists of ninetwelve directors. In the event of equal votes of our Board of Directors, our Chairman of the Board has the right to cast the deciding vote. Mr.
Dr. Miriam Haran and Ms. Dafna Gruber serve as “external directors” according to the Companies Law. Messrs. Lior Reitblatt, is anGadi Lesin and Shalom Shlomo and Ms. Tzipi Ozer Armon qualify as independent director,directors, as defined in the Israeli Companies Law, 5759-1999 (the “Companies Law”). Board membersLaw. Mses. Tzipi Ozer Armon, Miriam Haran,, Ruth Ralbag, Dafna Gruber and Michal Silverberg, as well as Messrs. Reem Aminoach, and Lior Reitblatt, areGadi Lesin and Shalom Shlomo qualify as independent directors under the rules applicable to U.S.US companies listed on the NYSE. Board members Messrs. Johanan Locker, Avisar Paz,Yoav Doppelt, Aviad Kaufman, Sagi Kabla and Ovadia EliAvisar Paz are not considered independent directors by virtue of the positions they hold, or previously held, with our controlling shareholder or with the Company. Dr. Miriam Haran and Ms. Ruth Ralbag are “external directors” according to the Companies Law.shareholder's group. We do not have service contractsagreements with our current directors, excluding our Executive Chairman of the Board, Mr. Johanan Locker.Yoav Doppelt.
Board Composition
The Company's Board of Directors has adopted an outline for institutionalizing and improving the structure and composition of the Board of Directors, reflecting, among other things, the Company's ambition to maintain a diverse composition of its board of directors, which represents diverse backgrounds, expanding skillsets and experience, and encompasses a wide range of special expertise, such as high-level managerial experience in a complex organization; strong global experience; skills and experience in dealing with complex issues; experience with strategy setting; experience in managing global businesses, working with emerging markets and business development experience in high-volume businesses; experience in corporate governance, sustainability and environmental expertise, risk management and regulation, and gender diversity. The aforementioned outline also includes guiding principles for the appointment of external directors in the Company. In addition, the Company strives to have a board of directors comprised of directors with the following expertise: industry expertise; corporate governance expertise; environmental, biodiversity and climate expertise; logistics and operational expertise; safety expertise, etc. Accordingly, the Company strives to integrate within its board, directors with expertise in such areas, whether with new appointments or upon replacement of a director's vacant position.
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Board Effectiveness Review
Our Board of Directors is committed to continuous improvement and recognizes the fundamental role a robust Board of Directors and committee evaluation process play in ensuring that our Board of Directors maintains optimal composition and functions effectively. In the annual self-evaluation process, the members of the Board of Directors conduct a confidential oral assessment of the performance, risk oversight and composition of the Board and its committees, as relevant. As part of the evaluation process, the Board of Directors reviews the effectiveness and overall composition of the Board of Directors, including director tenure, board leadership structure, diversity and skill sets, the quality and scope of the materials distributed in advance of meetings and the board's access to Company executives and operations, to ensure the Board of Directors serves the best interests of shareholders and positions the Company for future success. After the evaluations, the board and committees, in conjunction with the corporate secretariat function, work to improve upon any issues presented during the evaluation process and to identify opportunities that may lead to further improvement. While this formal self-evaluation is conducted on an annual basis, the evaluation process is an ongoing process throughout the year. Directors continuously share their perspectives, feedback, and suggestions throughout the year, whether during the board’s executive sessions or otherwise.
New Directors On-boarding & Directors' Trainings
The Company has a tailored and robust onboarding program for new directors, aimed to familiarize the new directors with key topics, such as the board’s structure, governance and responsibilities, the Company’s organizational structure, the Company’s strategic objectives and key performance indicators (KPIs), the Company’s business environment and market overview, financial reporting and legal proceedings. The program is formalized and tailored to take into account the unique backgrounds, experiences and expected committee responsibilities of each new director. The program includes an educational overview of the Company's public disclosures, including website, regulatory filings, governance documents. investor presentations, annual and long-term budget materials. In addition, we schedule meetings for the new directors with other directors, key executives and business leaders to gain business insights about the Company, and the culture of the board and how it operates. Additional onboarding activities (such as site visits) are calendared throughout the year to foster an ongoing onboarding program.
The board operates according to annual and long-term plans, which include, among other things, trainings on various issues (such as climate change, sustainability, governance, compliance, HR & people trends, etc.), in addition to educational sessions on the business environment, our products, competition view, compliance, and other topics.
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External Directors
As a public Israeli company, we are required by the Israeli Companies Law to have at least two external directors who meet certain independence criteria to ensure that they are not related parties to the Company or to our controlling shareholder. The definition of an “external director” or "independent director" under the Companies Law and the definition of an “independent director” under the NYSE rules are very similar, and thus, that we would generally expect a director who qualifies as one to also qualify as the other. However, since the definitions provided in Israeli law and U.S.US law are not identical, it is possible for a director to qualify as one but not necessarily as the other.
An external director is required to have either financial and accounting expertise or professional qualifications, as defined in the relevant regulations promulgated under the Companies Law, and at least one of the external directors is required to have financial and accounting expertise. Our external director,directors, Ms. Ruth Ralbag, hasDafna Gruber and Dr. Miriam Haran, have financial and accounting expertise as defined in the Regulations.such regulations. An external director is entitled to reimbursement of expenses and compensation as provided in the Compensation Regulations promulgated under the Companies Law but is otherwise prohibited from receiving any other compensation from us, directly or indirectly, during his or her term of office and for two years thereafter.
Under the Companies Law, external directors must be elected at a shareholders’ meeting by a simple majority of the votes cast, provided that anyeither of the following conditions is met: that(i) such majority includes a majority of the votes cast by non‑controlling shareholders and shareholders who do not have a personal interest in the election (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder), excluding abstentions, or that(ii) the votes cast by suchnon-controlling shareholders and shareholders who do not have a personal interest in the election opposing the election (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder) did not exceed 2% of our aggregate voting rights. Generally, external directors may serve for up to three terms of three years each, and as a company whose shares are traded on the NYSE, our Audit and Accounting Committee and Board of Directors may nominate themexternal directors for additional three-year terms under certain circumstances.circumstances for election by the shareholders by the same majority required for election of an external director as described above. Even if an external director is not nominated by our Board of Directors for reelection for a second or third term, an external director may be nominated for reelection for up to two additional three year terms, by (i) one or more shareholders holding at least 1% of our voting rights have the right to nominate(provided the external director foris not an "affiliated or competing shareholder", or a relative of such a shareholder, at the time of the appointment, and is not "affiliated" with such a shareholder at the time of the appointment or within the two years preceding the date of appointment, as such terms are defined in the Companies Law). In such circumstances, the reelection and in addition,of the external director may nominate himself for reappointment. In such a case, the reelection can be approved withoutrequires the approval of our controlling shareholder if it is approvedshareholders by a majority of the votes cast by non‑controlling shareholders and shareholders who do not have a personal interest in the election (excluding a personal interest that did not result from the shareholder’s relationship with the controlling shareholder)shareholder and excluding abstentions) and the votes cast by such shareholders approving the electionreelection must exceed 2% of our aggregate voting rights.rights; and (ii) the external director him or herself, in which case the election by the shareholders is by the same majority required for the initial election of an external director, as described above. The term of office of an external director may be terminated prior to expiration only by a shareholder vote, by the same threshold required for election, or by a court, but in each case only if the external director ceases to meet the statutory qualifications for election or if the external director breaches his duty of trust to us.
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Under the Companies Law, each committee of the Board of Directors that exercises power of the Board of Directors must include at least one external director and all external directors must be members of the Company’s Audit Committee and Compensation Committee, as further detailed below.Committee.
As of the date of this report,Annual Report, we have two external directors: Dr. Miriam Haran, whose thirdfirst three-year term commenced on August 29, 2015,July 14, 2021, and Ms. Ruth Ralbag,Dafna Gruber, whose first three-year term commenced on January 10, 2018. On February 26, 2018, Mr. Yaacov Dior ceased serving as an external director of the Company, after completing two three-year terms in the Company.27, 2022.
Financial Experts
Our Board of Directors has resolved that at least three of its members must have financial and accounting expertise, as thissuch term is defined in the Regulationsregulations promulgated under the Companies Law. Our Board of Directors has further determined, that, based on qualification statements delivered to the Company, seventhat ten out of our ninetwelve serving directors meet the saidsuch financial and accounting expertise requirements. For further details, see “Item 6 - Directors, Senior Management and Employees — A. Directors and Officers.”
In addition, our Board of Directors has determined that all members of our Audit and Accounting Committee are financially literate for purposes of meeting the NYSE rules and that Ms. Ralbag and Mr. Reitblatt are qualified to serve as “Audit Committee Financial Experts”“audit committee financial experts” as defined by SEC rules.
Alternate Directors
Our Articles of Association, consistent with Israeli law, provide that any director may appoint another person who is not a director or serving as an alternate director (or, in the case of an alternate director for a member of a committee of the Board of Directors, another director, provided the alternate director does not serve as a member of such committee) to serve as hishis/her alternate director, subject to the approval of the Board of Directors. A person who is not qualified to be appointed as an independent director, pursuant to the Companies Law, may not be appointed as an alternate director of an independent director qualified as such under the Companies Law. The term of an alternate director can be terminated at any time by the appointing director or the Board of Directors and automatically terminates upon the termination of the term of the appointing director. The Companies Law stipulates that an external director may not appoint an alternate director except under very limited circumstances. An alternate director has the same rights and responsibilities as a director, except for the right to appoint an alternate director. No alternate director was appointed during the reported period.period.
Our Board Committees
Our Board of Directors has established the following Committees,committees, which operate in accordance with written charters or procedures that set forth, among other things, such committee’s structure, manner of operations, qualification and membership requirements, responsibilities and authority of the committee, etc.authorities.
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Audit and Accounting Committee (Statutory Committee)
Members
Dafna Gruber (Chair)
Dr. Miriam Haran
Lior Reitblatt
Gadi Lesin
Under the Companies Law, the Board of Directors of a public company must establish an Audit Committee. The Audit Committee must consist of at least three directors who meet certain independence criteria and must include all of the Company’s external directors. The ChairmanChair of the Audit Committee is required to be an external director. The responsibilities of an Audit Committee under the Companies Law include identifying and addressing flaws in the business management of the Company, reviewing and approving interested party transactions, establishing whistleblower procedures, overseeing the Company’s internal audit system and the performance of its Internal Auditor, and assessing the scope of the work and recommending the fees of the Company’s independent accounting firm. In addition, the Audit Committee is required to review and determine whether certain actions and transactions with a controlling shareholder of a company officer are “material” or “extraordinary” according to the approval procedures required under the Companies Law and company procedures.
Main Responsibilities
Identifying and that Ms. Ralbagaddressing flaws in the business management of the Company.
Review and Mr. Reitblatt are qualifiedapprove interested party transactions; determine criteria for classification and approval of interested party transactions.
Establishing whistleblower procedures.
Overseeing the Company’s internal audit system and the performance of its internal auditor.
Appointment, compensation, oversight and scope of work assessment of the Company’s independent accounting firm.
Monitoring ICL’s financial statements and the effectiveness of its internal controls.
Ensure the Company’s compliance with legal and regulatory requirements and adherence to serve as “audit committee financial experts” as defined by SEC rules.corporate governance best practices.
Overseeing ICL’s risk management, including monitoring the activities to manage and mitigate the identified risks.
Human Resources and& Compensation Committee (Statutory Committee)
Members
Dr. Miriam Haran (Chair)
Dafna Gruber
Lior Reitblatt
Under the Companies Law, the Board of Directors of a public company must establish a Compensation Committee. The Compensation Committee must consist of at least three directors who meet certain independence criteria and include all of the Company’s external directors, who are required to constitute a majority of its members. The ChairmanChair of the Compensation Committee must be an external director. The members of the Compensation Committee are remunerated for their service in accordance with the regulationsCompensation Regulations governing the compensation of external directors. The responsibilities of a Compensation Committee under the Companies Law include: recommending to the Board of Directors a policy governing the compensation of company officers based on specified criteria, recommending to the Board of Directors, from time to time, to update such compensation policy and reviewing its implementation; deciding whether to approve transactions respecting the terms of office and employment of officers which require approval by the compensation committee, including exemption from approval by the General Meeting, in accordance with the provisions of the Companies Law.
Main Responsibilities
Recommending to the Board of Directors a policy governing the compensation of officers and Public Affairsdirectors based on specific criteria.
Recommending to the Board of Directors, from time to time, updates to such compensation policy.
Reviewing the implementation of such compensation policy.
Deciding whether to approve transactions with respect to terms of office and employment of officers and directors (which require approval by the compensation committee under the Companies Law).
Approving, under certain circumstances, an exemption from shareholder approval of the compensation terms of a candidate for chief executive officer (who meets certain non-affiliation criteria, in accordance with the provisions of the Companies Law).
Overseeing the Company’s bonus and equity plans.
Overseeing evaluation of top management and employees.
Overseeing succession planning.
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Climate, Sustainability & Community Relations Committee
Members
Dr. Miriam Haran (Chair, Environmental Expert)
Reem Aminoach
Sagi Kabla
Gadi Lesin
Our Environment, SafetyClimate, Sustainability and Public AffairsCommunity Relations Committee is not a statutory committee and is designed to assist our Board of Directors in fulfilling its responsibilities respecting oversight of our environment and safety policies and programs, our community outreach programs and public relations and advocacy. Our Environment, Safety and Public Affairs Committee is not authorized to exercise any power of our Board of Directors. It consists of four directors: Mr. Reem Aminoach (Chairman), Dr. Miriam Haran, Mr. Ovadia EliDirectors and Mr. Sagi Kabla.has advisory authority only.
Overseeing ICL’s climate, sustainability, safety, environment and water management related risks and opportunities, targets, policies and programs.
Overseeing ICL’s community outreach programs, public relations and advocacy.
Overseeing diversity and inclusion aspects in the Company.
Financing Committee
Members
Sagi Kabla (Chair)
Aviad Kaufman
Avisar Paz
Dafna Gruber
Our OperationsFinancing Committee is not a statutory committee and is designed to assist our Board of Directors in fulfilling its responsibilities with respect to our equity management, business operations and strategy implementation, including reviewing M&A transactions and research and development strategy. Our Operations Committee is not authorized to exercise any power of our Board of Directors. The committee consists of six directors: Mr. Johanan Locker (Chairman), Mr. Avisar Paz, Mr. Sagi Kabla, Mr. Ovadia Eli, Mr. Reem AminoachDirectors and Mr. Lior Reitblatt.
Overseeing ICL’s financing and equity management and operations, including loans, equity offerings, hedging, debt and other financing vehicles. Our Financing Committee is not authorized to exercise any power of our Board of Directors. As of the date of this report, the Committee consists of three directors: Mr. Avisar Paz (Chairman), Mr. Sagi Kabla and Mr. Aviad Kaufman.
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Board and Committees attendance in 2023
| Organ Name | Number of Meetings in Reported Year | Average Attendance |
| Board of Directors | 18 | 97% |
| Audit & Accounting Committee | 10 | 100% |
| Human Resources & Compensation Committee | 6 | 100% |
| Climate, Sustainability & Community Relations Committee | 5 | 95% |
| Financing Committee | 4 | 88% |
Internal Auditor
Under the Companies Law, a Company’sthe Board of Directors of a public company is required to appoint an Internal Auditorinternal auditor pursuant to the recommendation of the Audit Committee. The role of the Internal Auditorinternal auditor is to examine, among other things, whether the Company’s actions comply with applicable law, companyCompany procedures and proper business procedures. Under the Companies Law, the Internal Auditorinternal auditor may not be an interested party (as defined in the Companies Law), a director or an officer of the company,Company, or a relative of any of the foregoing, nor may the Internal Auditorinternal auditor be the company’sCompany’s independent accountantauditor or a representative thereof. The Chief Internal Auditor
As of the date of this Annual Report, our internal auditor is Mr. Amir Meshulam, a certified public accountant in Israel. Mr. Meshulam holds an LLB degree from the College of Management and is a member of the Israel Bar. Mr. Meshulam’s education, skills and experience were among the Board of Directors’ considerations in approving the appointment. Mr. Meshulam has served in this position since August 2018. Mr. Meshulam is a Company employee, and reports to the Executive Chairman of the Board of Directors.
Our internal auditor oversees the work of various internal auditors acting on his behalf throughout the organization. As
Our internal auditor acts in accordance with the defined Internal Audit Charter and is obligated to comply with internal auditors' standards. Mr. Meshulam holds periodic meetings with the Audit Committee, without management present, as often as deemed necessary, and at least once a year. In addition, the Internal Auditor holds monthly meetings with our Executive Chairman of the timeBoard and with the Chairman of this report, our Chief Internal Auditorthe Audit Committee.
The internal audit's annual and multi-year work plans are risk-based plans. They have been designed based on a global risk assessment, and were examined against industry standards and benchmarks. The audits of all the operational sites are performed every 3 years, including examination of various risk areas, such as ethics and compliance, environmental, operational, safety and procedures. The plans are reviewed and approved by the Audit Committee and the Board of Directors. In addition, a high-level risk assessment is Mr. Shmuel Daniel, whocarried out annually and the audit plan is a certified Internal Auditorreassessed and certified public accountant in Israel. The chief internal auditor has served in this position since August 1, 2014.approved.
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Insurance and indemnification
The Company, with the approval of the AuditHR & Compensation Committee, the Board of Directors and the General Meeting of the shareholders, granted its officers anand directors a letter of exemption and letters of indemnification, and also hasmaintains an insurance policy covering directorsdirectors' and officers.officers' liability, which is renewed annually. The directors' and officers' liability insurance and the exemption and indemnity undertaking do not apply to those cases specified in Section 263 of the Israeli Companies Law. The exemption relates to damageis from liability for damages caused and/or that will be caused, by those officers and directors as a result of a breach of the duty of care to the Company. Regarding directors who are office holders of Israel Corp., who may serve from time to time, in January 2021, the shareholders approved to extend the period for exemption and indemnification entered into with such office holders, for an additional nine years, commencing November 30, 2020, provided that the exemption shall not apply to liabilities arising in connection with a transaction or resolution in which a controlling shareholder or an office holder, including an office holder who is other than the office holder party to the agreement, has a personal interest (within the meaning of the Companies Law). The amount of the indemnification payable by the Company under the letterletters of indemnification, in addition to amounts received from an insurance company, if any, for all of the officers and directors on a cumulativean aggregate basis, for one or more of the events detailed therein, is limited to $350$300 million. The insurance is renewed annually.
The Company’s directors’ and officers’ liability insurance policy was renewedpolicies include a two-tier coverage for an additional year beginning on January 1, 2018,directors’ and until December 31, 2018. The renewed insurance policy was approved by our shareholders at the general meetingofficers’ liability, comprising of our shareholders, as a three-year framework resolution, on September 14, 2017, after approval by our Audit and Finance Committee and Board of Directors. The insurance policy includes a joint primary tier with Israel Corp. with a joint liability cap of up to $20 million, and a separate tier covering the Company alone, with a liability cap of up to $200 million, for a total liability limit of $220 million for both tiers. Under the terms of the framework resolution, ouralone. Our directors and officers are beneficiaries of both tiers.
The Company's directors’ and officers’ liability insurance policy provides the division of the premium amount between the Company and Israel Corporation in the joint tierfor 2023 was set, so that 70% will be paidapproved by the Company and 30% by the Israel Corporation,Company's authorized organs in March 2023, in accordance with the termsIsraeli Companies Regulations (Relief in Transactions with Interested Parties), 5760-2000 (the “Relief Regulations”) and the Company’s Compensation Policy for Office Holders (the “Compensation Policy”), and was in effect until March 2024. The 2023 directors’ and officers’ liability insurance policy included a liability limit of $200 million (comprised of a limit of $40 million joint tier with Israel Corp. and additional Side A coverage (directors and officers only) of $160 million for the framework resolutionCompany only). As part of
In February 2024, the said approvals, a total annual premiumCompany's directors’ and officers’ liability insurance policy for 2024 was also approved at the amount of $900,000, which will be paid by the CompanyCompany's authorized organs, in respect ofaccordance with the aforementioned policyRelief Regulations and does not exceed the maximum premium amount specified in the framework resolution. The terms of the new policy adhere to the terms of the framework resolution and of the Company's Compensation Policy. The coverage in effectPolicy, effective as of March 2024. The 2024 directors’ and officers’ liability insurance policy includes a liability limit of $200 million for both tiers (comprised of a limit of $40 million joint with Israel Corp. and additional Side A coverage (directors and officers only) of $160 million for the date of this report (including a shared tier with the parent company of up to $20 million) is at an aggregate amount of $220 million.Company only).
Other Information
We didhave not engageengaged in any arrangements with directors providing for benefits upon termination of employment, with the following exception: in caseIn the event of termination of employer-employee relations, Mr. Johanan LockerYoav Doppelt's term of office as Executive Chairman of the Board, he will be entitled to a bonus at an amount equal two times his last monthly salary, multiplied by the numbersix-month adjustment period and six-month advance notice period, during both of which he will continue to be entitled to all of his yearscompensation terms, including STI payouts and continued vesting of service as ICL’s Executive Chairman of the Board.his existing LTI plans.
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D. EMPLOYEESHuman Capital
At ICL, we acknowledge that our people are fundamental to our success. We strive to create an inclusive, global company culture in which we attract, develop, and retain high performing, engaged, and diverse talent to deliver on our business strategy.
We strive to unite our employees towards the common goal of creating impactful solutions for humanity’s greatest sustainability challenges. We are committed to making a positive impact in the worlds of food, agriculture, and industrial products, and advancing humanity for a sustainable future. We do so in alignment with our three core values: Ingenuity, Care, and Leadership.
Breakdown of Employees by Segments
2023 | 2022 | 2021 |
| Essential Minerals | 7,642 | 8,002 | 8,368 | |||
| Specialty Solutions* | 3,706 | 3,957 | 4,173 | |||
| Phosphate Solutions | 3,970 | 3,961 | 4,608 | |||
| Growing Solutions | 3,630 | 3,792 | 2,406 | |||
| Potash | 2,092 | 2,120 | 2,498 | |||
| Industrial Products | 1,615 | 1,624 | 1,595 | |||
| Global functions and headquarters | 1,279 | 1,555 | 1,509 | 1,243 | 1,236 | 1,162 |
Sub Total | 12,550 | 12,733 | 12,269 | |||
| Temporary employees | 800 | 886 | 964 | |||
| Total employees | 12,627 | 13,514 | 14,050 | 13,350 | 13,619 | 13,233 |
Geographic Breakdown of Employees
2023 | 2022 | 2021 |
| Israel | 4,548 | 4,534 | 4,462 |
| China | 1,984 | 1,999 | 1,977 |
| Brazil | 1,637 | 1,711 | 1,644 |
| Spain | 918 | 940 | 872 |
| USA | 820 | 830 | 772 |
| UK | 705 | 715 | 676 |
| Germany | 704 | 717 | 670 |
| Netherlands | 580 | 612 | 578 |
| France | 126 | 127 | 122 |
| All other | 528 | 548 | 496 |
Sub Total | 12,550 | 12,733 | 12,269 |
| Temporary employees | 800 | 886 | 964 |
Total employees | 13,350 | 13,619 | 13,233 |
| Israel | 4,673 | 4,861 | 4,812 |
| China | 2,413 | 2,816 | 3,057 |
| Spain | 1,281 | 1,294 | 1,300 |
| Germany | 1,012 | 1,157 | 1,170 |
| UK | 836 | 827 | 1,162 |
| USA | 817 | 895 | 1,011 |
| Netherlands | 593 | 639 | 576 |
| Brazil | 280 | 264 | 249 |
| France | 125 | 127 | 120 |
| Other | 597 | 634 | 593 |
| Total employees | 12,627 | 13,514 | 14,050 |
As at December 31, 2017,a result of these adjustments, recruitment slowed along with the Company’s workforce comprisedrate of 12,627 employees compared to 13,514 employees as at December 31, 2016 –growth, which resulted in a decrease of 887 employees. The said decrease derives mainly from amoderate decrease in the number of employees in several regions around the joint ventureworld.
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Employer of Choice
At ICL, we believe that engaged and effective employees are key to our success. We strive to continue to be an Employer of Choice (EoC) and a favorable place to work in China (YPH),every region in Israel, mainlywhich we operate. Towards this goal, we conduct an annual survey to assess our strengths and areas of opportunity, we measure our progress, and define concrete action plans to strengthen our position as an EoC. The surveys consistently show that our employees are proud to work at ICL, are engaged and motivated, and would recommend ICL as a good place to work. Our overall average engagement and enablement scores are above high performing as well as manufacturing and hi-tech norms. In 2023 ICL continued to receive global acknowledgement that ICL is a great place to work.
Talent Management
We believe in empowering employees to grow and develop. Our approach to career development is personalized – it includes ongoing dialogue regarding performance, understanding career aspirations, access to an advanced digital learning experience platform, an internal portal to explore job opportunities, and more. With a skills-based approach to development, employees are empowered to build a well-rounded skill set that will contribute to their overall professional growth and success, not just for a specific role. We encourage employees to further develop themselves and achieve their career aspirations, which, in turn, drives our overall success.
Leadership
In an era defined by disruption and rapid change, effective leadership has become crucial. We have embarked on a leadership development journey with the goal of creating a culture of leadership for all.
In 2023 we invested in the companies Bromine Compounds Ltd.leadership development of one of the most critical layers of the organization – middle management – through our Rise program. The purpose of the program is to enhance the leadership capabilities and Rotem Amfert Negev Ltd., andmindset of middle managers through a global development experience aligned with ICL’s leadership model to strengthen middle management’s sustainable impact in Germany, mainly in BKG.an increasingly disruptive world.
We believe in encouraging and Temporary Employeesenabling continuous, lifelong learning, and empowering individuals through self-directed, personalized learning.
ICL employees in Israel are employed under collective or individual employment agreements.offers a wide range of learning programs both online and in-person, to meet the diverse needs of our employees. ICL has implemented Degreed, a digital learning experience platform, that is called internally WeGrow@ICL. The collective bargaining agreements are signed for specified termsdigital platform includes open source, curated learning content that is powered by artificial intelligence and are renewed from timeaims to time. By law, in the event that a new collective bargaining agreement is not signed, the terms of the original agreement are extended for an unlimited period, unless one party gives notice to the other of its cancellation. As at the date of this Annual Report, no notice of cancellation had been given for any of the collective bargaining agreements currently in effect at ICL.support continuous learning and skill development.
ICL Rotem, Fertilizersencourages employees to leverage WeGrow@ICL to be curious, discover, and Chemical Materials Ltd. (“FCM”), Dead Sea Magnesiumshare learnings. We have various professional academies such as Agronomy, Innovation, Operational Excellence, Sales, Human and Bromine Compounds have collective bargaining agreements with termination dates ranging from January 2017 (an agreement that has not yet been renewed) up to 2022. The work agreement at ICL Dead Sea expired in September 2015,Organizational Performance (HOP) and atmore. In addition, the present time, negotiations for its renewal are underway.skills profile feature provides real-time insights about our workforce including role-based skills, personal skills, and company-wide skills.
In 2017,an increasingly dynamic and disruptive world, operating in silos has become a liability. The next frontier of value creation for businesses is partnership. The year 2023 was the Company expanded assimilationyear of Partnership at ICL. Our annual themes are a way for us to strengthen a specific capability and embed that capability more fully the Company's culture and day-to-day operations. Partnership is deeply rooted in our core values and key to our ability to amplify our impact globally.
Employee Experience & Wellbeing
In today's business environment, characterized by accelerating turbulence and disruption, employee experience and wellbeing have become more important than ever. Our goal is to create a positive, meaningful, healthy, and productive environment for employees throughout their tenure with the organization.
In 2023, we established an Employee Experience Center of Excellence to enable us to design positive experiences at pivotal, key moments that matter to employees. The results of our Employer of Choice survey provide us with valuable information regarding employee engagement and enablement that will help us improve the overall employee experience. In addition, we are evaluating the integration of Artificial Intelligence technologies (AI) into our people practices simplifying processes, automate workflows, innovate, and improve the overall employee experience.
Promoting Diversity, Inclusion & Belonging (DIB)
At ICL, Diversity means understanding, accepting, and valuing differences between people, including those of different races, nationalities, religions, gender, ages, disabilities, sexual orientations, and ethnicities, and those with differences in education, personalities, life experiences and knowledge base. Inclusion means welcoming and embracing colleagues who look, act, and think differently. It means a collaborative, supportive and respectful environment that increases the participation and contribution of all employees. Inclusion is ICL’s attempt to welcome and acknowledge what makes each of its employees unique. We view Belonging as a human need. At ICL, we understand that we are compelled to belong and that we are compelled to belong in our own unique way.
With All our Differences, Becoming Stronger Together
As part of our Employer of Choice journey, we conducted a global survey to measure employee engagement and enablement, and we have committed to becoming a more inclusive and attentive organization.
One of the performance management infrastructurekey milestones in this important journey is committing to ICL’s Diversity and human resources management. InInclusion (D&I) policy, first formulated in 2020, that will strengthen ICL’s direction and provide a measurement in this context,area.
As an integral part of ICL’s journey toward becoming an Employer of Choice, the Company is assimilatingdeeply committed to fostering a uniform technological infrastructuremore diverse, inclusive, and attentive organizational culture. In pursuit of this goal, a Global ICL Diversity, Inclusion, and Belonging (DIB) Officer was appointed in 2020. This role carries the responsibility of fortifying the Company's foundation by cultivating a DIB culture and enhancing ICL’s DIB measures.
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The Diversity, Inclusion and Belonging at ICL consists of 5 pillars strategy:
Pillar 1: Take a Stand
Executives play a critical role in supporting DIB in the workplace, making this pillar a fundamental part of our strategy.Senior leadership is responsible for managingsetting the tone and direction of Company culture, policies, and practices, and can make or break the success of DIB at an organizational level. ICL’s senior leadership are excited about and supportive of our DIB initiatives and demonstrate their contribution and personal commitment. With our executives leading by example, they send the message that DIB work is valued, critical, and essential for our success.
Pillar 2: Hold up a Mirror
Without transparency commitment is nothing more than words. When an organization publicly reports its diversity and inclusion metrics, it becomes more accountable to its employees, customers, and other stakeholders. This transparency can encourage an organization to take concrete actions to improve its DIB efforts. Data-driven decision-making is essential for effective DIB strategies. By having accurate statistics, ICL can make informed decisions about where to allocate resources, which programs to implement, and how to address specific challenges faced by underrepresented groups.
Bloomberg’s Gender-Equality Index
Since 2019, ICL has been steadfast in its commitment to gender equality, actively participating in Bloomberg’s Gender Reporting Framework (“GEI framework”). This global standard assesses our progress in achieving equal gender representation across organizational levels, commitment to gender equality goals, and the implementation of policies to alleviate familial stresses' impact on the workplace The framework also evaluates our efforts in making a positive impact on women beyond the employee base. Emphasizing transparency, we showcase the requested data openly, demonstrating our dedication to accountability and improvement. This commitment reflects our ongoing endeavor to create a workplace where gender equality is not just an aspiration but a tangible reality.
United Nations Global Compact
In line with the multi-year strategy of the UN Global Compact, ICL actively champions business awareness and action, aligning with the Sustainable Development Goals (SDG`s) by 2030. The SDG`s provide a powerful aspiration for global improvement – illustrating the direction we collectively aim to move towards, and the steps needed to reach our goals. As of 2021, ICL proudly holds the status of an official business participant of the UN Global Compact and is publicly committed to supporting its principles.
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ICL's dedication extends beyond rhetoric; we are committed to actively practicing responsible business methods. By combining these principles with collaboration and innovation, ICL is determined to be a catalyst for impactful change in markets and societies. This commitment solidifies the understanding that at ICL principles and profit coexist harmoniously, contributing to a sustainable and inclusive future for all.
Women’s Empowerment Principles (WEP)
The Women’s Empowerment Principles (WEPs) are a set of principles offering guidance to business on how to promote gender equality and female empowerment in the workplace, marketplace and community. Established by UN Global Compact and UN Women, the WEPs are informed by international labor and human rights standards and grounded in the recognition that businesses have a stake in, and responsibility for, gender equality and female empowerment.
ICL’s CEO and President signed the WEP in 2021. By joining the WEPs community, the CEO signals a commitment to this agenda at the highest levels of the Company and to work collaboratively in multi-stakeholder networks to foster business practices that empower females. These include equal pay for work of equal value, gender-responsive supply chain practices and zero tolerance against sexual harassment in the workplace.
Furthermore, ICL has committed to:
Employing 20% females in its overall workforce (in 2023, the percentage was 20%).
25% females in senior leadership (T100) by the end of 2024 (in 2023, the percentage was 25%).
25% females on ICL’s Board of Directors by 2024 (in 2023, the percentage was 36%).
In accordance with ICL’s ESG strategy and to reflect our commitment, ESG performance targets, including diversity and gender equality improvement, have been integrated into the incentive plan for all executive officers. The enhancement of diversity and gender equality is also incorporated into ICL’s senior management compensation policy, aligning with the Company's commitment to fostering an inclusive workplace.
As part of a $250 million Sustainability-Linked Loan (SLL) obtained in 2021, ICL included a target of women representing 25% of senior management by 2024. Subsequently, a $1.55B Sustainability-Linked Revolving Credit Facility (Sustainability-Linked RCF) in 2023 reinforced these goals, emphasizing female representation in ICL senior management through aligned KPIs.
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See below females in senior leadership (T100)
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Pillar 3: Understanding by Learning
Learning about diversity and inclusion helps individuals develop a deeper awareness and understanding of the various dimensions of diversity, including race, gender, ethnicity, sexual orientation, age, abilities, and more. This knowledge fosters empathy and reduces unconscious biases. Furthermore, learning about Diversity and Inclusion is essential for promoting an inclusive culture, mitigating biases, enhancing communication and collaboration, complying with legal standards, fostering innovation, understanding diverse markets, and developing human resourceseffective leaders in an increasingly diverse and interconnected world.
Pillar 4: Support from Within
Employee Resource Groups (ERGs) are important components of a comprehensive Diversity and Inclusion strategy. They create a sense of community, provide visibility and support for underrepresented groups, offer professional development opportunities, and contribute to a more inclusive and vibrant organizational culture.
Through the RFGs we build a sense of community and belonging for employees by connecting people socially and professionally and encouraging interaction between employees. Their voice is strong, and the ERGs can address issues within all of its units worldwide, as well as globally uniform work processes. The assimilated system includes the administration of employees’ data, learning and training processes, and managing the performance of all of the Company’s employees. As at the date of the report, about 1,800 managers and employees are participating in a performance management process based on goals, performance evaluation, and group and individual development plans deriving from them. Assimilation of the global processes is expected to expand to include additional processes in the fields of compensation and communications, and toCompany that improve the relationship between performanceengagement and compensation.sense of belonging of many.
Celebrating successes is a way to recognize and appreciate the efforts and achievements of individuals and teams who have contributed to the organization's DIB goals. Acknowledging their hard work fosters a sense of value and pride. Recognizing and celebrating D&I successes can boost the motivation and morale of employees. It provides positive reinforcement, reinforcing the idea that the organization values diversity and is committed to creating an inclusive workplace. In summary, celebrating Diversity and Inclusion events and successes is crucial for reinforcing values, motivating employees, inspiring others, building a positive organizational culture, and signaling the organization's commitment to creating an inclusive and diverse workplace where employees can truly feel as if they belong.
E. SHARE OWNERSHIP
August 6, 2014, for ICL's CEO‑December 11, 2014 | Officers and senior employees | 922 | 3 equal tranches: (1) One third on December 1, 2016 (2) One third on December 1, 2017 (3) One third on December 1, 2018 | An issuance for no consideration, under the 2014 Equity Compensation Plan, to 450 ICL officers and senior employees in Israel and overseas. | The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the date approval of the BOD and/or the date of the approval of the General Meeting where required). | 8.4 |
| Former CEO | 86 | An issuance for no consideration, under the 2014 Equity Compensation Plan. | ||||
| February 26, 2015 | ICL’s Directors (excluding ICL's CEO) | 99 | 3 tranches: (1) 50% will vest August 28, 2015 (2) 25% will vest February 26, 2017 (3) 25% will vest February 26, 2018 | An issuance for no consideration, under the 2014 Equity Compensation Plan, to 11 ICL Directors. | 0.7 | |
May 12, 2015, for ICL's CEO & Chairman of the BOD ‑ June 29, 2015 | Officers and senior employees | 1,194 | 3 equal tranches: (1) one third at the end of 12 months after the grant date (2) one third at the end of 24 months after the grant date (3) one third at the end of 36 months after the grant date | An issuance for no consideration, under the 2014 Equity Compensation Plan, to 550 ICL officers and senior employees in Israel and overseas. | 9.7 | |
| Former CEO | 90 | An issuance for no consideration, under the 2014 Equity Compensation Plan. | ||||
| Former Chairman of the BOD | 68 | |||||
| December 23, 2015 | ICL’s Directors (excluding ICL's CEO& Chairman of the BOD) | 121 | 3 equal tranches: (1) One third on December 23, 2016 (2) One third on December 23, 2017 (3) One third on December 23, 2018 | An issuance for no consideration, under the 2014 Equity Compensation Plan, to 8 ICL Directors. | 0.5 |
June 30, 2016, for ICL's CEO & Chairman of the BOD‑September 5, 2016 | Officers and senior employees | 990 | 3 equal tranches: (1) one third at the end of 12 months after the grant date (2) one third at the end of 24 months after the grant date (3) one third at the end of 36 months after the grant date | An issuance for no consideration, under the 2014 Equity Compensation Plan, to 90 ICL officers and senior employees in Israel and overseas. | The value of the restricted shares was determined according to the closing price on the TASE on the most recent trading day preceding the grant date (the date approval of the BOD and/or the date of the approval of the General Meeting where required). | 4.8 |
| Chairman of the BOD | 55 | An issuance for no consideration, under the 2014 Equity Compensation Plan. | ||||
| Former CEO | 185 | |||||
| January 3, 2017 | ICL’s Directors (excluding ICL's Chairman of the BOD) | 146 | An issuance for no consideration, under the 2014 Equity Compensation Plan, to 8 ICL Directors. The value includes a reduction of 5% from the value of the equity compensation, pursuant to the decision of the directors in March 2016, to reduce their annual compensation for 2016 and 2017. | 0.6 | ||
| February 14, 2017 | Acting CEO | 38 | An issuance for no consideration, under the 2014 Equity Compensation Plan. | 0.2 | ||
June 20, 2017, for ICL's Chairman of the BOD – August 2, 2017 | Officers and Senior employees | 2,211 | An issuance for no consideration, under the 2014 Equity Compensation Plan, to 494 ICL officers and senior employees in Israel and overseas. | 10 | ||
| Chairman of BOD. | 53 | An issuance for no consideration, under the 2014 Equity Compensation Plan. | 0.3 | |||
| January 10, 2018 | ICL’s Directors (excluding ICL's CEO& Chairman of the BOD) | 125 | An issuance for no consideration, under the 2014 Equity Compensation Plan, to 5 ICL Directors. | 0.5 |
Share-based payments to employees
For information with respect to share ownership of members of our Management and Supervisory Boards and our senior management see “Item 7 - Major Shareholders and Related (and Interested) Party Transactions”.
Item 7 – MAJOR SHAREHOLDERS AND RELATED (AND INTERESTED) PARTY TRANSACTIONS
A. MAJOR SHAREHOLDERS
The following table presents,, as of March 1, 20186, 2024 (unless otherwise noted below),*** the beneficial ownership of our ordinary shares by each person who is known by us to be the beneficial owner of 5% or more of our outstanding ordinary shares and each of our directors and executive officers. The data presented is based on information provided to us by the holders or disclosed in public regulatory filings.
The number of ordinary shares beneficially owned by each entity, person, executive officer or director is determined in accordance with the rules of the SEC and the information is not necessarily indicative of beneficial ownership for any other purpose. Under such rules, beneficial ownership includes any shares over which the individual has sole or shared voting power or investment power as well as any shares that the individual has the right to acquire within 60 days through the exercise of any option, warrant or other right. Except as otherwise indicated, and subject to applicable community property laws, the persons named in the table have sole voting and investment power with respect to all common shares held by that person.
Unless otherwise indicated below, the address for each beneficial owner is c/o ICL Group Ltd., Millennium Tower, 23 Aranha Street, P.O. Box 20245 Tel Aviv, 6120201, Israel.
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| Shareholders | Ordinary Shares Beneficially Owned(1) | Special State Share | ||
| Number | % | Number | % | |
| Israel Corporation Ltd.(2) | 587,178,761 | 45.93%** | - | - |
| State of Israel(3) | - | - | 1 | 100% |
| Johanan Locker | 170,236 | * | - | - |
| Avisar Paz | - | * | - | - |
| Aviad Kaufman | - | * | - | - |
| Sagi Kabla | - | * | - | - |
| Ovadia Eli | 64,576 | * | - | - |
| Miriam Haran | 57,289 | * | - | - |
| Lior Reitblatt | 22,080 | * | - | - |
| Reem Aminoach | 22,080 | * | - | - |
| Ruth Ralbag | 22,080 | * | - | - |
| Asher Grinbaum | 280,127 | * | - | - |
| Kobi Altman | 307,902 | * | - | - |
| Hezi Israel | 119,911 | * | - | - |
| Lisa Haimovitz | 81,998 | * | - | - |
| Yakir Menashe | 163,784 | * | - | - |
| Rani Lobenstein | 25,111 | * | - | - |
| Charles Weidhas | 362,750 | * | - | - |
| Ofer Lifshitz | 184,260 | * | - | - |
| Eli Glazer | 218,848 | * | - | - |
Israel Corporation Ltd.(2) | 567,012,091 | 43.98%** | - | - |
| State of Israel (3) | - | - | 1 | 100% |
Migdal Insurance & Financial Holdings Ltd. (4) | 78,690,320 | 6.10% | - | - |
Harel Insurance Investments & Financial Services Ltd. (5) | 70,590,979 | 5.47% | - | - |
Altshuler Shaham Ltd. (6) | 64,691,143 | 5.01% | - | - |
The Phoenix Holdings Ltd. (7) | 64,690,757 | 5.01% | - | - |
Yoav Doppelt (8) | 802,998 | * | - | - |
Avisar Paz (9) | 25,389 | * | - | - |
| Aviad Kaufman | - | * | - | - |
| Sagi Kabla | - | * | - | - |
Lior Reitblatt (10) | 62,092 | * | - | - |
Reem Aminoach (11) | 62,092 | * | - | - |
Tzipi Ozer Armon (12) | 24,331 | * | - | - |
| Gadi Lesin | - | * | - | - |
Miriam Haran (13) | 53,289 | * | - | - |
| Dafna Gruber | - | * | - | - |
| Michal Silverberg | - | * | - | - |
| Shalom Shlomo | - | * | - | - |
Raviv Zoller (14) | 1,469,828 | * | - | - |
Aviram Lahav (15) | 523,279 | * | - | - |
Lilach Geva Harel (16) | 432,787 | * | - | - |
Ilana Fahima (17) | 432,787 | * | - | - |
Anantha Desikan (18) | 549,718 | * | - | - |
Noam Goldstein (19) | 309,935 | * | - | - |
Amir Meshulam (20) | 137,705 | * | - | - |
Miri Mishor (21) | 351,872 | * | - | - |
Elad Aharonson (22) | 645,177 | * | - | - |
Meir Mergi (23) | 442,252 | * | - | - |
Yaniv Kabalek (24) | 116,310 | * | - | - |
Philip Brown (25) | 400,879 | * | - | - |
| Uri Perelman | - | * | - | - |
* Less than 1%
** For additionalfurther information, please see section (2) below.
| (1) | The percentages shown are based on 1,289,564,573 ordinary shares issued and outstanding as of March 6, 2024 (after excluding shares held by us or our subsidiaries). In accordance with SEC rules, beneficial ownership includes voting or investment power with respect to securities and includes the shares issuable pursuant to options that are exercisable within 60 days of March 6, 2024. Shares issuable pursuant to options are deemed outstanding for computing the percentage of the person holding such options but are not considered outstanding for computing the percentage of any other person. |
| (2) | Israel Corp. is a public company listed for trading on the Tel Aviv Stock Exchange (TASE). Based on the information provided by Israel Corp., Millenium Investments Elad Ltd. (“Millenium”) and Mr. Idan Ofer are considered as controlling shareholders jointly of Israel Corp., for purposes of the Israeli Securities Law (each of Millenium and Mr. Idan Ofer hold shares in Israel Corp. directly, and Mr. Idan Ofer serves as a director of Millenium and has an indirect interest in it as the beneficiary of the discretionary trust that has indirect control of Millenium, as stated below). As of December 31, 2023, Millenium holds approximately 44.71% of the issued share capital (and 45.14% of the voting rights) in Israel Corp., which holds as of December 31, 2023 approximately 43.98% of the voting rights and approximately 43.15% of the |
To the best of Israel Corp.’s knowledge, Millenium is held by Mashat Investments(Investments) Ltd. (“Mashat”) and by XT Investments Ltd. (“XT Investments”), with 80%84.73% and 20% holding rates15.27% holdings in theits issued share capital, respectively. (It is noted that Mashat granted XT Investments a power of attorney for a fixed period (which is extendable) to vote according to XT's discretion at General Meetings of Millenium in respect of shares constituting 5% of the voting rights in Millenium). Mashat is a private company, wholly owned by a Dutch company, Ansonia Holdings Singapore B.V. (“Ansonia”).which is incorporated in the Netherlands. Ansonia is a wholly-ownedwholly owned subsidiary of Jelany Corporation N.V. (registered in Curaçao), which is a wholly-ownedwholly owned subsidiary of the Liberian company, Court Investments Ltd. (“Court”). Court is wholly owned by a foreign discretionary trust, in which Mr. Idan Ofer is the beneficiary. XT Investments which directly holds approximately 2.25% of the share capital of Israel Corp., is a shareholder in Millenium as stated. XT Investments is a private company, held in fullwholly owned by XT Holdings Ltd. (“XT Holdings”), a private company whose. To the best of Israel Corp.’s knowledge, ordinary shares of XT Holdings are held in equal shares by Orona Investments Ltd. (which is indirectly controlled by Mr. Ehud Angel) and by Lynav Holdings Ltd. ("Lynav"), a company thatwhich is controlled by a foreign discretionary trust in which Mr. Idan Ofer is a primethe beneficiary. Mr. Ehud Angel holds, among other things, a special share that grants him, inter alia, under certain limitations and for certain issues, an additional vote on the Board of Directors of XT Holdings. As of December 31, 2023, Lynav also holds directly 1.26% of the issued share capital (and 1.27% of the voting rights) of Israel Corp. In addition, Kirby Enterprises Inc., which is to the best of Israel Corp.’s knowledge, indirectly held by the same trust that holds Mashat, in which, as stated, Mr. Idan Ofer is the beneficiary, holds approximately 0.74%0.75% of the issued share capital and voting rights of Israel Corp. Furthermore, Mr. Idan Ofer holds directly approximately 3.85%3.93% of the issued share capital of Israel Corp. Furthermore, XT Investments directly holdsCorp (and approximately 0.03%3.97% of the Company's capital (namely, 377,662 ordinary shares)voting rights).
As of December 31, December 2017, 4012023, approximately 73 million ordinary shares have been pledged by Israel CorporationCorp. to secure certain liabilities, almost entirely comprised of margin loans with an aggregate outstanding principal amount of $703$150 million.
| (3) | For a description of the different voting rights held by the holder of the Special State Share, see “Item 10 - Additional Information— B. Memorandum, Articles of Association and Special State Share — The Special State Share.” |
| (4) | Based solely upon and qualified in its entirety with reference to a Schedule 13G filed by Migdal Insurance & Financial Holdings Ltd. (“Migdal”) with the SEC on January 31, 2024. According to the Schedule 13G, of the 78,690,320 Ordinary Shares reported as beneficially owned by Migdal (i) 78,690,320 Ordinary Shares are held for members of the public through, among others, provident funds, mutual funds, pension funds and insurance policies, which are managed by direct and indirect subsidiaries of Migdal, each of which subsidiaries operates under independent management and makes independent voting and investment decisions, (ii) 7,229,615 Ordinary Shares are held by companies for the management of funds for joint investments in trusteeship, each of which operates under independent management and makes independent voting and investment decisions, and (iii) 0 are beneficially held for their own account (Nostro account). |
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| (5) | Based solely upon and qualified in its entirety with reference to a Schedule 13G/A filed by Harel Insurance Investments & Financial Services Ltd. (“Harel”), with the SEC on January 30, 2024. According to the Schedule 13G/A, of the 70,590,979 Ordinary Shares reported as beneficially owned by Harel (i) 67,917,056 Ordinary Shares are held for members of the public through, among others, provident funds and/or mutual funds and/or pension funds and/or index-linked securities and/or insurance policies, which are managed by subsidiaries of Harel, each of which subsidiaries operates under independent management and makes independent voting and investment decisions, (ii) 1,962,970 Ordinary Shares are held by third-party client accounts managed by a subsidiary of Harel as portfolio managers, which subsidiary operates under independent management and makes independent investment decisions and has no voting power in the securities held in such client accounts, and (iii) 710,953 Ordinary Shares are beneficially held for its own account. |
| (6) | Based solely upon and qualified in its entirety with reference to a Schedule 13G filed by Altshuler Shaham Ltd. (“Altshuler”), with the SEC on January 17, 2023. According to the Schedule 13G, of the 64,691,143 Ordinary Shares reported as beneficially owned by Altshuler (i) 61,312,442 Ordinary Shares are held by provident and pension funds managed by Altshuler Shaham Provident & Pension Funds Ltd., a majority-owned subsidiary of Altshuler, (ii) 3,378,701 Ordinary Shares are held by mutual funds managed by Altshuler Shaham Mutual Funds Management Ltd., a wholly-owned subsidiary of Altshuler; and (iii) 263,100 Ordinary Shares are held by hedge funds managed by Altshuler Shaham Owl, Limited Partnership, an affiliate of Altshuler-Shaham. Mr. Gilad Altshuler may be deemed to possess shared investment authority with respect to all of the foregoing Ordinary Shares due to his indirect 44.81% interest in Altshuler-Shaham, as well as his serving in various investment management capacities for Altshuler-Shaham and its subsidiaries and affiliates. The foregoing provident and pension funds, mutual funds and hedge funds, are managed for the benefit of public investors and not for the economic benefit of the foregoing reporting persons. Each of the foregoing reporting persons lack authority with respect to the voting of all of such Ordinary Shares. |
| (7) | Based solely upon and qualified in its entirety with reference to a Schedule 13G/A filed by The Phoenix Holdings Ltd. (“Phoenix”), with the SEC on December 28, 2023. According to the Schedule 13G/A, the 64,690,757 Ordinary Shares reported therein are beneficially owned by various direct or indirect, majority or wholly-owned subsidiaries of Phoenix (the “Phoenix Subsidiaries”). The Phoenix Subsidiaries manage their own funds and/or the funds of others, including for holders of exchange-traded notes or various insurance policies, members of pension or provident funds, unit holders of mutual funds, and portfolio management clients. Each of the Phoenix Subsidiaries operates under independent management and makes its own independent voting and investment decisions. |
| (8) | Includes 15,381 ordinary shares and 787,617 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (9) | Includes 25,389 ordinary shares. |
| (10) | Includes 62,092 ordinary shares. |
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| (11) | Includes 62,092 ordinary shares. |
| (12) | Includes 24,331 ordinary shares. |
| (13) | Includes 53,289 ordinary shares. |
| (14) | Includes 469,828 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (15) | Includes 523,279 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (16) | Includes 432,787 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (17) | Includes 432,787 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (18) | Includes 549,718 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (19) | Includes 309,935 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (20) | Includes 137,705 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (21) | Includes 41,937 ordinary shares and 309,935 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (22) | Includes 645,177 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (23) | Includes 48,809 ordinary shares and 393,443 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (24) | Includes 116,310 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
| (25) | Includes 400,879 ordinary shares subject to options that are currently exercisable or will be exercisable within 60 days of the date of the table. |
CoB LTI: For information regarding the equity-based incentive grant to our Executive Chairman of the different voting rights heldBoard, Mr. Yoav Doppelt, for 2022-2024, in the form of options, approved by the holder of the Special State Share,shareholders on March 30, 2022, see “Description of Share Capital—The Special State Share” inNote 19 to our registration statement on Form F-1 (File no. 333-198711) filed with the SEC on September 22, 2014.Audited Financial Statements and “Item 6 - Directors, Senior Management and Employees— B. Compensation”
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B. RELATED (AND INTERESTED) PARTY TRANSACTIONS
Approval of Related (and Interested) Party Transactions
Approval of Related (and Interested) Party Transactions
Under the Companies Law, an interested party transaction may be approved only if it is for the benefit of the company. A transaction that is not an extraordinary transaction in which a director or officer has a personal interest requires the approval of the Board of Directors, unless the Articles of Association of the company provide otherwise. Our Articles of Association provide that such a transaction, if it does not pertain to a director’s or officer’s compensation terms, may be approved by any of our Board of Directors, our Audit and Accounting Committee, a disinterested director or officer or a person authorized for this purpose by our Board of Directors. If the transaction is an extraordinary transaction, it must be approved by the Audit and FinanceAccounting Committee and the Board of Directors, and, under certain circumstances, by the shareholders of the Company. An “extraordinary transaction” is a transaction other than in the ordinary course of business, other than on market terms or that is likely to have a material impact on the company’s profitability, assets or liabilities.
Pursuant to the Companies Law, extraordinary transactions with thea controlling shareholder and extraordinary transactions in which a controlling shareholder has a personal interest,, require the approval of the Audit Committee, or the Compensation Committee if such transaction is in connection with the terms of employment or service with the company, the Board of Directors and the shareholders of the company.company (unless a relief exists pursuant to the Israeli relief regulations concerning related parties transactions). The shareholder approval must be by a simple majority of all votes cast, provided that (i) such majority includes a simple majority of the votes cast by non‑controlling shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders mentioned in clause (i) above who voted against such transaction does not exceed 2% of the total voting rights in the company.company, which is referred to as the “Special Majority.”
The Companies Law prohibits any director who has a personal interest in an extraordinary transaction from being present at the discussion and voting on such transaction in the Audit Committee or Board of Directors. Notwithstanding, a director who has a personal interest may be present at the meeting and vote on the matter if a majority of the directors or members of the Audit Committee or Board of Directors (as the case may be) have a personal interest in the approval of such transaction. If a majority of the members of the Board of Directors have a personal interest in the transaction, such transaction also requires shareholder approval.
For further details regarding related party transactions that were approved in the reporting period, see Note 23 our Audited Financial Statements.
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Approval of DirectorDirectors and Officer Compensation
Under the Companies Law, we are required to approve, at least once every three years, a compensation policy with respect to the terms of engagement of our directors and officers. Following the recommendation of our Compensation and Human Resources Committee, theThe compensation policy must be approvedrequires the approval of the board of directors, following recommendation by our Board of Directorsthe company’s compensation committee, and ourthereafter by the company’s shareholders. The shareholder approval must be obtained by a simple majority of all votes cast, provided that (i) such majority includes a simple majority of the votes cast by non‑controlling shareholders and shareholders having no personal interest in the matter (excluding abstentions) or (ii) the total number of votes of shareholders mentioned in clause (i) above who voted against such transactionthe proposal does not exceed 2% of the total voting rights in the company. company, which is referred to as the “Special Majority for Compensation.”The Company’s current Compensation Policy was approved by the shareholders (by the Special Majority for Compensation) on March 30, 2022, following the recommendation of our HR & Compensation Committee and approval by our Board of Directors, and is in effect for a period of three years.
In general, the compensation terms of directors, the chief executive officerChief Executive Officer and any employee or service provider who is considered a controlling shareholder as well asor a relative of a controlling shareholder, directly or indirectly (including through a company controlled by a controlling shareholder), must be approved separately by the HR & Compensation and Human Resources Committee, the Board of Directors and the Shareholders.shareholders (in the case of the Chief Executive Officer by the Special Majority for Compensation, and in the case of a controlling shareholder or relative thereof or company controlled by a controlling shareholder, by the Special Majority, unless a relief exists pursuant to the Companies Law or Israeli relief regulations concerning related parties transactions). Generally, shareholder approval is not required for director compensation payable in cash up to the maximum amountamounts set forth in the regulationsCompensation Regulations governing the compensation of external directors. Generally, the compensation terms of other officers (who are not directors) who report directly to the Chief Executive Officer require the approval of the HR & Compensation and Human Resources Committee and the Board of Directors, unlessprovided that the HR & Compensation and Human Resources Committee approvesmay approve an amendment to an existing arrangement of such an officer if it determines that therethe amendment is nonot material changecompared to the existing terms of the compensation.compensation.
Registration Rights Agreement
We entered into a registration rights agreement with Israel CorporationCorp. on September 12, 2014. We obtained shareholder approval of our entry into this agreement on May 8, 2014. This agreement provides for customary demand, piggyback and shelf registration rights and provides that we will perform various actions and comply with various requirements to facilitate and promote such registrations, as well as cover certain expenses of Israel CorporationCorp. in connection with any such registration. This agreement will expire upon the earlier of either September 12, 2024, or when Israel Corp. ceases to be an affiliate of the Company.
Controlling Shareholder
As of December 31, 2017,2023, Israel CorporationCorp. holds approximately 47.6%43.15% of our outstanding ordinary shares and approximately 45.93%43.97% of the voting rights of our Shareholders.shareholders.
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Israel CorporationCorp. exercises controlover our operations and business strategy and has sufficient voting power to control many matters requiring approval by our Shareholders,shareholders, including:
| Mergers or other business combinations; |
| Certain future issuances of ordinary shares or other securities; and |
| Amendments to our Articles of Association, excluding provisions of the Articles of Association that were determined by the Special State Share. |
However, Israel CorporationCorp. does not exercise control with respect to (i) our compensation policy, since it requires shareholder approval by the Special Majority for Compensation (as described in ”Item 7 - Major Shareholders and interested partyRelated (and Interested) Party Transactions – B. Related (and Interested) Party Transactions – Approval of Directors and Officer Compensation”); and (ii) extraordinary transactions with a controlling shareholder or in which a controlling shareholder has a personal interest (including a private placement in which a controlling shareholder has a personal interest), and the terms of engagement with a controlling shareholder or a relative thereof, directly or indirectly (including through a corporation controlled by a controlling shareholder), for the provision of services to the company and terms of employment or service of a controlling shareholder as an office holder or employment as other than an office holder, since these must be approved by a majoritythe Special Majority (as described in ”Item 7 - Major Shareholders and Related (and Interested) Party Transactions – B. Related (and Interested) Party Transactions – Approval of our non-related shareholders.Related (and Interested) Party Transactions”).
Joint Insurance
Management Fees to Controlling Shareholder
Relationships with Other Companies
Gas Purchase Agreement: For details respectingregarding the entry of a subsidiary in our Specialty Solutions segment into a long-term agreement for the acquisition of food grade phosphoric acid with PotashCorp, which until January 2018 was an interested party of the Company, see Note 26 to Our Audited Financial Statements.
Other Immaterial Transactions in the Ordinary Course of Business: The Company engages, from time to time, in its ordinary course of business, in various other transactions with related parties, such as for the purchase of marine transportations services, sale of products, purchase of raw materials for its operations and receipt of banking services. We do not deem these transactions as material to the Company, they are not viewed as unusual in their nature or conditions and they are all classified as "ordinary" transactions under Israeli law and approved according to the Company's relevant procedures and any and all applicable laws.
The table below sets forth certain income statement information with respect to balances of our related party transactions.transactions:
| For the year ended December 31 | |||
| 2023 | 2022 | 2021 | |
| $ millions | $ millions | $ millions | |
| Sales | 1 | 7 | 7 |
| Cost of sales | 1 | 13 | 6 |
| Selling, transport and marketing expenses | 6 | 15 | 13 |
| Financing income, net | (1) | - | (2) |
| General and administrative expenses | 1 | 1 | 1 |
| Management fees to the parent company | - | 1 | 1 |
| For the year ended December 31 | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
| Sales | 6 | 35 | 32 |
| Cost of sales | 97 | 113 | 127 |
| Selling, transport and marketing expenses | 8 | 7 | 9 |
| Financing expenses (income), net | (9) | - | 22 |
| Management fees to the parent company | 1 | 1 | 2 |
The table below sets forth certain balance sheet information with respect to balances of our related party transactionstransactions:
| As of December 31 | ||
| 2023 | 2022 | |
| $ millions | $ millions | |
| Other current assets | 19 | 34 |
| Other current liabilities | 1 | 2 |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Other current assets | 38 | 8 |
| Other current liabilities | 191 | 20 |
For additionalfurther information regarding our related party transactions, see Note 2623 to our Audited Financial Statements.Statements.
Option Plans
For a description of the Option Plans see “Item 6 - Directors, Senior Management and Employees—E. Share Ownership”. and Note 16 to our Audited Financial Statements.
C. INTERESTS OF EXPERTS AND COUNSEL
Not Applicable.
Item 8 – FINANCIAL INFORMATION
| A. | CONSOLIDATED STATEMENTS AND OTHER FINANCIAL INFORMATION |
respectively. See “Item 18 - Financial Statements”Statements”.
Business Concentration Law
On December 11, 2013, the Law for EncouragementPromotion of Competition and Reduction of Business Concentration, 5774-2013 (the “Business Concentration“Concentration Law"), was published,enacted, which includes, among other things, provisions requiring regulators authorized to grant rights in areas defined as essential infrastructure in Israel, to take into account considerations for encouraging industry‑wide competition and reducingof business concentration in the overall economy prior to granting rights in public assetsareas defined as “essential infrastructure” in Israel to private entities defined as high‑concentration“high‑concentration” entities. The Business Concentration Law sets forth a list of "rights", including authorization, license, concession, or permit and a contract, and also includes a list of matters definedin areas classified as an essential infrastructure,“essential infrastructure”, including areas in which we are engaged, such as quarrying, mining, water,petroleum refinement, etc. The list of high‑concentration entities was published in accordance with the criteria provided in the Business Concentration Law, and ICL and its main subsidiaries in Israel are included therein, as aforesaid. In our estimation, inclusion of the Company and its main subsidiaries in Israel in the list of high‑concentration entities is not expected to have a significant adverse effect on us and itsour financial results. However, in light of the frequent changes in the regulatory environment in Israel and the existing uncertainty regarding the manner of granting rights in natural resources in a manner other than that provided in current legal provisions, among other things in relation to the manner of granting a concession for minerals extraction from the Dead Sea in 2030, as well as in relation to the granting of phosphate mining licenses, under the provisions of the IsraeliIsrael Mining Ordinance, it is possible that our estimation will prove to be inaccurate.
Price Monitoring
| The prices of fertilizer‑grade phosphoric acid for local Israeli customers are regulated under the Supervision of Prices for Commodities and Services Law 1996. The quantity of these products sold in Israel by the |
ICL and some of its subsidiaries have been declared a monopoly in Israel in the following areas: potash, phosphoric acid, sulphuric acid, ammonia, chemical fertilizers, phosphate fertilizers, phosphates, bromine and bromine compounds. Due to their having been declared monopolies, ICL and its subsidiaries, with respect to their activities in the aforesaid areas, are subject to limitations set forth in Chapter 4 of Israel's Economic Competition Law, 1988 (formerly, Restrictive Business Practices Law, 1988), most significantly its prohibition on monopolies abusing their positions as monopolies. In 2023 and 2022 approximately 4% and 3%, respectively, of our revenue derived from Israeli sales and, therefore, in our estimation, and without derogating from the legal implications of the above-mentioned declaration, overall, the said declaration does not have a material impact on us. We also have an internal antitrust compliance program in place.
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Legal Proceedings
Tax Proceedings
Derivative Actions
The Application pertains to gas purchase transactions of the Company, Bazan and OPC, including the intercompany aspects thereof, which include a 2012 transaction involving Bazan for the purchase of natural gas from the Tamar gas field (the “Tamar Transaction”), as well as a transaction for the purchase of natural gas from Energean Israel Limited (the “Energean Transaction”). The Company’s engagement in the Energean Transaction was approved by theour shareholders at a general meeting of our shareholdersheld on February 22, 2018.
Following the submission of the closing arguments by the applicant claims that:and the Company, on November 14, 2023, the court dismissed the derivative motion.
| B. | In |
Considering the preliminary stage of the proceeding, it is difficult to estimate its outcome. In any event, no material impact is expected on the Company's financial results.
| In October 2023, the |
Further to the summary report of the Inter-Ministry Directors General Committee published in June 2021, in March 2022, a governmental decision was taken to develop and promote Haifa Bay (hereinafter - the Bay), the objective of which is to lead to the economic-social advancement of the Bay, in particular, and of the Haifa metropolis, in general, through significant urban development that includes transforming an industrial complex into an area comprising residences, clean industry and green areas (hereinafter - the Decision).
As part of the Decision, reference was made to the establishment of an inter-ministerial team to conduct negotiations with companies operating in the Bay, including ICL’s subsidiary, Fertilizers and Chemicals Ltd. (F&C), with the aim of reaching an understanding to end petrochemical and chemical industrial activity in the Bay, while maintaining energy security and a regular fuel supply to the economy. The Tamar TransactionDecision further states that the demolition of the facilities and infrastructure, as well as the restoration of contaminated land, will be performed in accordance with guidelines established by the Israeli Ministry of Environmental Protection and subject to prior coordination with the negotiation team, and that this does not detract from the responsibility of the parties that operated these sites, among other things, in accordance with environmental protection laws and the "polluter pays" principle. In accordance with the Decision, a negotiation team was tasked to work with the Company to reach an agreement for evacuation of its facility by the end of 2025. These timelines were not discussed or agreed upon with the Company. In response, ICL contacted the negotiation team contending that since actual negotiations have not yet begun and the evacuation of a factory this size, is very complex involving varied significant consequences, completing the evacuation by the end of 2025 is neither applicable nor realistic.
In 2022, as part of the Company's preparation for the government's Decision, the Company performed valuations to F&C’s assets, by an independent appraiser, according to which the value of the attached properties is approximately $270 million according to the Fair Value method, or approximately $514 million according to the Replacement Cost method (RCN). In addition, the fair value of the land is approximately $298 million, not including restoration costs.
As of December 31, 2023, F&C’s depreciated cost of fixed assets (which includes attached assets and land) totaled $27 million.
On December 11, 2023, the Ministers of the Interior, Construction, and Housing approved the National Outline Plan (NOP) 75 ("Gate of the Bay") concerning the development of Haifa Bay.
Considering the preliminary stage of the process, the Company is unable to assess the manner in which the aforementioned Decision will be implemented, its feasibility and its consequences, including the expected level of compensation and the required restoration costs.
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For information regarding significant claims and legal proceeding, which are pending against the Group, see Note 2118 to our Audited Consolidated Financial Statements.
Dividend policy
All decisions respecting dividend distribution are made by our Board of Directors, which takes into accountconsiders a variety of factors, including our profits, ability to pay our debt and obligations, investment plans, financial statecondition and other factors, as it sees fit.applicable. The distribution of a dividend is not assured, and our Board of Directors may decide, at its sole discretion, at any time and for any reason, not to distribute a dividend, to reduce the rate thereof, to distribute a special dividend, to change the dividend distribution policy or to adopt a share buy-back plan.
B. SIGNIFICANT CHANGES
To the best of our knowledge, no significant changes have occurred since the date of our consolidated financial statements.statements, other than as disclosed in this Annual Report.
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Item 9 – THE OFFER AND LISTING
| Year Ended December 31: | ||||
| 2013 | 51.75 | 24.48 | 13.87 | 6.74 |
| 2014 | 31.97 | 25.01 | 9.21 | 6.36 |
| 2015 | 29.80 | 15.55 | 7.68 | 3.98 |
| 2016 | 18.87 | 13.36 | 5.01 | 3.51 |
| 2017 | 18.25 | 13.35 | 4.88 | 3.80 |
| Year Ended December 31, 2016: | ||||
| First Quarter | 17.55 | 14.51 | 4.50 | 3.68 |
| Second Quarter | 18.87 | 14.70 | 5.01 | 3.77 |
| Third Quarter | 16.33 | 14.40 | 4.32 | 3.70 |
| Fourth Quarter | 16.51 | 13.36 | 4.32 | 3.51 |
| Year Ended December 31, 2017: | ||||
| First Quarter | 18.25 | 15.33 | 4.82 | 4.11 |
| Second Quarter | 16.63 | 14.75 | 4.77 | 4.01 |
| Third Quarter | 17.58 | 14.22 | 4.88 | 4.06 |
| Fourth Quarter | 15.68 | 13.35 | 4.47 | 3.80 |
| Year Ended December 31, 2018: | ||||
First Quarter (up to March 5) | 15.94 | 13.57 | 4.67 | 3.89 |
| Month Ended: | ||||
| September 30, 2017 | 15.95 | 14.22 | 4.54 | 4.06 |
| October 31, 2017 | 15.68 | 14.47 | 4.47 | 4.12 |
| November 30, 2017 | 15.05 | 13.35 | 4.28 | 3.80 |
| December 31, 2017 | 14.70 | 13.75 | 4.17 | 3.93 |
| January 31, 2018 | 15.94 | 13.83 | 4.67 | 4.00 |
| February 28, 2018 | 15.60 | 13.57 | 4.47 | 3.89 |
March 31, 2018 (up to March 5) | 15.17 | 14.78 | 4.39 | 4.24 |
B. PLAN OF DISTRIBUTION
Not applicable.
C. MARKETS
D. SELLING SHAREHOLDERS
Not applicable.
E. DILUTION
Not applicable.
F. EXPENSES OF THE ISSUE
Not applicable.
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Item 10 – ADDITIONAL INFORMATION
A. SHARE CAPITAL
As of December 31, 2017,2023, our authorized share capital consisted of 1,484,999,999 ordinary shares, par value NIS 1 per share, of which 1,302,970,0491,314,025,336 ordinary shares were issued and outstanding (including shares held by us or our subsidiaries), and 1 Special State Share, par value NIS 1 per share, issued and outstanding. All of our outstanding shares have been lawfully issuedand are fully paid and are non-assessable.paid. As of December 31, 2017, 24,589,7912023, 24,589,836 ordinary shares were held by us or our subsidiaries. Shares acquired by our subsidiaries prior to February 2000 have both economic rights and voting rights. However, in accordance with Israeli law, ordinary shares issued to our subsidiaries or purchased by our subsidiaries after February 2000 have economic rights but not voting rights. Shares held by us have no economic rights or voting rights. Therefore, out of the ordinary shares held by us or our subsidiaries 24,589,791as of December 31, 2023, 24,589,836 have no voting rights.
As of December 31, 2017,2023, an additional quantityamount of approx. 19.6approximately 14 million ordinary shares were issuable upon the exercise of outstanding options granted to our officers and employees at a weighted average exercise price of ILS 20.86approximately NIS 26.55 (about $7.32) per share. The weighted average exercise price of the outstanding vested options is approximately NIS 22.57 (about $6.22) per share. For additionalfurther information about the issuance of options and restricted shares to directors, officers and senior employees and their exercise or vesting (as the case may be) in 2016-2017, as well as the allocation of restricted shares to directors and approval of the issuance of restricted shares to directors,2022-2023, see Note 2219 and 16 to our Audited Financial Statements and “Item 6.6 - Directors, Senior Management and Employees—E. Share Ownership”.
In 2015, 2016 and 2017, no2023, approximately 0.85 million options under our equity compensation plans were exercised.exercised into approximately 0.3 million ordinary shares. In 2022, approximately 7 million options under our equity compensation plans were exercised into approximately 2 million ordinary shares. In 2021, approximately 16 million options under our equity compensation plans were exercised into approximately 5 million ordinary shares.
B. MEMORANDUM,, ARTICLES OF ASSOCIATION AND SPECIAL STATESHARE
Our shareholders adopted the Articles of Association attached as Exhibit 3.2 to our registration statement on Form F-1 (File no. 333-198711) filed with the SEC on September 12, 2014.2014.
We incorporate by reference into this Annual Report the description of our Amended and Restated Articles of Association,, which became effective upon the closing of our IPOinitial public offering in the Unites States and listing on the NYSE, contained in our F-1 registration statement (File No. 333-198711) originally filed with the SEC on September 12, 2014, as amended.Exhibit 2.1 of this Annual Report. Such description sets forth a summary of certain provisions of our Articles of Association as currently in effect.
The Special State Share
The State of Israel holds a nontransferable Special State Share in ICL in order to preserve the State’s vital interests. Any change in the provisions of our Articles of Association relating to the rights attached to the Special State Share requires approval from the State of Israel. The Special State Share grants its holder the rights described below.
The sale or transfer of material assets of the Company (in Israel) or grantingthe grant of any other rights in the abovementionedsuch assets, not in the ordinary course of our business, whether in one transaction or in a series of transactions, shall be invalid. Unless it receivedinvalid, without the approvalconsent of the holder of the Special State Share, howwho may oppose thesuch a transfer of a material asset as stated above only if, in its opinion, such transfer is likely to harm one of the “State’s vital interests”."vital interests of the State" as such term is defined in the Article of Association and described below. Restrictions are also imposed on voluntary liquidation, mergers and reorganizations, excluding certain exceptions enumerated in our Articles of Association.
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In addition, without the approvalconsent of the holder of the Special State Share, any acquisition or holding of 14% or more of our outstanding share capital is not valid. In addition, any acquisition or holding of 25% or more of our outstanding share capital (including an increase of holdings to 25%) is not valid without the approvalconsent of the holder of the Special State Share, even if in the past the approvalconsent of the holder of the Special State Share had been receivedobtained for ownership of less than 25%. Our Articles of Association set forth procedures required to be followed by a person who intends to acquire shares in an amount that would require the approval of the holder of the Special State Shares. A pledge over shares is treated like an acquisition of shares. As a condition to voting at any shareholders’shareholder meeting, each interested party in the Company, including a holder of 5% or more of our outstanding shares, will beis required to certify in writing that the voting power derived from the holding of shares does not require the approval of the holder of the Special State Share or that such approval has been obtained.
In addition to the aforesaid,above, the approvalconsent of the holder of the Special State Share is required for the ownership of any shares that grant their holder the right, ability or practical potential to appoint, directly or indirectly, 50% or more of our directors, and such appointments will not be valid as long as that approvalsuch consent has not been obtained.
The holder of the Special State Share has the right to receive information from us, as provided in our Articles of Association. Our Articles of Association also provide that the holder of the Special State Share will use this information only to exercise its rights under the Articles of Association for purposes of protecting the State’s vital interests.
Our Articles of Association also impose a periodic reporting obligation on us for the benefit of the holder of the Special State Share, regarding all asset‑related transactions approved by our Board of Directors during the three months prior to the date of the report, any changes in share capital ownership and any voting agreements among the Company’s shareholders signed during that period.
The following are the “State’s vital interests” as defined in our Articles of Association for purposes of the Special State Share:
| ◾ | To preserve the character of the Company and its subsidiaries, ICL Dead Sea, ICL Rotem, Dead Sea Bromine Company, Bromine Compounds and Tami, as Israeli companies whose centers of business and management are in Israel. In our estimation, this condition is met. |
| ◾ | To monitor the control over minerals and natural resources, for purposes of their efficient development and utilization, including maximum utilization in Israel of the results of investments, research and development. |
| ◾ | To prevent acquisition of a position of influence in the Company or the foregoing Israeli subsidiaries by hostile entities or entities likely to harm the foreign and security interests of the State of Israel. |
ICL Dead Sea, ICL Rotem, Dead Sea Bromine Company, Bromine Compounds and Tami as Israeli companies whose centers of business and management are in Israel. In our estimation, this condition is met.Group Limited 255
| ◾ | To prevent acquisition of a position of influence in the Company or the foregoing Israeli subsidiaries or management of such companies, whereby such acquisition or management may create a situation of significant conflicts of interest likely to harm any of the vital interests enumerated above. |
Furthermore, our headquarters and the ongoing management and control over our business activities must be in Israel. The majority of the members of our Board of Directors must be citizens and residents of Israel. In general, meetings of our Board of Directors mustare to take place in Israel.
Other than the rights enumerated above, the Special State Share does not grant the holder any voting or equity rights.
The State of Israel also holds a Special State Share in the following ICL subsidiaries: ICL Dead Sea, Dead Sea Bromine Company, ICL Rotem, Bromine Compounds, Tami and Dead Sea Magnesium. The rights granted by these shares according to the Articles of Association of these subsidiaries are substantially similar to the rights enumerated above. The full provisions governing the rights of the Special State Share appear in our Articles of Association and in the Articles of Association of the said subsidiaries and are available for the public’s review. We report to the State of Israel on an ongoing basis in accordance with the provisions of our Articles of Association. Certain asset transfer or sale transactions that
During the second half of 2018, an inter-ministry team was established, headed by the Ministry of Finance, whose purpose is, among other things, to regulate the authority and supervision in our opinion require approval, have received the approval of the holderrespect of the Special State Share.
C. MATERIAL CONTRACTS
Except as otherwise disclosed in this Annual Report, we are not currently, and have not been in the last two years, party to any material contract, other than contracts entered into in the ordinary course of business.For additional information on divestitures currently in progress, see “Item 3 - Key Information— A. Selected Financial Data”.
D. EXCHANGE CONTROLS
There are currently no Israeli currency control restrictions on the paymentsremittance of dividends, interest or other distributionspayments with respect to our ordinary shares to non-residents of Israel or on the proceeds from the sale of the shares, except for the obligationshareholders who are subjects of Israeli residents to file reportscountries that are, or have been, in a state of war with the Bank of Israel regarding certain transactions. However, legislation remains in effect pursuant to which currency controls can be imposed by administrative action at any time.Israel.
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E. TAXATION
Israeli Tax Considerations
Taxation of Investors
The following are material Israeli income tax consequences to investors of acquiringwho acquire and disposingdispose of our ordinary shares. That which is stated below does not purport to be a comprehensive description of all the tax considerations that may be relevant to a particular person’s decision to acquire and/or dispose theof our ordinary shares.
Capital Gains Tax
Israeli law generally imposes a capital gains tax on the sale of capital assets by residents of Israel, as defined for Israeli tax purposes, and on the sale of capital assets located in Israel, including shares of Israeli companies, by non‑residents of Israel, unless a specific exemption is available or unless a tax treaty between Israel and the shareholder’s country of residence provides otherwise. The law distinguishes between real gain and inflationary surplus. The inflationary surplus is a portion of the total capital gain that is equivalent to the increase of the relevant asset’s purchase price which is attributable to the increase in the Israeli Consumer Price Index or a foreign currency exchange rate between the date of purchase and the date of sale. The real gain is the excess of the total capital gain over the inflationary surplus.
Israeli Residents
Generally, as of January 1, 2012, the tax rate applicable to capital gains derived from a sale of shares, whether listed on a stock market or not, is the regular corporate tax rate in Israel of 25% (commencing from January 1, 2017 – 24% and commencing from January 1, 2018 – 23%)applicable for Israeli companies (23% since 2018) and 25% for Israeli individuals, unless such shareholder claims a deduction for financing expenses in connection with such shares, in which case the gain will generally be taxed at a rate of 30%. Additionally, if suchindividual shareholder is considered a “significant shareholder” at any time during the 12‑month period preceding such sale, in which case the tax rate will beis 30%. A “significant shareholder” is defined as one who holds, directly or indirectly, including together with others, at least 10% of any means of control in the company. However, different tax rates will apply to dealers in securities. Israeli companies are subject to the corporate tax rate on capital gains derived from the sale of listed shares.
As of January 1, 2013, shareholders who are individuals with taxable income that exceeds NIS 800,000 in a tax year (linked to the Israeli Consumer Price Index each year – NIS 810,720 for 2016 and commencing from January 1, 2017, individual (foreign or Israeli) taxpayers having taxable income ofabove NIS 640,000)698,280 (for 2023) in a certain tax year will be subject to an additional tax payment at the rate of 2% (and commencing from January 1, 2017 – an additional tax payment at the rate of 3%) on the portion of their taxable income for such tax year that is in excess of such threshold. For this purpose, taxable income includes inter alia taxable capital gains from the sale of our shares and taxable income from dividend distributions.
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Non‑Israeli Residents
In certain instances where our shareholders may be liable to Israeli tax on the sale of their ordinary shares, the payment of the consideration may be subject to the withholding of Israeli tax at the source.
In addition, pursuant to the Convention between the US Government of the United States of America and the Israeli government with respect to taxes on income,, as amended, or the U.S.‑US Israel Tax Treaty, the sale, exchange or disposition of ordinary shares by a person who qualifies as a resident of the United States within the meaning of the U.S.‑US Israel Tax Treaty and who is entitled to claim the benefits afforded to such person by the U.S.‑US Israel Tax Treaty generally will not be subject to the Israeli capital gains tax unless such person holds, directly or indirectly, shares representing 10% or more of our voting power during any part of the 12‑12 month period preceding such sale, exchange or disposition, subject to particular conditions, or the capital gains from such sale, exchange or disposition can be allocated to a permanent establishment in Israel or is considered to be derived from or sale of Israeli real property interests for purposes of the U.S.‑US Israel Tax Treaty. If a U.S.US investor is not exempt from Israeli taxes under the U.S.‑US Israel Tax Treaty, such U.S.US investor may be subject to Israeli tax, to the extent applicable as described above; however, under the U.S.‑US Israel Tax Treaty, such person may be permitted to claim a credit for such taxes against the U.S.US federal income tax imposed with respect to such sale, exchange or disposition, subject to the limitations in the U.S.US laws applicable to foreign tax credits. The U.S.‑US Israel Tax Treaty does not relate to U.S.US state or local taxes.
Taxation of Dividend Distributions
Israeli Residents
Israeli resident individuals are generally subject to Israeli income tax on the receipt of dividends paid on our ordinary shares, other than bonus shares (share dividends). The tax rate applicable to such dividends is 25% or 30% for a shareholder that is considered a significant shareholder at any time during the 12‑month period preceding such distribution. Dividends paid from income derived from Approved Enterprises or Benefited Enterprises are subject to withholding at the rate of 15%. Dividends paid from income derived from Preferred Enterprises are subject to withholding at the rate of 20%.
Israeli resident companies are generally exempt from tax on the receipt of dividends paid on our ordinary shares (excluding dividends paid from income derived from Approved or Benefited Enterprises).
As of January 1, 2017, individuals (both foreign or Israeli) taxpayers having taxable income of above NIS 698,280 NIS (for 2023) in a certain tax year will be subject to an additional tax payment at the rate 3% on the portion of their taxable income for such tax year that is in excess such threshold.
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Non‑Israeli Residents
Non‑residents of Israel are subject to income tax on income accrued or derived from sources in Israel, including dividends paid by Israeli companies. On distributions of dividends other than stock dividends, income tax (generally collected by means of withholding) will generally apply at the rate of 25%, or 30% for a shareholder that is considered a significant shareholder (as defined above) at any time during the 12‑month period preceding such distribution, unless a different rate is provided in a treaty between Israel and the shareholder’s country of residence. Dividends paid from income derived from Approved or Benefited Enterprises are subject to withholding at the rate of 15%, or 4% for Benefited Enterprises in the Ireland Track. Dividends paid from income derived from Approved or Preferred Enterprises will be subject to withholding at the rate of 20%.
Under the U.S.‑US Israel Tax Treaty, the maximum tax on dividends paid to a holder of ordinary shares who qualifies as a resident of the United States within the meaning of the U.S.‑US Israel Tax Treaty is 25%. The treaty provides for reduced tax rates on dividends if (a) the shareholder is a U.S.US corporation holding at least 10% of our issued voting power during the part of the tax year that precedes the date of payment of the dividend and held such minimal percentage during the whole of its prior tax year, and (b) not more than 25% of the Israeli company’s gross income consists of interest or dividends, other than dividends or interest received from subsidiary corporations or corporations 50% or more of the outstanding voting shares of which is owned by the Israeli company. The reduced treaty rate, if applicable, is 15% in the case of dividends paid from income derived from Approved, Benefited or Preferred Enterprise or 12.5% otherwise.
Material U.S.US Federal Income Tax Considerations for U.S.US Holders
The following are material U.S.US federal income tax consequences to the U.S.US Holders described below of owning and disposing of our ordinary shares, but it does not purport to be a comprehensive description of all the tax considerations that may be relevant to a particular person’s decision to hold the ordinary shares. This discussion applies only to a U.S.US Holder that holds the ordinary shares as capital assets for U.S.US federal income tax purposes. In addition, it does not describe all of the tax consequences that may be relevant in light of a U.S.US Holder’s particular circumstances, including alternative minimum tax consequences, any aspect of the provisions of the Internal Revenue Code of 1986, as amended (the “Code”) commonly known as the Medicare tax and tax consequences applicable to U.S.US Holders subject to special rules, such as:
certain financial institutions; |
dealers or traders in securities that use a mark-to-market method of tax accounting; |
persons holding ordinary shares as part of a “straddle” or integrated transaction or persons entering into a constructive sale with respect to the ordinary shares; |
persons whose functional currency for |
entities classified as partnerships for |
tax exempt entities, “individual retirement accounts” or “Roth IRAs": |
Persons who acquired our ordinary shares pursuant to the exercise of an employee stock option or otherwise as compensation;
If an entity that is classified as a partnership for US federal income tax purposes owns ordinary shares, the US federal income tax treatment of a partner will generally depend on the status of the partner and the activities of the partnership. Partnerships owning ordinary shares and partners in such partnerships should consult their tax advisers as to the particular US federal tax consequences of owning and disposing of the ordinary shares.
This discussion is based on the Code, administrative pronouncements, judicial decisions, the US-Israel Tax Treaty (the “Treaty”) and final and proposed Treasury regulations, changes to any of which subsequent to the date of this Annual Report may affect the tax consequences described herein.
For purposes of this discussion, a “U.S.“US Holder” is a person who, for U.S.US federal income tax purposes, is a beneficial owner of ordinary shares and is:
a citizen or individual resident of the |
a corporation, or other entity taxable as a corporation, created or organized in or under the laws of the US, any state therein or the District of Columbia; or
an estate or trust the income of which is subject to |
This discussion assumes that we are not, and will not become, a passive foreign investment company, as described below.
Taxation of Distributions
Distributions paid on our ordinary shares, other than certain pro rata distributions of ordinary shares, will be treated as dividends to the extent paid out of our current or accumulated earnings and profits (as determined under U.S.US federal income tax principles). Because we do not calculate our earnings and profits under U.S.US federal income tax principles, it is expected that distributions generally will be reported to U.S.US Holders as dividends. Subject to applicable limitations, dividends paid to certain non-corporate U.S.US Holders may be taxable at the favorable tax rates applicable to “qualified dividend income”. Non-corporate U.S.US Holders should consult their tax advisers regarding the availability of these favorable rates on dividends in their particular circumstances. Dividends will not be eligible for the dividends received deduction generally available to U.S.US corporations under the Code. Dividends will generally be included in a U.S.US Holder’s income on the date of receipt. Dividend income will include any amounts withheld by us in respect of Israeli taxes and will be treated as foreign source income for foreign tax credit purposes. If any dividend is paid in NIS, the amount of dividend income will be the dividend’s U.S.US dollar amount calculated by reference to the exchange rate in effect on the date of receipt, regardless of whether the payment is in fact converted into U.S.US dollars. If the dividend is converted into U.S.US dollars on the date of receipt, a U.S.US Holder should not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S.US Holder may have foreign currency gain or loss if the dividend is converted into U.S.US dollars after the date of receipt. Such gain or loss would generally be treated as U.S.-sourceUS-source ordinary income or loss. SubjectTreasury regulations may prohibit US Holders who are not eligible for the benefits of the Treaty from claiming a foreign tax credit with respect to applicable limitations, some of which vary depending upon the U.S. Holder’s circumstances, Israeli income taxes withheld from dividends on our ordinary shares will be creditable against the U.S. Holder’s U.S. federal income tax liability.shares. The rules governing foreign tax credits are complex,complex. For example, Treasury regulations provide that, in the absence of an election to apply the benefits of an applicable income tax treaty, in order for foreign income taxes to be creditable the relevant foreign income tax rules must be consistent with certain US federal income tax principles, and U.S. Holders should consult theirwe have not determined whether the Israeli income tax advisers regardingsystem meets these requirements. The US Internal Revenue Service has released notices that provide relief from certain of the creditabilityprovisions of foreign taxesthe Treasury regulations described above for taxable years ending before the date that a notice or other guidance withdrawing or modifying the temporary relief is issued (or any later date specified in their particular circumstances.such notice or other guidance). In lieu of claiming a foreign tax credit, U.S.US Holders may, at their election, deduct foreign taxes, including Israeli taxes, in computing their taxable income, subject to applicable limitations. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all foreign taxes paid or accrued in the taxable yearyear. US Holders should consult their tax advisers regarding the creditability or deductibility of Israeli taxes in their particular circumstances.
Sale or Other Taxable Disposition of Ordinary Shares
For U.S.US federal income tax purposes, gain or loss realized on the sale or other taxable disposition of our ordinary shares will be capital gain or loss and will be long term capital gain or loss if the U.S.US Holder held the ordinary shares for more than one year. The amount of the gain or loss will equal the difference between the U.S.US Holder’s tax basis in the ordinary shares disposed of and the amount realized on the disposition, in each case as determined in U.S.US dollars. This gain or loss will generally be U.S.US source gain or loss for foreign tax credit purposes. The deductibility of capital losses is subject to limitations.
Passive Foreign Investment Company Rules
In general, a non-U.S.non-US corporation will be a “passive foreign investment company” (a “PFIC”) for any taxable year if (i) 75% or more of its gross income consists of passive income or (ii) 50% or more of the average quarterly value of its assets (generally determined on a quarterly basis) consists of assets that produce, or are held for the production of, passive income. For purposes of the above calculations, a non-U.S.non-US corporation that directly or indirectly owns at least 25% by value of the shares of another corporation is treated as if it held its proportionate share of the assets of the other corporation and received directly its proportionate share of the income of the other corporation. Passive income generally includes dividends, interest, rents, royalties and gains from transactions in commodities (other than certain active business gains from the sales of commodities).
Based on the manner in which we operate our business, we believe that we were not a PFIC for 2017.2023. However, because PFIC status depends on the composition and character of a company’s income and assets and the value of its assets from time to time, there can be no assurance that we will not be a PFIC for any taxable year.
If we were a PFIC for any taxable year during which a U.S.US Holder held ordinary shares, gain recognized by a U.S.US Holder on a sale or other disposition (including certain pledges) of the ordinary shares would be allocated ratably over the U.S.US Holder’s holding period for the ordinary shares. The amounts allocated to the taxable year of the sale or other disposition and to any year before we became a PFIC would be taxed as ordinary income. The amount allocated to each other taxable year would be subject to tax at the highest rate in effect for individuals or corporations, as appropriate, for that taxable year, and an interest charge would be imposed on the resulting tax liability for each such taxable year. Further, to the extent that distributions received by the US Holder in any distributiontaxable year in respect of ordinary shares in excess ofexceed 125% of the average of the annual distributions received by a U.S.US Holder during the preceding three years or the U.S.US Holder’s holding period, whichever is shorter, those excess distributions would be subject to taxation in the same manner. Certain elections may be available that would result in alternative treatments (such as mark-to-market treatment) of the ordinary shares in the case that we were a PFIC for any taxable year. US Holders should consult their tax advisers to determine whether any of these elections would be available and, if so, what the consequences of the alternative treatments would be in their particular circumstances.
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If we were a PFIC for any taxable year during which a U.S.US Holder owned ordinary shares, the U.S.US Holder generally will be required to file annual reports on Internal Revenue Service Form 8621. In addition, the favorable tax rates described above with respect to dividends paid to certain non-corporate U.S.US Holders would not apply if we were a PFIC for the taxable year of distribution or the preceding taxable year.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within the United StatesUS or through certain U.S.US related financial intermediaries generally are subject to information reporting, and may be subject to backup withholding, unless (i) the U.S.US Holder is a corporation or other exempt recipient or (ii) in the case of backup withholding, the U.S.US Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding. Backup withholding is not an additional tax.
The amount of any backup withholding from a payment to a U.S.US Holder will be allowed as a credit against the U.S.US Holder’s U.S.US federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the Internal Revenue Service.
Certain U.S.US Holders who are individuals (or(or certain specified entities) may be required to report information relating to their ownership of securities of non-U.S.non-US issuers, such as our ordinary shares, unless the securities are held in accounts at financial institutions (in which case the accounts may be reportable if maintained by non-U.S.non-US financial institutions). U.S.US Holders should consult their tax advisers regarding their reporting obligations with respect to the ordinary sharesshares.
F. DIVIDENDS AND PAYING AGENTS
Not applicable.
G. STATEMENT BY EXPERTS
Not applicable.
H. DOCUMENTS ON DISPLAY
In light of the listing of our ordinary shares for trade on the New York Stock Exchange (NYSE) within the framework of an initial public offering executed in 2014,we are subject to the informational requirements of the US Securities Exchange Act of 1934. Accordingly, we are required to file or furnish reports and other information with the SEC pursuant to the requirements applying to foreign issuers, including annual reports on Form 20-F and reports on Form 6-K. You may inspect and copy reports and other information filed with or furnished to the SEC at the Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. In addition, theThe SEC maintains a website that contains reports and other information about issuers, like us, that file electronically with the SEC. The address of that website is www.sec.gov.www.sec.gov. The information on that website is not part of this Annual Report and is not incorporated by reference herein.
I. SUBSIDIARY INFORMATION
The Company and its subsidiaries do not maintain any direct or indirect connection with Iran or with enemy nations (as defined in the Israel Trade with the Enemy Ordinance - 1939).
Item 11 – QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Risk Management
In the ordinary course of our business activities, we are exposed to various market risks that are beyondnot in our control, including fluctuations in the prices of certain of our products and inputs, currency exchange rates, interest rates, energy prices and marine shipping prices, that may have an adverse effect on the value of our financial assets and liabilities, future cash flowsflow and profit. As a result of these market risks, we could suffer a loss due to adverse changes insuch as the prices of our products or our inputs, foreign exchange rates, interest rates, energy prices or marine shipping prices.
We regularly monitor the extent of our exposure and the hedging rates for the various risks described below. Thebelow, and we execute hedging policy for all types of exposure is discussed by our Board of Directors as part of the annual budget discussions, and our Board of Directors establishes our maximum exposureactivities according to a value at risk model. Together with a report on the quarterly financial results, our Audit and Accounting Committee receives quarterly reports on exposure and hedging rates and determines if our hedging policy should be revised. Management implements our hedging policy with reference to the actual developments and expectations in the various markets.markets.
We use financial instruments and derivatives for hedging purposes only. These hedging instruments reduce our exposure as described above. TheseMost of these transactions do not meet the hedging conditions provided in IFRS and therefore they are measured at fair value, and changes in the fair value are charged immediately to profit and loss.earnings. The counterparties for our derivatives transactions are banks.banks or financial institutes. We believe the credit risk in respect thereof is negligible.small.
For additionalfurther information about our hedging activities, see Note 2421 to our audited consolidated financial statements.Audited Financial Statements.
Exchange Rate Risk
The U.S.US dollar is the principal currency of the business environment in which most of our subsidiaries operate. The majorityMost of our activities—activities — sales, purchase of materials, selling and marketing expenses and financing expenses, as well as the purchase of property, plant and equipment—equipment — are executed mainly in U.S.US dollars, and, soas a result, we use the U.S.US dollar is used as theour functional currency for measurement and reporting of the Company and the majoritymost of our subsidiaries.subsidiaries.
We have a number ofseveral consolidated subsidiaries whose functional currencies are their local currency—mainlycurrency —mainly the euro,Euro, the British pound,Pound, the Brazilian real,Real, the Israeli shekelShekel and the Chinese yuan.Yuan.
Set forth below is a description of our principal exposures in respect of changes in currency exchange rates.
Transactions by our subsidiaries in currencies that are not their functional currency expose us to changes in the exchange rates of those currencies compared withto the functional currencies of those companies. Measurement of this type of our exposure is based on the ratiosurplus of net income toor expenses in each currency that is not the functional currency of that company.
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Part of the costs of our inputs in Israel are denominated and paid in NIS. Thus, we are exposed to a strengthening of the NIS exchange rate against the U.S.US dollar (NIS appreciation)revaluation). This exposure is similar in substance to the exposure described above for transactions in foreign currencies but is much larger than the other currency exposures.
The results for tax purposes for the Company and its subsidiaries operating in Israel are measured in NIS. As a result, we are exposed to the rate of the change in the U.S.US dollar exchange rate and the measurement base for tax purposes (the NIS) in respect of these companies.
Our subsidiaries have severance pay liabilities that are denominated in the local currency, and in Israel they are sometimes also affected by rises in the CPI.CPI as well. Our subsidiaries in Israel have reserves to cover part of these liabilities. The reserves are denominated in NIS and affected by the performance of the funds in which the sums are invested. As a result, we are exposed to changes in the exchange rates of the U.S.US dollar against various local currencies in respect of net liabilities for severance pay. For further information regarding our hedging policy, see "Item 11 – Quantitative and Qualitative Disclosures about Market Risk– Risk Management".
Our subsidiaries have financial assets and liabilities that are denominated in or linked to currencies other than their functional currencies. A surplus of assets over liabilities denominated in currencies that are not the functional currency creates exposure for us in respect of exchange rate fluctuations.
Explanations of the main changes between the periods
Exchange rate:
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Dry bulk marine shipping:
The tables below set forth the sensitivity of our derivative instruments and certain balance sheet items to 5% and 10% increases and decreases in the exchange rates as atof December 31, 2017.2023.
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| USD/NIS | |||||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | $ millions | ||||
| Cash and cash equivalents | (0.1) | 1.4 | 0.1 | (0.2) | (0.1) | 2.2 | 0.1 | 0.2 | ||
| Short term deposits and loans | 0.0 | 0.1 | 0.0 | 0.0 | 0.1 | 0.0 | 0.0 | |||
| Trade receivables | (5.9) | (3.0) | 59.0 | 3.0 | 5.9 | (6.0) | (3.1) | 66.0 | 3.5 | 7.3 |
| Receivables and debit balances | (3.9) | (2.0) | 39.4 | 2.0 | 3.9 | (1.3) | (0.7) | 14.0 | 0.7 | 1.6 |
| Long-term deposits and loans | (0.1) | 0.0 | 0.9 | 0.0 | 0.1 | |||||
| Credit from banks and others | 3.3 | 1.6 | (32.7) | (1.6) | (3.3) | 2.7 | 1.4 | (29.8) | (1.6) | (3.3) |
| Trade payables | 28.9 | 14.4 | (288.8) | (14.4) | (28.9) | 28.0 | 14.7 | (308.5) | (16.2) | (34.3) |
| Other payables | 9.6 | 4.8 | (96.3) | (4.8) | (9.6) | 2.4 | 1.3 | (26.8) | (1.4) | (3.0) |
| Long-term loans | 7.8 | 4.1 | (86.0) | (4.5) | (9.6) | 12.0 | 6.3 | (132.1) | (7.0) | (14.7) |
| Fixed rate debentures (series E) | 42.8 | 22.4 | (470.9) | (24.8) | (52.3) | |||||
| Options | (35.6) | (9.1) | 3.2 | 20.5 | 50.0 | |||||
| Fixed rate debentures | 24.7 | 13.0 | (272.0) | (14.3) | (30.2) | |||||
| Forward | (39.1) | (20.5) | 1.8 | 22.7 | 47.8 | (64.2) | (32.5) | 35.1 | 41.0 | 83.8 |
| Forward transactions hedge accounting | (27.8) | (14.5) | 5.4 | 16.0 | 34.0 | |||||
| Swap | (52.9) | (27.4) | 64.0 | 31.7 | 66.2 | (29.5) | (15.5) | (4.8) | 17.1 | 36.3 |
| Total | (45.1) | (14.8) | (806.0) | 29.9 | 70.2 | (59.3) | (29.7) | (650.3) | 37.9 | 77.8 |
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Cash and cash equivalents | (0.9) | (0.5) | 10.1 | 0.5 | 1.1 |
| Short term deposits and loans | (0.1) | (0.1) | 1.5 | 0.1 | 0.2 |
| Trade receivables | (23.7) | (12.4) | 260.5 | 13.7 | 28.9 |
| Receivables and debit balances | (2.0) | (1.0) | 21.9 | 1.2 | 2.4 |
| Long-term deposits and loans | (0.4) | (0.2) | 4.5 | 0.2 | 0.5 |
| Credit from banks and others | 11.1 | 5.8 | (122.0) | (6.4) | (13.6) |
| Trade payables | 20.4 | 10.7 | (224.5) | (11.8) | (24.9) |
| Other payables | 7.5 | 3.9 | (82.4) | (4.3) | (9.2) |
| Long-term loans from banks | 28.4 | 14.9 | (312.0) | (16.4) | (34.7) |
| Long-term loans with variable interest rates | 33.5 | 17.5 | (368.1) | (19.4) | (40.9) |
| Forward | 5.9 | 2.8 | 5.4 | (2.5) | (4.8) |
| Total | 79.7 | 41.4 | (805.1) | (45.1) | (95.0) |
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Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | $ millions | ||||
| Cash and cash equivalents | (1.8) | (0.9) | 17.9 | 0.9 | 1.8 | (1.3) | (0.7) | 14.6 | 0.8 | 1.6 |
| Short term deposits and loans | (0.1) | 0.0 | 0.7 | 0.0 | 0.1 | |||||
| Trade receivables | (24.6) | (12.3) | 246.4 | 12.3 | 24.6 | (5.3) | (2.8) | 58.5 | 3.1 | 6.5 |
| Receivables and debit balances | (0.1) | 0.0 | 0.9 | 0.0 | 0.1 | (0.1) | 1.2 | 0.1 | ||
| Long-term deposits and loans | (0.1) | 1.1 | 0.1 | |||||||
| Credit from banks and others | 15.8 | 7.9 | (157.6) | (7.9) | (15.8) | 1.7 | 0.9 | (18.9) | (1.0) | (2.1) |
| Trade payables | 18.2 | 9.1 | (182.1) | (9.1) | (18.2) | 3.0 | 1.6 | (33.4) | (1.8) | (3.7) |
| Other payables | 7.7 | 3.8 | (76.9) | (3.8) | (7.7) | 0.2 | 0.1 | (2.6) | (0.1) | (0.3) |
| Long-term loans from banks | 2.9 | 1.4 | (29.0) | (1.4) | (2.9) | |||||
| Long-term loans | 1.5 | 0.8 | (16.8) | (0.9) | (1.9) | |||||
| Options | 5.7 | 2.8 | (1.8) | (3.1) | (6.7) | (0.9) | (0.4) | 0.1 | 0.4 | 0.8 |
| Forward | 35.0 | 16.6 | (2.6) | (15.0) | (28.7) | (0.5) | (0.2) | (0.3) | 0.4 | 0.8 |
| Swap | 5.3 | 2.7 | (0.6) | (2.5) | (5.1) | |||||
| Total | 63.9 | 31.0 | (183.6) | (29.5) | (58.4) | (1.7) | (0.8) | 2.4 | 1.0 | 1.8 |
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | $ millions | ||||
| Cash and cash equivalents | (0.7) | (0.3) | 6.7 | 0.3 | 0.7 | (5.9) | (3.1) | 65.3 | 3.4 | 7.3 |
| Trade receivables | (4.8) | (2.4) | 47.8 | 2.4 | 4.8 | (32.3) | (16.9) | 355.4 | 18.7 | 39.5 |
| Receivables and debit balances | 0.0 | 0.1 | 0.0 | (0.1) | 0.0 | 0.6 | 0.0 | 0.1 | ||
| Credit from banks and others | 2.0 | 1.0 | (20.3) | (1.0) | (2.0) | |||||
| Trade payables | 2.3 | 1.2 | (23.0) | (1.2) | (2.3) | 8.2 | 4.3 | (90.7) | (4.8) | (10.1) |
| Long-term deposits and loans | (0.6) | (0.3) | 7.0 | 0.4 | 0.8 | |||||
| Other payables | 1.5 | 0.7 | (14.7) | (0.7) | (1.5) | 1.3 | 0.7 | (13.9) | (0.7) | (1.5) |
| Options | - | |||||||||
| Long-term loans from banks | 2.3 | 1.2 | (25.4) | (1.3) | (2.8) | |||||
| Forward | 2.6 | 1.2 | 0.1 | (1.1) | (2.2) | 1.3 | 0.7 | (0.2) | (0.7) | (1.6) |
| Total | 2.9 | 1.4 | (3.3) | (1.3) | (2.5) | (25.8) | (13.4) | 298.1 | 15.0 | 31.7 |
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | |||||||||
| Cash and cash equivalents | (0.7) | (0.3) | 6.5 | 0.3 | 0.7 |
| Trade receivables | (3.1) | (1.5) | 30.8 | 1.5 | 3.1 |
| Trade payables | 1.5 | 0.8 | (15.5) | (0.8) | (1.5) |
| Other payables | 0.2 | 0.1 | (1.9) | (0.1) | (0.2) |
| Long-term loans from banks | 3.0 | 1.5 | (30.0) | (1.5) | (3.0) |
| Total | 0.9 | 0.6 | (10.1) | (0.6) | (0.9) |
| $ millions | |||||
| Cash and cash equivalents | (2.2) | (1.1) | 21.6 | 1.1 | 2.2 | (20.9) | (10.9) | 229.9 | 12.1 | 25.5 |
| Short term investments and deposits | (0.4) | (0.2) | 4.8 | 0.3 | 0.5 | |||||
| Trade receivables | (9.2) | (4.6) | 91.7 | 4.6 | 9.2 | (7.1) | (3.7) | 77.8 | 4.1 | 8.6 |
| Receivables and debit balances | (0.1) | 0.0 | 0.9 | 0.0 | 0.1 | |||||
| Trade payables | 8.5 | 4.3 | (85.3) | (4.3) | (8.5) | 5.2 | 2.7 | (56.9) | (3.0) | (6.3) |
| Other payables | 2.1 | 1.0 | (20.8) | (1.0) | (2.1) | 1.0 | 0.5 | (11.2) | (0.6) | (1.2) |
| Credit from banks and others | 17.3 | 8.7 | (173.3) | (8.7) | (17.3) | |||||
| Forward | 3.1 | 1.6 | (0.7) | (1.8) | (3.8) | |||||
| Long-term loans (CNY) | 9.8 | 4.9 | (98.1) | (4.9) | (9.8) | 2.9 | 1.5 | (31.4) | (1.7) | (3.5) |
| Total | 29.4 | 14.8 | (264.9) | (15.0) | (30.1) | (19.4) | (10.1) | 213.9 | 11.2 | 23.7 |
The tables below set forth the sensitivity of our derivative instruments and certain balance sheet items to 5% and 10% increases and decreases in the exchange rates as atof December 31, 2016.2022.
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| USD/NIS | |||||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | $ millions | ||||
| Cash and cash equivalents | (0.2) | (0.1) | 1.8 | 0.1 | 0.2 | (0.1) | 1.4 | 0.1 | 0.2 | |
| Short term deposits and loans | 0.0 | 0.3 | 0.0 | |||||||
| Trade receivables | (5.0) | (2.5) | 50.3 | 2.5 | 5.0 | (8.1) | (4.2) | 88.8 | 4.7 | 9.9 |
| Receivables and debit balances | (0.5) | (0.2) | 4.9 | 0.2 | 0.5 | (1.1) | (0.6) | 12.0 | 0.6 | 1.3 |
| Long-term deposits and loans | 0.0 | 0.3 | 0.0 | |||||||
| Credit from banks and others | 3.2 | 1.6 | (32.0) | (1.6) | (3.2) | 2.6 | 1.3 | (28.1) | (1.5) | (3.1) |
| Trade payables | 20.1 | 10.0 | (200.8) | (10.0) | (20.1) | 33.8 | 17.7 | (371.9) | (19.6) | (41.3) |
| Other payables | 20.4 | 10.2 | (204.3) | (10.2) | (20.4) | 2.4 | 1.3 | (26.7) | (1.4) | (3.0) |
| Long-term loans | 14.3 | 7.5 | (156.9) | (8.3) | (17.4) | 15.7 | 8.2 | (172.3) | (9.1) | (19.1) |
| Fixed rate debentures (series E) | 36.9 | 19.3 | (405.5) | (21.3) | (45.1) | |||||
| Fixed rate debentures | 35.9 | 18.8 | (395.3) | (20.8) | (43.9) | |||||
| Options | (62.5) | (27.6) | (2.1) | 21.2 | 53.7 | (21.8) | (11.9) | (10.2) | 11.2 | 23.7 |
| Forward | (43.9) | (23.0) | 0.0 | 25.4 | 53.6 | (66.2) | (34.7) | (11.7) | 38.4 | 81.0 |
| Forward transactions hedge accounting | (31.0) | (16.0) | (14.0) | 18.0 | 38.0 | |||||
| Swap | (57.5) | (30.1) | 3.3 | 33.3 | 70.2 | (42.2) | (22.0) | 23.1 | 25.1 | 53.3 |
| Total | (74.7) | (34.9) | (940.7) | 31.3 | 77.0 | (80.1) | (42.2) | (904.8) | 45.7 | 97.0 |
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | $ millions | ||||
| Cash and cash equivalents | (1.6) | (0.8) | 17.1 | 0.9 | 1.9 | |||||
| Short term deposits and loans | (0.2) | (0.1) | 1.7 | 0.1 | 0.2 | |||||
| Trade receivables | (29.9) | (15.7) | 329.1 | 17.3 | 36.6 | |||||
| Receivables and debit balances | (1.7) | (0.9) | 18.4 | 1.0 | 2.0 | |||||
| Long-term deposits and loans | 0.0 | 0.3 | 0.0 | (0.2) | (0.1) | 2.4 | 0.1 | 0.3 | ||
| Short term deposits and loans | 0.0 | 0.2 | 0.0 | |||||||
| Credit from banks and others | 11.3 | 5.9 | (124.2) | (6.5) | (13.8) | |||||
| Trade payables | 20.8 | 10.9 | (229.0) | (12.1) | (25.4) | |||||
| Other payables | 8.3 | 4.3 | (90.9) | (4.8) | (10.1) | |||||
| Long-term loans from banks | 26.0 | 13.6 | (285.9) | (15.0) | (31.8) | |||||
| Long-term loans with variable interest rates | 31.8 | 16.7 | (349.9) | (18.4) | (38.9) | |||||
| Options | 3.8 | 1.8 | (0.2) | (2.3) | (4.7) | |||||
| Forward | 13.3 | 5.9 | (4.3) | (8.4) | (15.4) | |||||
| Total | 81.7 | 41.5 | (715.7) | (48.1) | (99.1) | |||||
ICL Group Limited 267
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | $ millions | ||||
| Cash and cash equivalents | (2.2) | (1.1) | 21.6 | 1.1 | 2.2 |
| Short term deposits and loans | 0.0 | 0.0 | 0.5 | 0.0 | 0.0 |
| Trade receivables | (19.9) | (10.0) | 199.3 | 10.0 | 19.9 |
| Receivables and debit balances | 0.0 | 0.0 | 0.4 | 0.0 | 0.0 |
| Long-term deposits and loans | (0.1) | 0.0 | 0.8 | 0.0 | 0.1 |
| Credit from banks and others | 10.0 | 5.0 | (100.0) | (5.0) | (10.0) |
| Trade payables | 16.1 | 8.0 | (160.8) | (8.0) | (16.1) |
| Other payables | 5.9 | 2.9 | (58.8) | (2.9) | (5.9) |
| Long-term loans from banks | 15.2 | 7.6 | (151.6) | (7.6) | (15.2) |
| Options | 4.3 | 2.0 | 2.0 | (1.8) | (3.2) |
| Forward | 14.9 | 7.1 | 3.5 | (6.4) | (12.2) |
| Total | 44.2 | 21.5 | (243.1) | (20.6) | (40.4) |
| Cash and cash equivalents | (0.7) | (0.4) | 7.4 | 0.4 | 0.8 |
| Trade receivables | (6.6) | (3.5) | 72.8 | 3.8 | 8.1 |
| Receivables and debit balances | (0.1) | (0.1) | 1.2 | 0.1 | 0.1 |
| Credit from banks and others | 1.3 | 0.7 | (14.7) | (0.8) | (1.6) |
| Trade payables | 2.5 | 1.3 | (27.4) | (1.4) | (3.0) |
| Other payables | 0.1 | 0.1 | (1.3) | (0.1) | (0.1) |
| Long-term loans | 1.6 | 0.8 | (17.8) | (0.9) | (2.0) |
| Options | (1.0) | (0.4) | 0.0 | 0.4 | 0.8 |
| Forward | (0.8) | (0.4) | 0.0 | 0.4 | 0.9 |
| Total | (3.7) | (1.9) | 20.2 | 1.9 | 4.0 |
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | $ millions | ||||
| Cash and cash equivalents | (0.2) | (0.1) | 2.0 | 0.1 | 0.2 | (2.7) | (1.4) | 30.1 | 1.6 | 3.3 |
| Trade receivables | (3.6) | (1.8) | 35.7 | 1.8 | 3.6 | (28.0) | (14.7) | 308.3 | 16.2 | 34.3 |
| Receivables and debit balances | 0.0 | |||||||||
| Credit from banks and others | 2.1 | 1.1 | (21.2) | (1.1) | (2.1) | |||||
| Trade payables | 2.3 | 1.1 | (22.6) | (1.1) | (2.3) | 9.3 | 4.9 | (102.6) | (5.4) | (11.4) |
| Long-term deposits and loans | (0.7) | (0.4) | 7.4 | 0.4 | 0.8 | |||||
| Other payables | 1.0 | 0.5 | (9.6) | (0.5) | (1.0) | 1.4 | 0.7 | (15.2) | (0.8) | (1.7) |
| Options | (2.1) | (1.4) | (0.8) | (0.3) | 0.2 | |||||
| Long-term loans from banks | 1.1 | 0.6 | (12.3) | (0.6) | (1.4) | |||||
| Forward | 1.0 | 0.5 | 1.3 | (0.4) | (0.8) | 10.0 | 5.2 | 1.2 | (5.8) | (12.2) |
| Total | 0.5 | (0.1) | (15.2) | (1.5) | (2.2) | (9.6) | (5.1) | 216.9 | 5.6 | 11.7 |
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | |||||||||
| Cash and cash equivalents | (0.4) | (0.2) | 4.0 | 0.2 | 0.4 | (27.8) | (14.6) | 305.9 | 16.1 | 34.0 |
| Short term investments and deposits | (0.2) | (0.1) | 1.8 | 0.1 | 0.2 | |||||
| Trade receivables | (2.7) | (1.4) | 27.1 | 1.4 | 2.7 | (7.1) | (3.7) | 77.8 | 4.1 | 8.6 |
| Trade payables | 0.9 | 0.4 | (8.8) | (0.4) | (0.9) | 6.3 | 3.3 | (68.9) | (3.6) | (7.7) |
| Other payables | 0.2 | 0.1 | (1.6) | (0.1) | (0.2) | 1.3 | 0.7 | (14.6) | (0.8) | (1.6) |
| Long-term loans from banks | 4.5 | 2.2 | (44.6) | (2.2) | (4.5) | |||||
| Long-term loans (CNY) | 4.1 | 2.1 | (44.6) | (2.3) | (5.0) | |||||
| Total | 2.5 | 1.1 | (23.9) | (1.1) | (2.5) | (23.4) | (12.3) | 257.5 | 13.6 | 28.5 |
| Cash and cash equivalents | (3.8) | (1.9) | 38.2 | 1.9 | 3.8 |
| Trade receivables | (8.4) | (4.2) | 83.9 | 4.2 | 8.4 |
| Trade payables | 10.7 | 5.4 | (107.3) | (5.4) | (10.7) |
| Other payables | 1.7 | 0.9 | (17.4) | (0.9) | (1.7) |
| Credit from banks and others | 16.4 | 8.2 | (164.4) | (8.2) | (16.4) |
| Forward | 2.6 | 1.4 | 1.3 | (1.5) | (3.2) |
| Long-term loans (CNY) | 8.7 | 4.3 | (87.0) | (4.3) | (8.7) |
| Total | 27.9 | 14.1 | (252.7) | (14.2) | (28.5) |
Interest Rate Risk
We have loans bearing variable interest rates that expose our finance expenses and cash flowsflow to changes in those interest rates. With respect to our fixed‑interest loans, there is exposure to changes in the fair value of the loans due to changes in the market interest rate.
The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the LIBORUSD interest rate as atof December 31, 2017.2023.
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 1% | Increase of 0.5% | Decrease of 0.5% | Decrease of 1% | ||
| Type of instrument | $ millions | ||||
| Fixed-USD interest debentures | 58.2 | 29.6 | (1,107.9) | (30.7) | (62.4) | 57.9 | 29.8 | (1,099.8) | (31.6) | (65.2) |
| Swap transactions | 10.1 | 5.1 | (2.7) | (5.3) | (10.8) | |||||
| NIS/USD swap | 33.1 | 22.4 | 64.0 | (11.7) | (23.6) | 15.1 | 7.8 | (4.8) | (8.2) | (16.7) |
| Total | 101.4 | 57.1 | (1,046.6) | (47.7) | (96.8) | 73.0 | 37.6 | (1,104.6) | (39.8) | (81.9) |
The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the LIBORUSD interest rate as atof December 31, 2016.2022.
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 1% | Increase of 0.5% | Decrease of 0.5% | Decrease of 1% | ||
| Type of instrument | $ millions | ||||
| Fixed-USD interest debentures | 62.9 | 32.1 | (1,077.8) | (33.4) | (68.1) | 66.7 | 34.4 | (1,101.8) | (36.5) | (75.4) |
| Swap transactions | 13.4 | 6.8 | (5.5) | (7.0) | (14.3) | |||||
| NIS/USD swap | 31.8 | 16.2 | 3.3 | (16.7) | (33.9) | 18.6 | 9.4 | 23.1 | (9.3) | (19.2) |
| Total | 108.1 | 55.1 | (1,080.0) | (57.1) | (116.3) | 85.3 | 43.8 | (1,078.7) | (45.8) | (94.6) |
The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the NIS interest rate as atof December 31, 2017.2023.
| Sensitivity to changes in the shekel interest rate | Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | ||
| Increase of 1% | Increase of 0.5% | Decrease of 0.5% | Decrease of 1% | ||
| Type of instrument | $ millions | ||||
| Fixed-interest long-term loan | 3.7 | 1.9 | (86.0) | (2.0) | (4.0) | 0.2 | 0.1 | (132.1) | (0.1) | (0.2) |
| Fixed rate debentures (series E) | 20.1 | 10.2 | (470.9) | (10.5) | (21.3) | |||||
| Fixed rate debentures | 12.5 | 6.4 | (272.0) | (6.7) | (13.8) | |||||
| NIS/USD swap | (25.9) | (13.1) | 64.0 | 13.5 | 27.5 | (15.1) | (7.8) | (4.8) | 8.2 | 16.9 |
| Total | (2.1) | (1.0) | (492.9) | 1.0 | 2.2 | (2.4) | (1.3) | (408.9) | 1.4 | 2.9 |
The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the NIS interest rate as atof December 31, 2016.2022.
| Sensitivity to changes in the shekel interest rate | Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | ||
| Increase of 1% | Increase of 0.5% | Decrease of 0.5% | Decrease of 1% | ||
| Fixed-interest long-term loan | 7.5 | 3.8 | (156.9) | (4.0) | (8.1) |
| Fixed rate debentures (series E) | 20.3 | 10.3 | (405.5) | (10.7) | (21.7) |
| NIS/USD swap | (32.8) | (16.7) | 3.3 | 17.3 | 35.1 |
| Total | (5.0) | (2.6) | (559.1) | 2.6 | 5.3 |
| Type of instrument | |||||||||
| Fixed-interest long-term loan | 0.6 | 0.3 | (172.3) | (0.3) | (0.6) |
| Fixed rate debentures | 15.4 | 7.9 | (395.3) | (8.3) | (17.1) |
| NIS/USD swap | (19.0) | (9.7) | 23.1 | 10.9 | 22.8 |
| Total | (3.0) | (1.5) | (544.5) | 2.3 | 5.1 |
The table below sets forth the sensitivity of certain financial instruments hedging energy price risks to 5%0.5% and 10%1% increases and decreases in energy pricesthe Euro interest rate as of December 31, 2016.2023.
| Sensitivity to changes in the Euro interest rate | Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | ||
| Type of instrument | $ millions | ||||
| Long-term loans from banks and others | 6.5 | 3.3 | (276.7) | (3.3) | (6.7) |
The table below sets forth the sensitivity of certain financial instruments to 0.5% and 1% increases and decreases in the Euro interest rate as of December 31, 2022.
| Sensitivity to changes in the Euro interest rate | Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | ||
| Increase of | Increase of | 0.5% | Decrease of | Decrease of | |
| Type of instrument | $ millions | ||||
Marine Shipping Price Risk
We purchase hedges on partship substantial amounts of goods worldwide using marine shipments. We execute some hedging transactions to reduce a portion of our exposure to marine bulk shipping prices. Hedging is executed by the appropriate personnel, after consultation with overseas experts.
As of December 31, 2023, there are no hedging transactions for marine shipping.
The table below sets forth the sensitivity of instruments hedging marine shipping price risk to 5% and 10% increases and decreases in marine shipping prices as of December 31, 2017.2022.
Increase (decrease) in fair value | Fair value | Increase (decrease) in fair value | |||
| Increase of 10% | Increase of 5% | Decrease of 5% | Decrease of 10% | ||
| Type of instrument | $ millions | ||||
| Marine shipping hedges | | | | | |
ICL Group Limited 270
Not Applicable.
Item 13 – DEFAULTS, DIVIDEND ARRANGEMENTS AND DELINQUENCIES
Not Applicable.
Item 14 – MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
Not Applicable.
A. DISCLOSURE CONTROLS AND PROCEDURES
ICL’s Chief Executive Officer and Chief Financial Officer, after evaluating the effectiveness of ICL’s disclosure controls and procedures (as defined in Exchange Act Rule 13a-15(e)13a-15(e)) as of the end of the period covered by this annual report, have concluded that, as of such date, ICL’s disclosure controls and procedures were effective to ensure that the information required in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and such information is accumulated and communicated to its management, including its chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure.
B. MANAGEMENT’S ANNUAL REPORT ON INTERNAL CONTROLS OVER FINANCIAL REPORTING
ICL’s management is responsible for establishing and maintaining adequate internal control over financial reporting. ICL’s internal control over financial reporting system was designed by, or under the supervision of, the Chief Executive Officer and Chief Financial Officer, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of its consolidated financial statements, for external purposes, in accordance with generally accepted accounting principles. These include those policies and procedures that:
| pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect transactions and dispositions of our assets; |
ICL Group Limited 271 provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements, in accordance with generally accepted accounting principles, and that receipts and expenditures are being made only in accordance with authorization of our management and directors; and |
| provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. |
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, effective control over financial reporting cannot, and does not, provide absolute assurance of achieving our control objectives. Also, projections of, and any evaluation of effectiveness of the internal controls in future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Our management, including our Chief Executive Officer and our Chief Financial Officer, assessed the effectiveness of ICL’s internal control over financial reporting as of December 31, 2017.2023. In making this assessment, our management used the criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission of 2013 (COSO). Based on such assessment, our management has concluded that, as of December 31, 2017,2023, ICL’s internal control over financial reporting is effective based on those criteria.
C. Attestation Report of the Registered Public Accounting Firm
Somekh Chaikin, member firm of KPMG International, an independent registered public accounting firm, has audited and reported on the effectiveness of ICL’s internal controls over financial reporting as of December 31, 2017.2023. See Somekh Chaikin’s attestation report on page F-2 of this annual report.report.
D. Changes in internal control over financial reporting
There has been no identified change in our internal control over financial reporting in connection with the evaluation required by Rules 13a-15 or 15d-15 that occurred during the period covered by this annual report that has materially affected, or is likely to materially affect, our internal control over financial reporting.reporting.
Our Board of Directors has determined, based on qualification statements delivered to the Company, that Boardeach of the members Ms. Ruth Ralbag and Mr. Lior Reitblatt shall serve as financial experts of theour Audit and Accounting Committee, Dr. Miriam Haran, Ms. Dafna Gruber, Mr. Lior Reitblatt and Mr. Gadi Lesin qualify as thataudit committee financial experts, as such term is defined in Item 16A(b) of Form 20-F, and that all members of the Audit and Accounting Committee, Ms. Ruth Ralbag, Mr. Lior Reitblatt and Dr. Miriam Haran, are financially literate and are independent directors for the purposes Rule of 10A-3 of the Exchange Act and of the NYSE trade listing requirements.
Item 16B – CODE OF ETHICSCONDUCT
On February 5, 2024, Our Board of Directors have adoptedCompany launched a new Code of Conduct that applies to our to Board of Directors, senior management, contractors, suppliers and employees, including our principal executive officer, principal financial officer, principal accounting officer or controllerChief Executive Officer, Chief Financial Officer, Controller and any other persons who perform similar functions for us. Our Code of EthicsConduct is available, on our website, www.icl-group.com.https://www.icl-group.com/about-us/governance/. We intend to disclose future amendments to our code of conduct, or any waivers of such code, on our website or in public filings. The reference to our website is intended to be an inactive textual reference and the information on, or accessible through, our website is not intended to be part of this Annual Report.
Somekh Chaikin, a member firm of KPMG International, located in Tel Aviv, Israel, PCAOB ID 1057, has served as our independent registered public accounting firm for 20172023 and 2016. Following2022. The following are the billedSomekh Chaikin's and other KPMG participating firms' fees, for their professional services in each of thosethe respective fiscal years:
| 2017 | 2016 | |
| US$ thousands | US$ thousands |
| Audit fees(1) | 5,132 | 5,310 |
| Audit-related fees(2) | 395 | 360 |
| Tax fees(3) | 1,473 | 1,250 |
| Total | 7,000 | 6,920 |
2023 | 2022 | |
US$ thousands | US$ thousands |
Audit fees (1) | 3,963 | 4,468 |
Audit-related fees (2) | 30 | 377 |
Tax fees (3) | 1,262 | 822 |
| Total | 5,255 | 5,667 |
(1) Audit fees are the aggregate fees billed or expected to be billed for the audit of our annual financial statements. This category also includes services that are generally provided by the independent accountant, such as consents and review of documents filed with the SEC.
(2) Audit-related Fees are the aggregate fees billed for assurance and related services rendered during the years ended December 31, 2023 and 2022, that are reasonably related to the performance of the audit and are not reported under Auditaudit fees. These fees include mainly audits of financial statements of a carve-out entity in anticipation of a subsequent divestiture and accounting consultation on proposed transactions.
(3) Tax fees are the aggregate fees billed for professional services rendered during the years ended December 31, 2023 and 2022, rendered for tax compliance, tax advice, and tax planning, assistance with tax audits and appeals.
Audit Committee’s pre-approval policies and procedures
All services provided by our independent auditors are approved in advance by either the Audit and Accounting Committee or members thereof, to whom authority has been delegated, in accordance with the Audit and Accounting Committee's pre-approval procedure respecting such services.services.
ICL Group Limited 273
Item 16D – EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
Not Applicable.
Not Applicable.
Item 16F – CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
Not Applicable.
Item 16G – CORPORATE GOVERNANCE
Corporate Governance Practices
Majority Independent Board.Under Section 303A.01 of the NYSE Listed Company Manual (the “LCM”), a |
Nominating/Corporate Governance Committee.Under Section 303A.04 of the LCM, a |
ICL Group Limited 274
| • | Equity Compensation Plans. Under Section 303A.08 of the LCM, shareholders must be given the opportunity to vote on all equity‑compensation plans and material revisions thereto, with certain limited exemptions as described therein. We follow the requirements of the |
| • | Shareholder Approval of Securities Issuances. Under Section 312.03 of the LCM, shareholder approval is a prerequisite to (a) issuing |
| Some or all of the consideration is other than cash or listed securities or the transaction is not on market terms; and |
| The transaction will increase the relative holdings of a 5% shareholder or will cause any person to become, as a result of the issuance, a 5% shareholder. |
Except as stated above, we intend to comply with virtually all the rules applicable to U.S.US companies listed on the NYSE. We may decide in the future to use additional and/or other foreign private issuer exemptions with respect to some or all of the other NYSE listing requirements. Following governance practices of our home country, Israel, as opposed to the requirements that would otherwise apply to a company listed on the NYSE, may provide less protection than is accorded to investors under NYSE listing requirements applicable to domestic issuers. For morefurther information, see “Item 3 - Key Information— D. Risk Factors— As a foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of applicable SEC and NYSE requirements, which may result in less protection than is afforded to investors under rules applicable to domestic issuers”Factors”.
Item 16H – MINE SAFETY DISCLOSURE
Not applicable.
Not applicable.
Item 16J – Insider Trading Policy
Not applicable.
Item 16K – Cybersecurity
ICL’s global cybersecurity strategy has been designed based on industry standards, such as the NIST Cybersecurity Framework, and resides on three fundamental pillars: (a) plants and operational security, (b) critical assets & data protection, and (c) fraud prevention. These pillars provide a framework for assessing cybersecurity risk and identifying and managing cybersecurity threats and incidents, including threats and incidents associated with ICL’s use of services, applications and products provided by third-party vendors and service providers. Although we conduct third-party examination, onboarding, and other procedures designed to assess the data privacy and cybersecurity practices of third-party vendors and service providers (including risk assessments and contractual protections), our ability to monitor or control the data privacy and cybersecurity practices of third parties is limited and there can be no assurance that we can detect, prevent, mitigate, or remediate the risk of any weakness, compromise or failure in the information systems, software, networks and other assets owned or controlled by our third-party vendors and service providers. When we do become aware that a third-party vendor or service provider has experienced any compromise or failure, we attempt to mitigate our risk, including by terminating such third party’s connection to our information systems and networks where appropriate.
As cyberattacks evolve and become more sophisticated, ICL has had to strengthen its overall resilience, including its prevention, monitoring, mitigation, and remediation efforts. As part of such efforts, ICL routinely reviews, reinforces, and tests its cybersecurity processes and procedures, including its business continuity plans, through exercises in the areas of cybersecurity.
The outcome of such exercises is an important part of a feedback process designed to improve ICL’s cybersecurity posture and culture and raise the level of cybersecurity awareness and preparedness of certain key personnel. ICL also retains cybersecurity intelligence services, as well as the services of a security operations center that operates 24 hours a day, as part of our incident management process. We also conduct internal and third-party risk assessments of our information systems and networks in cooperation with several leading Israeli and international companies in the field of cybersecurity. As part of our ongoing efforts to strengthen our cybersecurity defenses, in 2019, we began conducting comprehensive Cyber Maturity surveys approximately every 18 months in cooperation with a leading international consulting firm, and we plan to conduct the next such survey in 2024. ICL is also part of the critical national infrastructure of Israel, and as such, we continuously monitor communications from and cooperate with Israel’s National Cyber Emergency Response Team (“National CERT”), which is part of (the Israel National Cyber Directorate), as well as Israel’s Ministry of Energy and Ministry of Environmental Protection for the purpose of protecting our two critical plants from a variety of risks, including cybersecurity risks. Our Internal Auditor also performs several audits each year on our cybersecurity programs compliance with ICL’s policies and regulations in the field of cybersecurity. Other lines of action also include our management undergoing periodictraining and practical drills in cyber-security approximately every 18 months. These exercises are designed to simulate real-world cyber-attacks, allowing our management to enhance their skills and preparedness in handling potential threats.
ICL Group Limited 276
Our Global IT team handles the operational cybersecurity policies and measures regarding ICL’s global infrastructures, in collaboration with the plants' engineering and control units. In an effort to effectively prevent, detect, and respond to cybersecurity threats and incidents, the Global IT team employs a multi-layered cybersecurity risk management program supervised by our Vice President Chief Information Security Officer (“CISO”), whose team is responsible for leading enterprise-wide cybersecurity strategy, policy, architecture, and processes. Such responsibilities include identifying, considering and assessing material cybersecurity threats and incidents on an ongoing basis, establishing processes designed to detect, prevent and monitor potential cybersecurity risks, implementing mitigation and remedial measures, and maintaining our cybersecurity programs. Our CISO has served in the role of CISO for 5 years and has significant expertise in cybersecurity technology, including serving in key leadership positions, such as Head of the National CERT and Chief Executive Officer of a cyber strategic consulting company. As part of ICL’s incident response processes, our CISO has a direct line of communication with our Chief Executive Officer and provides updates on certain cybersecurity threats and incidents to the Audit Committee and as required, the Board of Directors, based on our management’s assessment of risk.
As part of its oversight responsibilities, the Audit Committee receives annual update on our cybersecurity practices as well as technology, cybersecurity and information security risks from our CISO. These annual updates include topics related to cybersecurity, data privacy, and risk management processes, such as third-party assessments of our cybersecurity programs, updates to our cybersecurity programs and mitigation strategies, and other cybersecurity developments.
Cybersecurity risk management is an integral part of our overall enterprise risk management program, which is overseen by the Board of Directors, including our Audit Committee. As part of its enterprise risk management efforts, the Board of Directors also meets with senior management, including the CISO, to assess and respond to critical business risks, including those that may arise from cybersecurity threats and incidents. The CISO meets with our Global Executive Committee (GEC)quarterly and the Board of Directors annually to review and discuss our technology, cybersecurity, and information security strategies and approve our technology, cybersecurity, and information security plans.
Despite our efforts and investment in many resources over the years to improve the reliability of our cybersecurity programs and to prevent cybersecurity incidents, complete protection in the field of cybersecurity cannot be guaranteed and we can make no assurances that we have not experienced an undetected cybersecurity incident, including an incident that may have been material. For further information on cybersecurity risks, see “Item 3 - Key Information— D. Risk Factors— Significant disruptions in our, or our service providers’, information technology systems or breaches of our, or our service providers’, information security systems could adversely affect our business”.
ICL Group Limited 277
Item 17 – FINANCIAL STATEMENTS
See “Item“Item 18 - Financial Statements”Statements”.
See page F-1.FS-1.
Item 19 – EXHIBITS
We have filed certain exhibits to our Form 20-F filed with the SEC, which are available for perusal at: www.sec.gov.
101.INS | XBRL Instance Document |
101.SCH | XBRL Taxonomy Extension Schema Document |
101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF | XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB | XBRL Taxonomy Extension Label Linkbase Document |
101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document |
101.INS | XBRL Instance Document |
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
| By: | /s/ | |||
| Name: | ||||
| Title: | Chief Financial Officer | |||
| By: | /s/ Aya Landman | |||
| Name: | Aya Landman | |||
| Title: | VP, Chief Compliance Officer & Corporate Secretary | |||
Date: March 14, 2024
ICL Group Limited 279
Consolidated Financial Statements
As of December 31, 2023
ICL Group Ltd | |
Consolidated Financial Statements as of December 31, 2023
Somekh Chaikin | |||
KPMG Millennium Tower | |||
17 Ha'arba'a Street, PO Box 609 | |||
Tel Aviv 61006 Israel | Telephone 972 3 684 8000 Fax 972 3 684 8444 Internet www.kpmg.co.il |
Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders
Opinions on the Consolidated Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of Israel ChemicalsICL Group Ltd. and subsidiaries (the(the “Company”) as of December 31, 20172023 and 2016,2022, and the related consolidated statements of income, comprehensive income, changes in equity,, and cash flows for each of the years in the three-yearthree-year period ended December 31, 2017,2023, and the related notes (collectively, the "consolidated financial statements"). We also have audited the Company’s internal control over financial reporting as of December 31, 2017,2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 20172023 and 2016,2022, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2017,2023, in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2017,2023, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway CommissionCommission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the auditaudits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement,, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board.generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board,generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Useful lives of the long-lived assets associated with Dead Sea Works Ltd. concession
As discussed in Note 18b (1) to the consolidated financial statements, the concession of Dead Sea Works Ltd. (DSW) will end on March 31, 2030. The consolidated financial statements were prepared based on the Company's assumption that it is more likely than not that DSW will continue to operate its long-lived assets for their remaining useful lives, which extend beyond the term of the current concession period, by obtaining the renewed concession or by operating the assets for an alternative holder.
We identified the evaluation of the useful lives of the long-lived assets associated with DSW's concession (hereinafter – the relevant assets) as a critical audit matter. Specifically, challenging auditor judgment was required to evaluate the Company’s determination that the useful lives of the relevant assets exceed the current concession period due to uncertainty relating to concession renewal and to effects from potential changes of the concession holder. Changes in the estimated useful lives of the relevant assets could have a significant effect on the depreciation expenses of these assets.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of an internal control related to the determination of useful lives of the long-lived assets associated with the with Dead Sea Works Ltd. concession. We evaluated the Company's estimate regarding the useful lives of the relevant assets by examining its analysis of potential alternatives of operating the assets for an alternative concession holder, as well as considering relevant publicly available information, such as, the Concession Law and the report released by the Israeli Ministry of Finance regarding the actions that the government may take towards the end of the concession period.
Somekh Chaikin
Member Firm of KPMG International
We have served as the Company’s auditor since 2006.
Tel Aviv, Israel
March 13, 2024
Somekh Chaikin, a partnership registered under the Israeli partnership
Ordinance, is the Israeli member firm of KPMG International,
a Swiss cooperative.
| 2017 | 2016 | ||
| Note | $ millions | $ millions |
| Current assets | |||
| Cash and cash equivalents | 83 | 87 | |
| Short-term investments and deposits | 6 | 90 | 29 |
| Trade receivables | 932 | 966 | |
| Inventories | 7 | 1,226 | 1,267 |
| Assets held for sale | 11 | 169 | - |
| Other receivables | 15,8 | 225 | 222 |
| Total current assets | 2,725 | 2,571 | |
| Non-current assets | |||
| Investments in equity-accounted investees | 9 | 29 | 153 |
| Financial assets available for sale | 212 | 253 | |
| Deferred tax assets | 18 | 132 | 150 |
| Property, plant and equipment | 12 | 4,521 | 4,309 |
| Intangible assets | 13 | 722 | 824 |
| Other non-current assets | 10,19,15 | 373 | 292 |
| Total non-current assets | 5,989 | 5,981 | |
| Total assets | 8,714 | 8,552 | |
| Current liabilities | |||
| Short-term credit | 16 | 822 | 588 |
| Trade payables | 790 | 644 | |
| Provisions | 20 | 78 | 83 |
| Liabilities held for sale | 11 | 43 | - |
| Other current liabilities | 15,17 | 595 | 708 |
| Total current liabilities | 2,328 | 2,023 | |
| Non-current liabilities | |||
| Long-term debt and debentures | 16 | 2,388 | 2,796 |
| Deferred tax liabilities | 18 | 228 | 303 |
| Long-term employee provisions | 19 | 640 | 576 |
| Provisions | 20 | 193 | 185 |
| Other non-current liabilities | 7 | 10 | |
| Total non-current liabilities | 3,456 | 3,870 | |
| Total liabilities | 5,784 | 5,893 | |
| Equity | 22 | ||
| Total shareholders’ equity | 2,859 | 2,574 | |
| Non-controlling interests | 71 | 85 | |
| Total equity | 2,930 | 2,659 | |
| Total liabilities and equity | 8,714 | 8,552 |
2023 | 2022 | ||
Note | $ millions | $ millions |
Current assets | |||
Cash and cash equivalents | 420 | 417 | |
Short-term investments and deposits | 172 | 91 | |
Trade receivables | 1,376 | 1,583 | |
Inventories | 6 | 1,703 | 2,134 |
Prepaid expenses and other receivables | 7 | 363 | 323 |
Total current assets | 4,034 | 4,548 | |
Non-current assets | |||
Deferred tax assets | 15 | 152 | 150 |
Property, plant and equipment | 10 | 6,329 | 5,969 |
Intangible assets | 11 | 873 | 852 |
Other non-current assets | 9,16 | 239 | 231 |
Total non-current assets | 7,593 | 7,202 | |
Total assets | 11,627 | 11,750 | |
Current liabilities | |||
Short-term debt | 13 | 858 | 512 |
Trade payables | 912 | 1,006 | |
Provisions | 17 | 85 | 81 |
Other payables | 14 | 783 | 1,007 |
Total current liabilities | 2,638 | 2,606 | |
Non-current liabilities | |||
Long-term debt and debentures | 13 | 1,829 | 2,312 |
Deferred tax liabilities | 15 | 489 | 423 |
Long-term employee liabilities | 16 | 354 | 402 |
Long-term provisions and accruals | 17 | 224 | 234 |
Other | 56 | 60 | |
Total non-current liabilities | 2,952 | 3,431 | |
Total liabilities | 5,590 | 6,037 | |
Equity | |||
Total shareholders’ equity | 19 | 5,768 | 5,464 |
Non-controlling interests | 269 | 249 | |
Total equity | 6,037 | 5,713 | |
Total liabilities and equity | 11,627 | 11,750 |
The accompanying notes are an integral part of these consolidated financial statements.
| 2017 | 2016 | 2015 | ||
| Note | $ millions | $ millions | $ millions |
| Sales | 23 | 5,418 | 5,363 | 5,405 |
| Cost of sales | 23 | 3,746 | 3,703 | 3,602 |
| Gross profit | 1,672 | 1,660 | 1,803 | |
| Selling, transport and marketing expenses | 23 | 746 | 722 | 653 |
| General and administrative expenses | 23 | 261 | 321 | 350 |
| Research and development expenses | 23 | 55 | 73 | 74 |
| Other expenses | 23 | 90 | 618 | 211 |
| Other income | 23 | (109) | (71) | (250) |
| Operating income (loss) | 629 | (3) | 765 | |
| Finance expenses | 229 | 157 | 160 | |
| Finance income | (105) | (25) | (52) | |
| Finance expenses, net | 23 | 124 | 132 | 108 |
| Share in earnings of equity-accounted investees | 9 | - | 18 | 11 |
| Income (loss) before income taxes | 505 | (117) | 668 | |
| Provision for income taxes | 18 | 158 | 55 | 162 |
| Net income (loss) | 347 | (172) | 506 | |
| Net loss attributable to the non-controlling interests | (17) | (50) | (3) | |
| Net income (loss) attributable to the shareholders of the Company | 364 | (122) | 509 | |
| Earnings (loss) per share attributable to the shareholders of the Company: | ||||
| Basic earnings (loss) per share (in dollars) | 0.29 | (0.10) | 0.40 | |
| Diluted earnings (loss) per share (in dollars) | 25 | 0.29 | (0.10) | 0.40 |
| Weighted-average number of ordinary shares outstanding: | 25 | |||
| Basic (in thousands) | 1,276,072 | 1,273,295 | 1,271,624 | |
| Diluted (in thousands) | 1,276,997 | 1,273,295 | 1,272,256 |
2023 | 2022 | 2021 | ||
Note | $ millions | $ millions | $ millions |
Sales | 20 | 7,536 | 10,015 | 6,955 |
Cost of sales | 20 | 4,865 | 4,983 | 4,344 |
Gross profit | 2,671 | 5,032 | 2,611 | |
Selling, transport and marketing expenses | 20 | 1,093 | 1,181 | 1,067 |
General and administrative expenses | 20 | 260 | 291 | 276 |
Research and development expenses | 20 | 71 | 68 | 64 |
Other expenses | 20 | 128 | 30 | 57 |
Other income | 20 | (22) | (54) | (63) |
Operating income | 1,141 | 3,516 | 1,210 | |
Finance expenses | 259 | 327 | 216 | |
Finance income | (91) | (214) | (94) | |
Finance expenses, net | 20 | 168 | 113 | 122 |
Share in earnings of equity-accounted investees | 1 | 1 | 4 | |
Income before taxes on income | 974 | 3,404 | 1,092 | |
Taxes on income | 15 | 287 | 1,185 | 260 |
Net income | 687 | 2,219 | 832 | |
Net income attributable to the non-controlling interests | 40 | 60 | 49 | |
Net income attributable to the shareholders of the Company | 647 | 2,159 | 783 | |
Earnings per share attributable to the shareholders of the Company: | 22 | |||
Basic earnings per share (in dollars) | 0.50 | 1.68 | 0.61 | |
Diluted earnings per share (in dollars) | 0.50 | 1.67 | 0.60 | |
Weighted-average number of ordinary shares outstanding: | 22 | |||
Basic (in thousands) | 1,289,361 | 1,287,304 | 1,282,807 | |
Diluted (in thousands) | 1,290,668 | 1,289,947 | 1,287,051 |
The accompanying notes are an integral part of these consolidated financial statements.
ICL Group LimitedAnnual Report 2
Consolidated Statements of Comprehensive Income for the Year Ended December 31
2023 | 2022 | 2021 | |
$ millions | $ millions | $ millions |
Net income | 687 | 2,219 | 832 |
Components of other comprehensive income that will be reclassified subsequently to net income | |||
Foreign currency translation differences | 80 | (146) | (105) |
Change in fair value of cash flow hedges transferred to the statement of income | 59 | 101 | (15) |
Effective portion of the change in fair value of cash flow hedges | (41) | (119) | 13 |
Tax relating to items that will be reclassified subsequently to net income | (4) | 4 | - |
94 | (160) | (107) | |
Components of other comprehensive income that will not be reclassified to net income | |||
Net changes of investments at fair value through other comprehensive income | - | - | 155 |
Actuarial gains from defined benefit plans | 33 | 83 | 85 |
Tax relating to items that will not be reclassified to net income | (8) | (12) | (44) |
25 | 71 | 196 | |
Total comprehensive income | 806 | 2,130 | 921 |
Comprehensive income attributable to the non-controlling interests | 35 | 40 | 54 |
Comprehensive income attributable to the shareholders of the Company | 771 | 2,090 | 867 |
The accompanying notes are an integral part of these consolidated financial statements.
ICL Group LimitedAnnual Report 3
Consolidated Statements of Changes in Equity
Attributable to the shareholders of the Company | Non- controlling interests | Total equity | |||||||
Share capital | Share premium | Cumulative translation adjustment | Capital reserves | Treasury shares, at cost | Retained earnings | Total shareholders’ equity | |||
$ millions | |||||||||
For the year ended December 31, 2023 | |||||||||
Balance as of January 1, 2023 | 549 | 233 | (570) | 127 | (260) | 5,385 | 5,464 | 249 | 5,713 |
Share-based compensation | - | 1 | - | 6 | - | - | 7 | - | 7 |
Dividends | - | - | - | - | - | (474) | (474) | (15) | (489) |
Comprehensive income | - | - | 85 | 14 | - | 672 | 771 | 35 | 806 |
Balance as of December 31, 2023 | 549 | 234 | (485) | 147 | (260) | 5,583 | 5,768 | 269 | 6,037 |
The accompanying notes are an integral part of these consolidated financial statements.
ICL Group LimitedAnnual Report 4
Consolidated Statements of Changes in Equity (cont'd)
Attributable to the shareholders of the Company | Non- controlling interests | Total equity | |||||||
Share capital | Share premium | Cumulative translation adjustment | Capital reserves | Treasury shares, at cost | Retained earnings | Total shareholders’ equity | |||
$ millions | |||||||||
For the year ended December 31, 2022 | |||||||||
Balance as of January 1, 2022 | 548 | 224 | (444) | 138 | (260) | 4,321 | 4,527 | 209 | 4,736 |
Share-based compensation | 1 | 9 | - | 3 | - | - | 13 | - | 13 |
Dividends | - | - | - | - | - | (1,166) | (1,166) | - | (1,166) |
Comprehensive income | - | - | (126) | (14) | - | 2,230 | 2,090 | 40 | 2,130 |
Balance as of December 31, 2022 | 549 | 233 | (570) | 127 | (260) | 5,385 | 5,464 | 249 | 5,713 |
The accompanying notes are an integral part of these consolidated financial statements.
ICL Group LimitedAnnual Report 5
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions |
| Net income (loss) | 347 | (172) | 506 |
| Components of other comprehensive income that will be reclassified subsequently to net income (loss) | |||
| Currency translation differences | 152 | (90) | (205) |
| Changes in fair value of derivatives designated as a cash flow hedge | - | (1) | (2) |
| Changes in fair value of financial assets available for sale | (57) | 17 | - |
| Tax income (expense) relating to items that will be reclassified subsequently to net income (loss) | 5 | (5) | - |
| 100 | (79) | (207) | |
| Components of other comprehensive income that will not be reclassified to net income (loss) | |||
| Actuarial gains (losses) from defined benefit plan | (17) | (48) | 63 |
| Tax income (expense) relating to items that will not be reclassified to net income (loss) | 3 | 8 | (15) |
| (14) | (40) | 48 | |
| Total comprehensive income (loss) | 433 | (291) | 347 |
| Comprehensive loss attributable to the non-controlling interests | (13) | (59) | (9) |
| Comprehensive income (loss) attributable to the shareholders of the Company | 446 | (232) | 356 |
Attributable to the shareholders of the Company | Non- controlling interests | Total equity | |||||||
Share capital | Share premium | Cumulative translation adjustment | Capital reserves | Treasury shares, at cost | Retained earnings | Total shareholders’ equity | |||
$ millions | |||||||||
For the year ended December 31, 2021 | |||||||||
Balance as of January 1, 2021 | 546 | 204 | (334) | 22 | (260) | 3,752 | 3,930 | 158 | 4,088 |
Share-based compensation | 2 | 20 | - | (16) | - | - | 6 | - | 6 |
Dividends | - | - | - | - | - | (276) | (276) | (3) | (279) |
Comprehensive income | - | - | (110) | 132 | - | 845 | 867 | 54 | 921 |
Balance as of December 31, 2021 | 548 | 224 | (444) | 138 | (260) | 4,321 | 4,527 | 209 | 4,736 |
The accompanying notes are an integral part of these consolidated financial statements.
ICL Group LimitedAnnual Report 6
| For the year ended December 31, 2017 | |||||||||
| Balance as at January 1, 2017 | 544 | 174 | (481) | 79 | (260) | 2,518 | 2,574 | 85 | 2,659 |
| Share-based compensation | 1 | 12 | - | 3 | - | - | 16 | - | 16 |
| Dividends | - | - | - | - | - | (177) | (177) | (1) | (178) |
| Comprehensive income (loss) | - | - | 148 | (52) | - | 350 | 446 | (13) | 433 |
| Balance as at December 31, 2017 | 545 | 186 | (333) | 30 | (260) | 2,691 | 2,859 | 71 | 2,930 |
2023 | 2022 | 2021 | |
$ millions | $ millions | $ millions |
Cash flows from operating activities | |||
Net income | 687 | 2,219 | 832 |
Adjustments for: | |||
Depreciation and amortization | 536 | 498 | 490 |
Reversal of fixed assets impairment | - | - | (6) |
Exchange rate, interest and derivative, net | 24 | 157 | 99 |
Tax expenses | 287 | 1,185 | 260 |
Change in provisions | (32) | (83) | (4) |
Other | 29 | (15) | (21) |
844 | 1,742 | 818 | |
Change in inventories | 465 | (527) | (267) |
Change in trade receivables | 252 | (215) | (426) |
Change in trade payables | (101) | (42) | 274 |
Change in other receivables | 26 | (46) | 9 |
Change in other payables | (210) | 107 | 107 |
Net change in operating assets and liabilities | 432 | (723) | (303) |
Interest paid, net | (115) | (106) | (89) |
Income taxes paid, net of refund | (253) | (1,107) | (193) |
Net cash provided by operating activities | 1,595 | 2,025 | 1,065 |
Cash flows from investing activities | |||
Proceeds (payments) from deposits, net | (88) | (36) | 355 |
Purchases of property, plant and equipment and intangible assets | (780) | (747) | (611) |
Proceeds from divestiture of assets and businesses, net of transaction expenses | 4 | 33 | 39 |
Business combinations | - | (18) | (365) |
Other | 1 | 14 | 3 |
Net cash used in investing activities | (863) | (754) | (579) |
Cash flows from financing activities | |||
Dividends paid to the Company's shareholders | (474) | (1,166) | (276) |
Receipt of long-term debt | 633 | 1,045 | 1,230 |
Repayments of long-term debt | (836) | (1,181) | (1,120) |
Repayments of short-term debt | (25) | (21) | (58) |
Receipts (payments) from transactions in derivatives | 5 | 20 | (17) |
Dividend paid to the non-controlling interests | (15) | - | (3) |
Net cash used in financing activities | (712) | (1,303) | (244) |
Net change in cash and cash equivalents | 20 | (32) | 242 |
Cash and cash equivalents as of the beginning of the year | 417 | 473 | 214 |
Net effect of currency translation on cash and cash equivalents | (17) | (24) | 17 |
Cash and cash equivalents as of the end of the year | 420 | 417 | 473 |
The accompanying notes are an integral part of these consolidated financial statements.
| For the year ended December 31, 2016 | |||||||||
| Balance as at January 1, 2016 | 544 | 149 | (400) | 93 | (260) | 2,902 | 3,028 | 160 | 3,188 |
| Share-based compensation | - * | 25 | - | (10) | - | - | 15 | - | 15 |
| Dividends | - | - | - | - | - | (222) | (222) | (4) | (226) |
| Changes in equity of equity-accounted investees | - | - | - | (15) | - | - | (15) | - | (15) |
| Non-controlling interests in business combinations from prior periods | - | - | - | - | - | - | - | (12) | (12) |
| Comprehensive loss | - | - | (81) | 11 | - | (162) | (232) | (59) | (291) |
| Balance as at December 31, 2016 | 544 | 174 | (481) | 79 | (260) | 2,518 | 2,574 | 85 | 2,659 |
ICL Group LimitedAnnual Report 7
| For the year ended December 31, 2015 | |||||||||
| Balance as at January 1, 2015 | 543 | 134 | (201) | 66 | (260) | 2,692 | 2,974 | 26 | 3,000 |
| Issue of shares | 1 | 15 | - | - | - | - | 16 | - | 16 |
| Share-based compensation | - * | - | - | 15 | - | - | 15 | - | 15 |
| Dividends | - | - | - | - | - | (347) | (347) | (1) | (348) |
| Business combinations | - | - | - | 14 | - | - | 14 | 144 | 158 |
| Comprehensive income (loss) | - | - | (199) | (2) | - | 557 | 356 | (9) | 347 |
| Balance as at December 31, 2015 | 544 | 149 | (400) | 93 | (260) | 2,902 | 3,028 | 160 | 3,188 |
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions |
| Cash flows from operating activities | |||
| Net income (loss) | 347 | (172) | 506 |
| Adjustments for: | |||
| Depreciation and amortization | 390 | 401 | 355 |
| Impairment | 28 | 5 | 75 |
| Revaluation of balances from financial institutions and interest expenses, net | 137 | 76 | 44 |
| Share in earnings of equity-accounted investees, net | - | (18) | (11) |
| Other capital losses (gains), net | (54) | 433 | (210) |
| Share-based compensation | 16 | 15 | 15 |
| Deferred tax expenses (income) | (46) | (2) | 5 |
| 471 | 910 | 273 | |
| Change in inventories | 57 | 70 | 25 |
| Change in trade and other receivables | 21 | 150 | (86) |
| Change in trade and other payables | (45) | (90) | (55) |
| Change in provisions and employee benefits | (4) | 98 | (90) |
| Net change in operating assets and liabilities | 29 | 228 | (206) |
| Net cash provided by operating activities | 847 | 966 | 573 |
| Cash flows from investing activities | |||
| Investments in shares and proceeds from deposits, net | (65) | (198) | 34 |
| Business combinations, net of cash acquired | - | - | (351) |
| Purchases of property, plant and equipment and intangible assets | (457) | (632) | (619) |
| Proceeds from divestiture of subsidiaries | 6 | 17 | 364 |
| Proceeds from sale of equity-accounted investee | 168 | - | - |
| Dividends from equity-accounted investees | 3 | 12 | 19 |
| Proceeds from sale of property, plant and equipment | 12 | - | - |
| Other | - | 1 | 6 |
| Net cash used in investing activities | (333) | (800) | (547) |
| Cash flows from financing activities | |||
| Dividends paid to the Company's shareholders | (237) | (162) | (347) |
| Receipt (Repayment) of long-term debt,net | (421) | (87) | 355 |
| Short-term credit from banks and others, net | 147 | 14 | 8 |
| Other | - | (4) | (1) |
| Net cash provided by (used in) financing activities | (511) | (239) | 15 |
| Net change in cash and cash equivalents | 3 | (73) | 41 |
| Cash and cash equivalents as at the beginning of the year | 87 | 161 | 138 |
| Net effect of currency translation on cash and cash equivalents | (2) | (1) | (18) |
| Cash and cash equivalents included as part of assets held for sale | (5) | - | - |
| Cash and cash equivalents as at the end of the year | 83 | 87 | 161 |
For the year ended 31, December | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
| Income taxes paid, net of tax refunds | 127 | 84 | 20 |
| Interest paid | 111 | 112 | 87 |
Note 3 - SignificantMaterial Accounting Policies
The accounting policies in accordance with IFRS are consistently applied by the GroupICL companies for all the periods presented in these consolidated financial statements.
| A. | Basis for Consolidation |
1. Business combinations
| 1. | Subsidiaries |
Subsidiaries are entities controlled by the Group.ICL. The financial statements of the subsidiaries are included in the consolidated financial statements from the date control commenced until the date control ceases to exist. The accounting policiesfinancial statements of subsidiaries have been changed when necessary to align them with theICL's accounting policies adopted by the Group.policies. All intercompany balances and transactions have been eliminated in consolidation.
| Non-controlling interests |
Non-controlling interests comprise the equity of a subsidiary that cannot be attributed, directly or indirectly, to the parent company and they include additional components such as: the equity component of convertible debentures of subsidiaries, share-based payments that will be settled with equity instruments of subsidiaries and share options of subsidiaries.
The Group discontinues applyingCompany’s reporting currency is the equity method from the date it loses significant influenceUSD; however, for most operations located in an associate or joint control in a joint ventureEurope, South America and it accounts for the retained investment as a financial asset or subsidiary, as relevant.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising onfrom acquisition, are translated to USD at exchange rates at the reporting date. The income and expenses of foreign operations are translated to USD at exchange rates at the dates of the transactions. Foreign currency differences are recognized in other comprehensive income and are presented in equity in the foreign currency translation reserve (hereinafter –Translation Reserve). until the foreign entity is sold or liquidated. When a foreign operation is disposed of, the cumulative amount in the Translation Reserve is reclassified to profit or loss as a part of the capital gain or loss on disposal.
When the foreign operation is a non-wholly-ownednon-wholly owned subsidiary of the Company, then the relevant proportionate share of the foreign operation translation difference is allocated to the non-controlling interests. When a foreign operation is disposed of such that control, significant influence or joint control is lost, the cumulative amount in the Translation Reserve related to that foreign operation is reclassified to profit or loss as a part of the gain or loss on disposal. Furthermore, when the Group’s interest in a subsidiary that includes a foreign operation changes, while retaining control in the subsidiary, a proportionate part of the cumulative amount of the translation difference that was recognized in other comprehensive income is reattributed to non-controlling interests.
Generally, foreign currency differences from a monetary item receivable from or payable to a foreign operation, including foreign operations that are subsidiaries, are recognized in profit or loss in the consolidated financial statements. Foreign exchange gains andor losses arising from a monetary item receivable from or payable to a foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part of a net investment in a foreign
ICL Group LimitedConsolidated Financial Statements11
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 3 - Material Accounting Policies (cont'd)
| B. | Foreign Currency (cont'd) | |
operation and are recognized in other comprehensive income and are presented within equity in the Translation Reserve.
| C. | Financial Instruments |
| 1. | Non-derivative financial assets |
ICL has balances of trade and other receivables including service concession receivables and deposits that are held within a business model whose objective is collecting contractual cash flows, which represent solely payments of principal and cash equivalents.interest (for the time value and the credit risk). Accordingly, these financial assets are measured at amortized cost using the effective interest method.
Derecognition of financial assets:
| 2. | Non-derivative financial liabilities |
Non-derivative financial liabilities include bank overdrafts, loans and borrowings from banks and others, marketable debt instruments, finance lease liabilities, and trade and other payables.
Derecognition of the financial liabilities:
Change in terms of debt instruments:
In a substantialnon-substantial modification of terms (or exchange) of debt instruments, the termsnew cash flows are discounted using the original effective interest rate, and the difference between the present value of the existingnew financial liability or part of it, is accounted for as an extinguishmentand the present value of the original financial liability and the recognition of ais recognized in profit or loss. For further information regarding ICL new financial liability.
RCF, see Note 13.
ICL Group LimitedConsolidated Financial Statements12
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 3 - SignificantMaterial Accounting Policies (cont’d)(cont'd)
| C. | Financial Instruments (cont'd) | |
| 3. | Derivative financial instruments |
interest. Derivatives are recognized according to fair value and the changes in value are recorded in the statement of income as financing income or expense, except for derivatives used to hedge cash flows (accounting hedging). The attributable transaction costs are recorded in the statement of income as incurred. Changes in the fair value of the derivatives are recorded in the statement of income, except for derivatives used to hedge cash flows, as detailed below.
Cash flow hedgeshedges:
Changes in the fair value of derivatives used to hedge cash flows, in respect ofaccordance with the effective portion of the hedge, are recorded through other comprehensive income directly in a hedging reserve.
With respect to the non‑effective part,portion, changes in the fair value are recognized in the statement of income. The amount accumulated in the capital reserve is reclassified and included in the statement of income in the same period as the hedged cash flows affected profit or loss under the same line item in the statement of income as the hedged item.
| 4. | CPI-linked assets and liabilities not measured at fair value |
The value of index-linked financial assets and liabilities, which are not measured at fair value, is re-measuredre‑measured every period in accordance with the actual increase/ decrease in the CPI.
| 5. | Share capital |
| D. | Property, plant and equipment |
| 1. | Recognition and measurement |
Property, plant and equipment in the consolidated statements are presented at cost after deducting the related amounts of government grants and less accumulated depreciation and provision for impairment.impairment. The cost includes expenses that can be directly attributed to the acquisition of the asset.asset, including material maintenance expenditures. The cost of assets that were self-constructed includes the cost of the materials and direct labor, as well as any additional costs that are directly attributable to bringing the asset to the required position and condition so that it will be able to function as management intended, as well as an estimate of the costs to dismantle, remove and remove the items and to restore, its location, where there is an obligation to dismantle and remove or to restore the sitefor such, and capitalized borrowing costs. The cost of purchased software, which constitutes an inseparable part of operating the related equipment, is recognized as part of the cost of the equipment.
ICL Group LimitedConsolidated Financial Statements13
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 3 - SignificantMaterial Accounting Policies (cont’d)
| D. | Property, plant and equipment (cont'd) | |
| 2. | Subsequent Costs (after initial recognition) |
The cost of replacing part of an item of property, plant and equipment and other subsequent costs areis recognized as part of the book value of the item, if it is expected that the future economic benefit inherent therein will flow to the GroupICL and that its cost can be reliably measured. The book value of the part that was replaced is derecognized. Routine maintenance costs are charged to the statement of income as incurred.
| 3. | Depreciation |
Depreciation is recorded in the statement of income according to the straight-line method over the estimated useful life of each significant component of the property, plant and equipment items, including material maintenance expenditures. since this most closely reflects the expected pattern of consumption of the future economic benefits embodied in the asset. Owned land is not depreciated.
The estimated useful life for the current period and comparative periods is as follows:
In Years | |
Buildings | 15 - 30 |
Technical equipment and | 5 - 35 |
Dikes and | 20 - 43 |
Other | |
3 - 10 |
(2) Mainly 43 years
The Company reviews, at least at the end of every reporting year, the estimates regarding the depreciation method, useful lives and the residual value, and adjusts them if appropriate. Once every fiveOver the years, the Company makes an active examination of the useful lives of the main property, plant and equipment items and, if required, it updates the said useful lives and/or the residual value. Based on past experience, the Company has succeeded in maintainingto extend the useful lives of part of property, plant and equipment items –beyond the original estimated useful life, as a result of investments therein, adoption of new technologies, implementation of operational excellence processes and other current, ongoing maintenance thereof.
| E. | Intangible Assets |
Intangible assets with a defined useful life, are measured according to cost less accumulated amortization and accumulated losses from impairment. Intangible assets with indefinite useful lives are measured according to cost less accumulated losses from impairment.
| 1. | Goodwill |
Goodwill recorded consequent to the acquisition of subsidiaries is presented at cost less accumulated impairment charges, under intangible assets.
ICL Group LimitedConsolidated Financial Statements14
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 3 - Material Accounting Policies (cont'd)
| E. | Intangible Assets (cont'd) | |
| 2. | Research and development |
Expenditures for research activities are recognized in profit or lossexpensed as incurred.
Development expenditures are recognized as intangible asset only if development costs can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the GroupICL has the intention and sufficient resources to complete development and to use or sell the asset. Other development expenditures costs are recognized in profit or loss as incurred. Subsequent to initial recognition, development expenditures are measured at cost less accumulated amortization and any accumulated impairment loss.
| 3. | Amortization |
Goodwill and intangible assets having an indefinite lifespan are not amortized on a systematic basis but, rather, are examined at least once a year for impairment in value.
Internally generated intangible assets are not systematically amortized as long as they are not available for use, i.e., they are not yet on site or in working condition for their intended use. Accordingly, these intangible assets, such as development costs, are tested for impairment at least once a year, until such date as they are available for use.
The estimated useful life for the current period and comparative periods is as follows:
In Years | |
Concessions and mining rights – over the remaining duration of the rights granted | |
Trademarks | 15 - 20 |
Technology / patents | 7 - 20 |
Customer relationships | 15 - 25 |
Computer applications | |
3 - 10 |
ICL periodically examines the estimated useful life of an intangible asset that is not amortized, at least once a year, in order to determine if events and circumstances continue to support the determination that the intangible asset has an indefinite life.
Deferred expenses in respect of geological surveys are amortized over their useful life based on a geological estimate of the amount of the material that will be produced from the mining site.
The estimates regarding the amortization method and useful life are reviewed, at a minimum, at the end of every reporting year and are adjusted where necessary. The GroupICL assesses the useful life of the customer relationships on an ongoing basis, based on an analysis of all of the relevant factors and evidence, considering the experience the Company has with respect to recurring orders and churn rates and considering the future economic benefits expected to flow to the Company from these customer relationships.
ICL Group LimitedConsolidated Financial Statements15
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 3 - SignificantMaterial Accounting Policies (cont’d)(cont'd)
| F. | Inventories | |
Inventories are measured at the lower of cost or net realizable value. The cost of the inventories includes the costs of purchasing the inventories and bringing itthem to itstheir present location and condition. In the case of work in process and finished goods, the cost includes the proportionate part of the manufacturing overhead based on normal capacity. Net realizationrealizable value is the estimated selling price in the ordinary course of business, after deduction of the estimated cost of completion and the estimated costs required to execute the sale.
The cost of the inventories of raw and auxiliary materials, maintenance materials, finished goods and goods in process, is determined mainly according to the “moving average” method.
If the benefit from stripping costs (costs of removing waste produced as part of a mine's mining activities during its production stage) is attributable to inventories, the Company accounts for these stripping costs as inventories. In a case where the benefit is improved access to the quarry, the Company recognizes the costs as a non‑current addition to the asset, provided the criteria presented in IFRIC 20 are met.
Inventories which are expected to be sold in a period of more than 12 months from the reporting date are presented as non-current inventories, as part of non-current assets.
| G. | Impairment |
| 1. | Non-derivative financial assets |
| 2. | Non-financial assets |
In everyeach reporting period, an examination is made with respect to whether there are signs indicating impairment inimpairment- indicators relating to the value of the Group’sICL’s non-financial assets, other than inventories and deferred tax assets. If such signsindicators exist, the estimated recoverable amount of the asset is calculated. The GroupICL conducts an annual examination, on the same date, of the recoverable amount of goodwill and intangible assets with indefinite useful lives or those that are not available for use – or more frequently if there are indications of impairment.
For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the “cash-generating unit”).further information, see Note 12.
The recoverable amount of an asset or a cash- generatingcash-generating unit is the higher of its value in use or the net selling price (fairfair value less cost of disposal).disposal. When determining the value in use, the GroupICL discounts the anticipated future cash flows according to aan after-tax discount rate that reflects the evaluations of the market's participants regarding the time value of money and the specific risks relating to the asset or to the cash- generatingcash-generating unit, in respect of which the future cash flows expected to derive from the asset or the cash- generatingcash-generating unit were not adjusted. The goodwill is not monitored for internal reporting purposes and, accordingly, it is allocated to the Company’s operating segments and not to the cash- generating units, the level of which is lower than the operating segment.
Assets of the Company's headquarters and administrative facilities do not produce separate cash flows and they serve more than one cash-producingcash-generating unit. Such assets are allocated to cash‑producingcash-generating units on a reasonable and consistent basis and are examined for impairment as part of the examination of impairment of the cash‑producingcash-generating units to which they are allocated.
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 3 - SignificantMaterial Accounting Policies (cont’d)(cont'd)
| H. | Employee Benefits |
| 1. | Defined contribution plans |
A defined contribution plan is a post-employment benefit plan under which the GroupICL pays fixed contributions into a separate entity and has no legal or constructive obligation to pay further amounts.
| 2. | Defined benefit plans |
The movement in the net liability in respect of a defined benefit plan that is recognized in every accounting period in the statement of income is comprised of the following:
The difference, as atof the date of the report, between the net liability as at the beginning of the year plus the movement in profit and lossthe net liability as detailed above, and the actuarial liability less the fair value of the fund assets at the end of the year, reflects the balance of the actuarial income or expenses recognized in other comprehensive income and is recorded in retained earnings. The current interest costs and return on plan assets are recognized as expenses and interest income in the respective financing category.
| 3. | Early Retirement Payments |
Early retirement pay ispayments are recognized as an expense and as a liability when the GroupICL has clearly undertaken to pay it, without any reasonable chance of cancellation, in respect of termination of employees, before they reach the customary age of retirement according to a formal, detailed plan. The benefits provided to employees upon voluntary retirement are charged when the GroupICL proposes athe plan to the employees, encouraging voluntary retirement, it is expected that the proposal will be accepted, and it is possible to reliably estimate the number of employees that will accept the proposal. If benefits are payable more than 12 months after the reporting period, then they are discounted to their present value. The discount rate is the yield at the reporting date on high-quality, index-linked corporate debentures, the denominated currency of which is the payment currency and that have maturity dates approximating the terms of the Group’s obligations.
| 4. | Short‑term benefits |
ICL Group LimitedConsolidated Financial Statements17
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 3 - SignificantMaterial Accounting Policies (cont’d)(cont'd)
| H. | Employee Benefits (cont'd) | |
| 5. | Share-based compensation |
The fair value on the grant date of share-based compensation awards granted to employees is recognized as a salary expense, with a corresponding increase in equity, over the period that the employees become unconditionally entitled to the awards. The amount recognized as an expense in respect of share-based compensation awards that are conditional upon meeting vesting conditions that are service conditions and non-market performance conditions, is adjusted to reflect the number of awards that are expected to vest.
| I. | Provisions |
A provision is recognized when the GroupICL has a present legal or implied obligation, as the result of an event that occurred in the past, that can be reliably estimated, and when it is expected that an outflow of economic benefits will be required in order to settle the obligation. The provisions are made by means of discounting of the future cash flows at a pre-tax interest rate reflecting the current market estimates of the time value of money and the risks specific to the liability, and without taking into account the Company’s credit risk. The book value of the provision is adjusted in every period in order to reflect the amount of time that has elapsed and is recognized as financing expenses. In rare cases where it is not possible to estimate the outcome of a potential liability, no provision is recorded in the financial statements.
| 1. | Provision for environmental costs |
Costs for preventing environmental pollution that increase the life expectancy or efficiency of a facility or decrease or prevent the environmental pollution are recorded as a provision, are capitalized to the cost of the property, plant and equipment and are depreciated according to the usual depreciation rates used by the Group.ICL.
| 2. | Site restoration |
A provision for restructuringreclamation and restoration of ICL's sites is recognized when the GroupCompany has approved a detailed and formal restructuring plan, and the restructuring either has commenced or has been announced publicly. The provision includes direct expenditures caused by the restructuring and necessary for the restructuring, andlegal obligation which are not associated with the continuing activities of the Group.
| 3. | Legal claims |
A provision for legal claims is recognized when the GroupICL has a present legal or constructive obligation as a result of an event that occurred in the past, if it is more likely than not that an outflow of economic resources will be required to settle the obligation and it can be reliably estimated. Where the time value is significant, the provision is measured based on its present value.
| J. | Revenue Recognition |
| 1. | Identifying a contract |
ICL accounts for a contract with a customer only when the following conditions are met: (a) The parties to the contract have approved the contract and they are committed to satisfying the obligations attributable to them; (b) ICL can identify the rights of each party in relation to the goods that will be transferred; (c) ICL can identify the payment terms for the goods that will be transferred; (d) The contract has a commercial substance (i.e. the risk, timing and amount of the entity’s future cash flows are expected to change as a result of the contract); and (e) It is probable that the consideration, to which ICL is entitled to in exchange for the goods transferred to the customer, will be collected.
ICL Group LimitedConsolidated Financial Statements18
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 3 - Material Accounting Policies (cont'd)
| J. | Revenue Recognition (cont'd) |
| 1. | Identifying a contract (cont'd) | |
For the purpose of goodsclause (e) above, ICL takes into consideration its past experience with the customer, the customer's financial stability information, the status and existence of sufficient collateral and the percentage of advances received.
| 2. | Identifying performance obligations |
ICL is a global specialty minerals and chemicals company engaged in the sale of various goods produced in its different segments of operation. ICL's contracts primarily derived from a single performance obligation to deliver the product specified in the ordinary course of businesscontract. For additional information about the Company's products, see note 5 – Operating Segments.
| 3. | Determining the transaction price |
ICL's transaction price is measured at the fair valueamount of the consideration received or receivable, net of returns,specified in the contract with the customer, which it expects to be entitled in exchange for the goods promised to the customer, other than amounts collected for third parties. The variable considerations at ICL, which are mainly trade discounts, commercial returns and volume rebates. Whenrebates, have no material impact on the credit period is short and constitutes the accepted credit in the industry, the future consideration is not discounted.Company's financial statements.
| 4. | Satisfaction of performance obligation |
Revenue is recognized at the point in time, when persuasive evidence exists (usuallythe Company transfers control over promised goods to the customer. The transfer of control over goods to a customer generally takes place upon shipment or when accepted by the customer, as provided for in the formsales contract.
| 5. | Payment terms |
ICL has various payment terms which are aligned with the acceptable commercial conditions in the relevant markets. ICL's policy is to engage in agreements with payment terms not exceeding one year and applies the practical expedient to not separate a significant financing component where the difference between the time of receiving payment and the time of transferring the goods to the customer is one year or less.
| K. | Government grants |
Government grants are recognized initially at fair value when there is reasonable assurance that they will be received, and the Group will comply with the conditions associated with the grant. Unconditional government grants are recognized when the Group is entitled to receive them.
ICL Group LimitedConsolidated Financial Statements19
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 3 - Material Accounting Policies (cont'd)
| L. | Leases |
Determining whether an arrangement contains a lease
On the inception date of the lease, ICL determines whether the arrangement is a lease or contains a lease, while examining if it conveys the right to control the use of an executed sales agreement)identified asset for a period of time in exchange for consideration.
For lease contracts that contain non-lease components, such as services or maintenance, that are related to a lease component, ICL accounts for the contract as a single lease component without separating the components.
ICL has elected to apply the practical expedient by which short-term leases of up to one year and/or leases in which the underlying asset has a low value, are recognized in profit or loss on a straight-line basis, over the lease term, without recognizing an asset and/or liability in the statement of financial position.
The lease term is the non-cancellable period of the lease plus periods covered by an extension or termination option if it is reasonably certain that the significant risks and rewards of ownership have been transferred tolessee will or will not exercise the buyer, recoveryoption, respectively.
Variable lease payments that depend on an index or a rate, are initially measured using the index or rate existing at the commencement of the considerationlease and are included in the measurement of the lease liability. When the cash flows of future lease payments change as the result of a change in an index or a rate, the balance of the liability is probable,adjusted against the associated costs and possible returnright-of-use asset. Other variable lease payments that are not included in the measurement of goods can be estimated reliably, there is no continuing management involvement with the goods, andlease liability are recognized in profit or loss in the amount of revenue can be measured reliably. If it is probableperiod in which the event or condition that discounts will be granted and the amount can be measured reliably, then the discount is recognized as a reduction of revenue when the sales are recognized.triggers payment occurs.
| M. | Financing Income and Expenses |
Financing income includes income from interest on amounts invested, gains from derivative financial instruments recognized in the statement of income, foreign currency gains and gains on the disposal of available-for-sale financial assets.financing income recorded in relation to employee benefits. Interest income is recognized as accrued, using the effective interest method.
Financing expenses include interest on loans received, changes in the time value of provisions, securitization transaction costs, losses from impairment or disposal of available for sale financial assets, losses from derivative financial instruments, changes due to the passage of time in liabilities in respect of defined benefit plans for employees less interest income deriving from plan assets of a defined benefit plan for employees and losses from exchange rate differences. Borrowing costs, which are not capitalized, are recorded in the income statement using the effective interest method.
Gains and losses from exchange rate differences and from derivative financial instruments are reported on a net basis, as financing income or financing expenses, based on the fluctuation in the exchange rates and based on their position (net gain or loss).basis.
In the consolidated statements of cash flows, interest received and interest paid, are presented as part of cash flows from operating activities.
Dividends paid are presented as part of cash flows from financing activities.activity.
ICL Group LimitedConsolidated Financial Statements20
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 3 - Material Accounting Policies (cont'd)
| N. | Taxes on Income |
Taxes on income include(including surplus profit levy on natural resources) contain current and deferred taxes. Current tax and deferred taxtaxes, that are recognized in profit or loss, except to the extent thatunless they relate to a business combination or are recognized directly in equity or in other comprehensive income to the extentwhen they relate to items recognized directly in equity or in other comprehensive income.
A provision for uncertain tax positions, including additional tax and interest expenses, is recognized when it is more likely than not that the GroupICL will have to use its economic resources to pay the obligation.
| O. | Amendments to standards and interpretations that have not yet been adopted |
Amendments to IAS 7 and IFRS 7, Supplier Finance Arrangements (hereinafter - the said additional tax it is expected to incur due to distribution of the dividend. Additional income taxes that arise from the distribution of dividends by the Company are recognized in profit or loss at the same time that the liability to pay the related dividend is recognized. Deferred taxes in respect of intra-company transactions in the consolidated financial statements are recorded according to the tax rate applicable to the buying company.
The Group presents basic and diluted earnings per share data for its ordinary share capital. The basic earnings per share are calculated by dividing the income or loss attributableamendments introduce new disclosure requirements relating to the holders of the Company’s ordinary shares by the weighted-average number of ordinary shares outstanding during the year, after adjustment in respect of treasury shares. The diluted earnings per share are determined by adjusting the income or loss attributable to the holders of the Company’s ordinary shares and the weighted-average number of ordinary shares outstanding after adjustment in respect of treasury shares and for the effect of restricted shares and options for shares granted to employees.
The Standard replaces the current guidance in IAS 39, Financial Instruments: Recognition and Measurement. IFRS 9 (2014) includes revised guidance regarding the classification and measurement of financial instruments, a new ‘expected credit loss’ model for calculating impairment for most financial assets, and new guidance and requirements with respect to hedge accounting.
2024. The Company is examining the effectsimpact of IFRIC 23the amendments on the financial statements with no plans for early adoption.
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 4 - Determination of Fair Values
As part of the accounting policies and disclosures, the GroupICL is required to determine the fair value of both financial and non-financial assets and liabilities. The fair values have been determined for measurement and/or disclosure purposes based on the methods described below. Further information about the assumptions made in determining the fair values is disclosed in the notes specific to that asset or liability.
| A. | Investments in equity securities |
The fair value of financial assetsinvestments in equity instruments classified as available-for-salefair value through other comprehensive income - investments in equity instruments and as held-for-tradingfair value through profit and loss, is determined based on their market price at date of the report. If the asset or liability measured at fair value has a bid price and an ask price, the price in the range between them that best reflects fair value under the circumstances will be used for measuring fair value.
| B. | Derivatives |
The fair value of forward contracts on foreign currency is determined by averaging the exchange rate and the appropriate interest coefficient for the period of the transaction and the relevant currency index.
Future contracts on energy and marine shipping prices are presented at fair value based on the basis of quotes of the prices of products on an ongoing basis.
The reasonableness of the market pricefair value is examined by comparing it to quotations by banks.banks’ quotations.
| C. | Liabilities in respect of debentures |
The fair value of the liabilities and theincluding debentures is determined for disclosure purposes only. The fair value of marketable debentures is determined based on the stock market prices as at the date of the report. The fair value of the non‑marketable debenturesonly and is calculated based on the present value of future cash flows in respect of the principal and interest components, discounted at the market rate of interest as atof the reporting date. The fair value of marketable debentures is determined based on the stock market prices as of the date of the report.
Notes to the Consolidated Financial Statements as atof December 31, 2017
2023
Note 5 - Operating Segments
| A. | General |
1. Information on operating segments:segments
ICL is a leading global specialty minerals company that operatesoperating bromine, potash and phosphate mineral value chains in a unique, integrated business model. Our operations are organized under four segments: Industrial Products, Potash, Phosphate Solutions and Growing Solutions.
Industrial Products – The Company operates via two segments: the Essential MineralsIndustrial Products segment and the Specialty Solutions segment. Following management decision regarding the Company’s structure, as of January 2017, ICL Specialty Fertilizers business lineproduces bromine derived from a solution that is a partby‑product of the Essential Mineral segment.potash production process in Sodom, Israel, as well as bromine‑based compounds. Industrial Products uses most of the bromine it produces for its own production of bromine compounds at its production sites in Israel, the Netherlands and China. In addition, the Industrial Products segment produces several grades of salt, magnesium chloride and some other specialty mineral products. Industrial Products is also engaged in the production and marketing of phosphorous-based flame retardants and additional phosphorus‑based products.
Phosphate Solutions – The Phosphate Solutions segment is based on a phosphate value chain which uses phosphate commodity products, such as phosphate rock and fertilizer-grade phosphoric acid (“green phosphoric acid”), to produce specialty products with higher added value. The segment also produces dry carnallite and related by-products, including chlorinemarkets phosphate-based fertilizers. Phosphate rock is mined and sylvinite.
ICL Group LimitedConsolidated Financial Statements23
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 5 - Operating Segments (cont’d)
| A. | General (cont’d) |
1. Information on operating segments (cont'd)
Growing Solutions – The Growing Solutions segment aims to achieve global leadership in plant nutrition markets by enhancing its positions in its core markets of specialty agriculture, ornamental horticulture, turf and provides blended, integratedlandscaping, targeting high-growth markets such as Brazil, India and China, by leveraging its unique R&D capabilities, substantial agronomic experience, global footprint, backward integration to potash, phosphate and polysulphate and chemistry know-how, while integrating and generating synergies from acquired businesses.
ICL is continuously working to expand its broad portfolio of specialty plant nutrition, plant stimulation and plant health solutions, based on dairy proteinswhich consists of enhanced efficiency and phosphate additives. controlled release fertilizers (CRF), organic fertilizers, water soluble fertilizers (WSF), liquid fertilizers and straights (MKP/MAP/PeKacid), soil and foliar micronutrients, secondary nutrients, biostimulants, soil conditioners, seed treatment products, and adjuvants.
The business line operates primary production locationsGrowing Solutions segment develops, manufactures, markets and sells its products globally, mainly in Germany,South America, Europe, Asia, North America and Israel. It produces water soluble specialty fertilizers in Belgium, Israel and Spain, organic, ornamental horticulture, turf and landscaping products in the UK and the Netherlands, liquid fertilizers in Israel, Spain and China, straights soluble fertilizers in China and Israel, controlled‑release fertilizers in the Netherlands, Brazil and the United States, Brazil, China,as well as secondary nutrients, biostimulants, soil conditioners, seed treatment products, and Austria, which mainly process phosphates, milk,adjuvants in Brazil.
Other Activities – Other business activities include, among other things, ICL’s innovative arm, promoting innovation, developing new products and spices,services, as well as digital platforms and also operates blending facilities in Germany,technological solutions for farmers and agronomists. This category includes Growers and Agmatix, innovative start-ups that are developing agricultural data processing and analysis capabilities for the UK, the United States, Brazil, Argentina and Australia, enabling the productionfuture of "customer specific" solutions thatagriculture. These activities are not presented as reportable segments as they do not meet the requirements of the local market.required quantitative thresholds.
2. Segment capital investments
3. Inter–segment transfers and unallocated income (expenses)
Segment revenues,revenue, expenses and results include inter-segment transfers, which are priced mainly based on transactiontransactions prices in the ordinary course of business – this being based onbusiness. This is aligned with reports that are regularly reviewed by the chief operating decision maker. TheseChief Operating Decision Maker. Inter-segment transfers are eliminated as part of consolidation of the financial statements. statements' consolidation process.
The segment incomeSegment profit is measured based on the operating income, without the allocation of certain expenses that are not allocated to the operating segments, including general and administrative expenses, as it is includedpresented in the reports that are regularly reviewed by the chief operating decision maker.Chief Operating Decision Maker. This is the basis for analyzing segment results, since management believes that it is the most relevant measure for the assessment of such results.
ICL Group LimitedConsolidated Financial Statements24
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 5 - Operating Segments (cont’d)
B. | Operating segment data |
Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | |
$ millions | |||||||
For the year ended December 31, 2023 | |||||||
Sales to external parties | 1,206 | 1,973 | 2,274 | 2,047 | 36 | - | 7,536 |
Inter-segment sales | 21 | 209 | 209 | 26 | 3 | (468) | - |
Total sales | 1,227 | 2,182 | 2,483 | 2,073 | 39 | (468) | 7,536 |
Segment operating income (loss) | 220 | 668 | 329 | 51 | (13) | (37) | 1,218 |
Other expenses not allocated to the segments | (77) | ||||||
Operating income | 1,141 | ||||||
Financing expenses, net | (168) | ||||||
Share in earnings of equity-accounted investees | 1 | ||||||
Income before income taxes | 974 | ||||||
Depreciation and amortization | 57 | 175 | 221 | 68 | 3 | 12 | 536 |
Capital expenditures | 91 | 384 | 272 | 92 | 11 | 23 | 873 |
ICL Group LimitedConsolidated Financial Statements25
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 5 - Operating Segments (cont’d)
B. | Operating segment data (cont'd) |
Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other | Reconciliations | Consolidated | |
$ millions | |||||||
For the year ended December 31, 2022 | |||||||
Sales to external parties | 1,737 | 3,031 | 2,851 | 2,376 | 20 | - | 10,015 |
Inter-segment sales | 29 | 282 | 255 | 46 | 3 | (615) | - |
Total sales | 1,766 | 3,313 | 3,106 | 2,422 | 23 | (615) | 10,015 |
Segment operating income (loss) | 628 | 1,822 | 777 | 378 | (9) | (87) | 3,509 |
Other income not allocated to the segments | 7 | ||||||
Operating income | 3,516 | ||||||
Financing expenses, net | (113) | ||||||
Share in earnings of equity-accounted investees | 1 | ||||||
Income before income taxes | 3,404 | ||||||
Depreciation and amortization | 61 | 166 | 189 | 70 | 3 | 9 | 498 |
Capital expenditures | 90 | 346 | 259 | 101 | 9 | 17 | 822 |
| For the year ended December 31, 2017 | |||||
| Sales to external parties | 2,588 | 2,789 | 41 | - | 5,418 |
| Inter-segment sales | 62 | 219 | 2 | (283) | - |
| Total sales | 2,650 | 3,008 | 43 | (283) | 5,418 |
| Operating income attributable to the segments | 554 | 359 | 1 | 914 | |
| General and administrative expenses | (261) | ||||
| Other expenses not allocated to segments and intercompany eliminations | (24) | ||||
| Operating income | 629 | ||||
| Financing expenses, net | (124) | ||||
| Income before taxes on income | 505 | ||||
| Capital expenditures | 80 | 423 | 1 | 504 | |
| Capital expenditures not allocated | 3 | ||||
| Total capital expenditures | 507 | ||||
| Depreciation, amortization and impairment | 111 | 274 | 3 | 388 | |
| Depreciation ,amortization and impairment not allocated | 30 | ||||
| Total depreciation, amortization and impairment | 418 |
ICL Group LimitedConsolidated Financial Statements26
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 5 - Operating Segments (cont'd)
B. | Operating segment data (cont'd) |
| For the year ended December 31, 2016 | |||||
| Sales to external parties | 2,493 | 2,811 | 59 | - | 5,363 |
| Inter-segment sales | 60 | 225 | - | (285) | - |
| Total sales | 2,553 | 3,036 | 59 | (285) | 5,363 |
| Operating income attributable to the segments | 534 | 398 | 5 | 937 | |
| General and administrative expenses | (321) | ||||
| Other expenses not allocated to segments and intercompany eliminations | (619) | ||||
| Operating loss | (3) | ||||
| Financing expenses, net | (132) | ||||
| Share in earnings of equity-accounted investee | 18 | ||||
| Loss before taxes on income | (117) | ||||
| Capital expenditures | 95 | 497 | 1 | 593 | |
| Capital expenditures not allocated | 59 | ||||
| Total capital expenditures | 652 | ||||
| Depreciation ,amortization and impairment | 106 | 292 | 3 | 401 | |
| Depreciation, amortization and impairment not allocated | 5 | ||||
| Total depreciation, amortization and impairment | 406 |
Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | |
$ millions | |||||||
For the year ended December 31, 2021 | |||||||
Sales to external parties | 1,601 | 1,598 | 2,087 | 1,644 | 25 | - | 6,955 |
Inter-segment sales | 16 | 178 | 167 | 26 | 3 | (390) | - |
Total sales | 1,617 | 1,776 | 2,254 | 1,670 | 28 | (390) | 6,955 |
Segment operating income (loss) | 435 | 399 | 294 | 135 | (8) | (61) | 1,194 |
Other income not allocated to the segments | 16 | ||||||
Operating income | 1,210 | ||||||
Financing expenses, net | (122) | ||||||
Share in earnings of equity-accounted investees | 4 | ||||||
Income before income taxes | 1,092 | ||||||
Depreciation and amortization | 65 | 148 | 207 | 62 | 2 | - | 484 |
Capital expenditures | 74 | 270 | 228 | 74 | 6 | 17 | 669 |
Capital expenditures as part of business combination | - | - | - | 377 | - | - | 377 |
ICL Group LimitedConsolidated Financial Statements27
Notes to the Consolidated Financial Statements as atof December 31, 2017
| For the year ended December 31, 2015 | |||||
| Sales to external parties | 2,319 | 2,904 | 182 | - | 5,405 |
| Inter-segment sales | 75 | 211 | 3 | (289) | - |
| Total sales | 2,394 | 3,115 | 185 | (289) | 5,405 |
| Operating income attributable to the segments | 451 | 885 | 16 | 1,352 | |
| General and administrative expenses | (350) | ||||
| Other expenses not allocated to segments and intercompany eliminations | (237) | ||||
| Operating income | 765 | ||||
| Financing expenses, net | (108) | ||||
| Share in earnings of equity-accounted investee | 11 | ||||
| Income before taxes on income | 668 | ||||
| Capital expenditures | 98 | 470 | 2 | 570 | |
| Capital expenditures as a result of business combination | 145 | 445 | - | 590 | |
| Capital expenditures not allocated | 110 | ||||
| Total capital expenditures | 1,270 | ||||
| Depreciation, amortization and impairment | 145 | 247 | 37 | 429 | |
| Depreciation, amortization and impairment not allocated | 1 | ||||
| Total depreciation, amortization and impairment | 430 |
Note 5 - Operating Segments (cont'd)
| C. | Information based on geographical location |
2023 | 2022 | 2021 | ||||
$ millions | % of sales | $ millions | % of sales | $ millions | % of sales | |
| 2017 | 2016 | 2015 | ||||
$ millions | % of sales | $ millions | % of sales | $ millions | % of sales | |
Brazil | 1,530 | 20 | 2,200 | 22 | 1,178 | 17 |
USA | 1,262 | 17 | 1,457 | 15 | 1,091 | 16 |
China | 1,059 | 14 | 1,495 | 15 | 1,060 | 15 |
United Kingdom | 428 | 6 | 448 | 4 | 386 | 6 |
Spain | 348 | 5 | 365 | 4 | 280 | 4 |
Germany | 340 | 5 | 417 | 4 | 345 | 5 |
Israel | 274 | 4 | 344 | 3 | 291 | 4 |
France | 254 | 3 | 305 | 3 | 270 | 4 |
India | 196 | 3 | 505 | 5 | 213 | 3 |
Netherlands | 171 | 2 | 264 | 3 | 127 | 2 |
All other | 1,674 | 21 | 2,215 | 22 | 1,714 | 24 |
Total | 7,536 | 100 | 10,015 | 100 | 6,955 | 100 |
| USA | 1,091 | 20 | 1,070 | 20 | 1,176 | 22 |
| China | 724 | 13 | 669 | 12 | 550 | 10 |
| Brazil | 594 | 11 | 521 | 10 | 506 | 9 |
| Germany | 378 | 7 | 392 | 7 | 421 | 8 |
| United Kingdom | 328 | 6 | 306 | 6 | 303 | 6 |
| France | 265 | 5 | 226 | 4 | 295 | 6 |
| Spain | 264 | 5 | 258 | 5 | 285 | 5 |
| India | 200 | 4 | 199 | 4 | 206 | 4 |
| Israel | 171 | 3 | 237 | 4 | 240 | 4 |
| Italy | 121 | 2 | 122 | 2 | 117 | 2 |
| All other | 1,282 | 24 | 1,363 | 26 | 1,306 | 24 |
| Total | 5,418 | 100 | 5,363 | 100 | 5,405 | 100 |
ICL Group LimitedConsolidated Financial Statements28
| For the year ended December 31 | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
| Israel | 2,548 | 2,470 | 2,427 |
| Europe | 2,119 | 2,124 | 2,296 |
| North America | 1,045 | 1,045 | 1,148 |
| Others | 798 | 774 | 503 |
| 6,510 | 6,413 | 6,374 | |
| Intercompany sales | (1,092) | (1,050) | (969) |
| Total | 5,418 | 5,363 | 5,405 |
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 5 - Operating Segments (cont'd)
| C. | Information based on geographical location (cont'd) | |
The following table presents the distribution of the operating segments sales by geographical location of the customer:
Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | |
$ millions | |||||||
For the year ended December 31, 2023 | |||||||
Europe | 432 | 624 | 719 | 746 | 20 | (209) | 2,332 |
Asia | 361 | 539 | 603 | 257 | 14 | (30) | 1,744 |
South America | 25 | 524 | 368 | 753 | - | (5) | 1,665 |
North America | 349 | 260 | 614 | 138 | 2 | (12) | 1,351 |
Rest of the world | 60 | 235 | 179 | 179 | 3 | (212) | 444 |
Total | 1,227 | 2,182 | 2,483 | 2,073 | 39 | (468) | 7,536 |
Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | |
$ millions | |||||||
For the year ended December 31, 2022 | |||||||
Europe | 574 | 698 | 881 | 880 | 18 | (242) | 2,809 |
Asia | 664 | 1,008 | 817 | 286 | - | (32) | 2,743 |
South America | 40 | 938 | 496 | 849 | - | (8) | 2,315 |
North America | 401 | 365 | 654 | 166 | 1 | (10) | 1,577 |
Rest of the world | 87 | 304 | 258 | 241 | 4 | (323) | 571 |
Total | 1,766 | 3,313 | 3,106 | 2,422 | 23 | (615) | 10,015 |
ICL Group LimitedConsolidated Financial Statements29
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 5 - Operating Segments (cont'd)
| C. | Information based on geographical location (cont'd) |
The following table presents the groupdistribution of the operating segments sales by geographical location of the customer: (cont'd)
Industrial Products | Potash | Phosphate Solutions | Growing Solutions | Other Activities | Reconciliations | Consolidated | |
$ millions | |||||||
For the year ended December 31, 2021 | |||||||
Europe | 530 | 430 | 611 | 727 | 23 | (162) | 2,159 |
Asia | 597 | 478 | 617 | 206 | 1 | (23) | 1,876 |
South America | 64 | 467 | 343 | 436 | - | (5) | 1,305 |
North America | 363 | 209 | 491 | 127 | 1 | (5) | 1,186 |
Rest of the world | 63 | 192 | 192 | 174 | 3 | (195) | 429 |
Total | 1,617 | 1,776 | 2,254 | 1,670 | 28 | (390) | 6,955 |
ICL Group LimitedConsolidated Financial Statements30
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 5 - Operating Segments (cont'd)
| C. | Information based on geographical location (cont'd) | |
The following table presents the distribution of the Company’s sales by geographical location of the main facilities from which they were produced.
For the year ended December 31 | |||
2023 | 2022 | 2021 | |
$ millions | $ millions | $ millions | |
Israel | 3,595 | 5,611 | 3,526 |
Europe | 2,610 | 3,361 | 2,437 |
South America | 1,482 | 1,994 | 1,095 |
North America | 999 | 1,038 | 897 |
Asia | 788 | 1,123 | 861 |
Other | 52 | 61 | 56 |
9,526 | 13,188 | 8,872 | |
Intercompany sales | (1,990) | (3,173) | (1,917) |
Total | 7,536 | 10,015 | 6,955 |
The following table presents operating income (loss) by geographical location of the assets from which it was produced:
For the year ended December 31 | |||
2023 | 2022 | 2021 | |
$ millions | $ millions | $ millions | |
| For the year ended December 31 | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
| Israel | 475 | 304 | 386 |
| North America | 154 | 83 | 89 |
| South America | 20 | (2) | 21 |
| Europe | (45) | (117) | 254 |
| Others | 21 | (242) | 23 |
| Intercompany eliminations | 4 | (29) | (8) |
| Total | 629 | (3) | 765 |
Israel | 857 | 2,668 | 863 |
Asia | 130 | 221 | 179 |
South America | 112 | 184 | 95 |
Europe | 74 | 445 | 7 |
North America | 45 | 131 | 71 |
Other | 4 | 5 | 4 |
Intercompany eliminations | (81) | (138) | (9) |
Total | 1,141 | 3,516 | 1,210 |
ICL Group LimitedConsolidated Financial Statements31
Notes to the Consolidated Financial Statements as of December 31, 2023
| C. | Information based on geographical location (cont'd) |
The following table present the non-current assets by geographical location of the assets (*)
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
| For the year ended December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Israel | 3,387 | 3,351 | 4,454 | 4,208 |
| Europe | 1,227 | 1,127 | 1,581 | 1,474 |
South America | 456 | 407 | ||
| Asia | 455 | 472 | 441 | 461 |
| North America | 321 | 382 | 369 | 346 |
| Other | 94 | 158 | 5 | 4 |
| Total | 5,484 | 5,490 | 7,306 | 6,900 |
(*) Consist mainlyMainly consist of property, plant and equipment, and intangible assets and non-current inventories, lease rights and investments in equity-accounted investees.inventories.
Note 6 – Inventories
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
Finished products | 1,117 | 1,348 |
Raw materials | 329 | 490 |
Work in progress | 174 | 233 |
Spare parts | 157 | 128 |
Total inventories | 1,777 | 2,199 |
Of which: | ||
Non-current inventories - mainly raw materials (presented as non-current assets) | 74 | 65 |
Current inventories | 1,703 | 2,134 |
Note 7 - 45Prepaid expenses and other receivables
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
Government institutions | 104 | 111 |
Current tax assets | 67 | 53 |
Derivative instruments | 53 | 10 |
Prepaid expenses | 35 | 70 |
Receivables from equity-accounted investees sale | 17 | - |
Other | 87 | 79 |
363 | 323 |
ICL Group LimitedConsolidated Financial Statements32
Notes to the Consolidated Financial Statements as atof December 31, 2017
| 2017 | 2016 | 2015 | ||||
$ millions | % of sales | $ millions | % of sales | $ millions | % of sales | |
| Specialty Solutions Segment | ||||||
| Industrial Products | 1,193 | 22 | 1,120 | 21 | 1,034 | 19 |
| Advanced Additives | 877 | 16 | 798 | 15 | 781 | 14 |
| Food Specialties | 596 | 11 | 659 | 12 | 613 | 11 |
| 2,666 | 49 | 2,577 | 48 | 2,428 | 44 | |
| Essential Minerals Segment | ||||||
| Potash & Magnesium | 1,383 | 26 | 1,338 | 25 | 1,515 | 28 |
| Phosphate | 1,052 | 19 | 1,163 | 22 | 1,064 | 20 |
| Specialty Fertilizers | 692 | 13 | 661 | 12 | 680 | 13 |
| 3,127 | 58 | 3,162 | 59 | 3,259 | 61 | |
| Other activities and intercompany sales | (375) | (7) | (376) | (7) | (282) | (5) |
| Total | 5,418 | 100 | 5,363 | 100 | 5,405 | 100 |
| For the year ended December 31 | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
| Specialty Solutions Segment | |||
| Industrial Products | 303 | 286 | 225 |
| Advanced Additives | 201 | 163 | 154 |
| Food Specialties | 51 | 84 | 72 |
| 555 | 533 | 451 | |
| Essential Minerals Segment | |||
| Potash & Magnesium | 282 | 282 | 637 |
| Phosphate | 23 | 60 | 187 |
| Specialty Fertilizers | 56 | 55 | 63 |
| 361 | 397 | 887 | |
| Other activities and intercompany eliminations | (2) | 7 | 14 |
| Consolidated (business lines) | 914 | 937 | 1,352 |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Deposits in banks and financial institutions | 90 | 18 |
| Other | - | 11 |
| 90 | 29 |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Finished products | 709 | 773 |
| Work in progress | 269 | 267 |
| Raw materials | 212 | 194 |
| Spare parts | 142 | 129 |
| 1,332 | 1,363 | |
| Less – non-current inventories (presented in non-current assets) | 106 | 96 |
| 1,226 | 1,267 |
Note 8 - Other Receivables
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Government institutions | 78 | 39 |
| Prepaid expenses | 33 | 25 |
| Insurance receivables | 26 | 6 |
| Current tax assets | 16 | 66 |
| Advances to suppliers | 10 | 15 |
| Other | 62 | 71 |
| 225 | 222 |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Current assets | 54 | 260 |
| Non-Current assets | 39 | 568 |
| Total assets | 93 | 828 |
| Current liabilities | 25 | 131 |
| Non-current liabilities | 26 | 406 |
| Total liabilities | 51 | 537 |
| Revenues | 207 | 315 |
| Expenses | 197 | 279 |
| Net income | 10 | 36 |
| Non-controlling interests in subsidiaries |
The following table presentstables present information with respect to non-controlling interests in a Group subsidiary, YPH JV, in(at the rate of 50%. The non-controlling interests are material to the Group (before), before elimination of inter-company transactions).transactions. The information includes fair value adjustments that were made on the acquisition date, other than goodwill and presented without adjustments for the ownership rates held by the Group.Company.
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
| 2017 | 2016 | |
| $ millions | $ millions |
Current assets | 278 | 267 |
Non-current assets | 376 | 392 |
Current liabilities | (102) | (145) |
Non-current liabilities | (43) | (48) |
Equity | (509) | (466) |
| Current assets | 197 | 227 |
| Intangibles assets | 69 | 64 |
| Other non current assets | 302 | 314 |
| Current liabilities | 241 | 268 |
| Long term liabilities | 215 | 197 |
| Equity | 112 | 140 |
| Sales | 363 | 377 |
| Operating Loss | (21) | (78) |
| Depreciation and amortization | 34 | 34 |
| Operating income (loss) before depreciation and amortization | 13 | (44) |
| Net loss | (38) | (104) |
| Comprehensive loss | (52) | (126) |
For the year ended December 31 | |||
2023 | 2022 | 2021 | |
$ millions | $ millions | $ millions | |
Sales | 546 | 723 | 528 |
Operating Income | 105 | 146 | 105 |
Depreciation and amortization | 33 | 34 | 38 |
Operating income before depreciation and amortization | 138 | 180 | 143 |
Net Income | 85 | 116 | 96 |
Total Comprehensive income | 71 | 78 | 104 |
B. Business Acquisition and Divestiture
| (2) | Further to the acquisition of Nobian’s holding in Sal Vesta (51%) in 2021, which was part of the partnership termination agreement between the Company and Nobian, in the first quarter of 2023 100% of the Company’s shares in Sal Vesta were sold to Salins Group for a consideration of $13 million. As part of the transaction, the Company engaged in a long-term take-or-pay supply agreement for all the vacuum salt produced at ICL Iberia. |
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 109 – Other non-current assets
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
| Lease rights | 106 | 107 |
| Non-current inventories | 106 | 96 |
| Surplus in defined benefit plan | 89 | 78 |
| Derivatives | 64 | 3 |
| Other | 8 | 8 |
| 373 | 292 |
Surplus in employees' defined benefit plans (1) | 112 | 97 |
Non-current inventories | 74 | 65 |
Long term deposits | 11 | 9 |
Receivables from equity-accounted investees sale | 9 | 22 |
Investments in equity-accounted investees | 2 | 3 |
Derivative designated as a cash flow hedge | 1 | 19 |
Other | 30 | 16 |
239 | 231 |
| (1) | See Note 16. |
Notes to the Consolidated Financial Statements as atof December 31, 2017
2023
Note 1210 - Property, Plant and Equipment
| A. | Composition |
Land | Technical equipment and | Dikes and evaporating ponds | Plants under construction | Other | Right of use asset (2) | Total | |||||||
$ millions | |||||||||||||
| Cost | |||||||
| Balance as at January 1, 2017 | 763 | 5,408 | 1,715 | 149 | 244 | 879 | 9,158 |
| Additions | 42 | 302 | 140 | 7 | 13 | (14) | 490 |
| Disposals | (6) | (28) | - | (12) | (17) | - | (63) |
| Translation differences | 49 | 136 | 33 | 7 | 9 | 35 | 269 |
| Reclassification to assets held for sale | (4) | (30) | - | (1) | (7) | (2) | (44) |
| Balance as at December 31, 2017 | 844 | 5,788 | 1,888 | 150 | 242 | 898 | 9,810 |
| Accumulated depreciation | |||||||
| Balance as at January 1, 2017 | 409 | 3,232 | 944 | 83 | 181 | - | 4,849 |
| Depreciation for the year | 23 | 227 | 84 | 7 | 14 | - | 355 |
| Disposals | (4) | (23) | - | (12) | (17) | - | (56) |
| Impairment | - | 13 | - | - | - | - | 13 |
| Translation differences | 24 | 85 | 25 | 7 | 6 | - | 147 |
| Reclassification to assets held for sale | (1) | (14) | - | (1) | (3) | - | (19) |
| Balance as at December 31, 2017 | 451 | 3,520 | 1,053 | 84 | 181 | - | 5,289 |
| Depreciated balance as at December 31, 2017 | 393 | 2,268 | 835 | 66 | 61 | 898 | 4,521 |
Cost | |||||||
Balance as of January 1, 2023 | 1,086 | 7,865 | 1,834 | 518 | 1,144 | 533 | 12,980 |
Additions | 35 | 455 | 179 | (3) | 78 | 94 | 838 |
Disposals | (4) | (98) | - | (2) | (4) | (51) | (159) |
Translation differences | 23 | 58 | 12 | 10 | 1 | 3 | 107 |
Balance as of December 31, 2023 | 1,140 | 8,280 | 2,025 | 523 | 1,219 | 579 | 13,766 |
Accumulated depreciation | |||||||
Balance as of January 1, 2023 | 512 | 4,545 | 829 | - | 936 | 189 | 7,011 |
Depreciation | 27 | 254 | 46 | - | 84 | 83 | 494 |
Disposals | (1) | (68) | - | - | (3) | (49) | (121) |
Translation differences | 6 | 34 | 10 | - | 1 | 2 | 53 |
Balance as of December 31, 2023 | 544 | 4,765 | 885 | - | 1,018 | 225 | 7,437 |
Depreciated balance as of December 31, 2023 | 596 | 3,515 | 1,140 | 523 | 201 | 354 | 6,329 |
(1) The additions for the year are presented net of items thefor which construction of which werehas been completed and accordingly were recorded in other categories in the “property, plant and equipment” section.
| Cost | |||||||
| Balance as at January 1, 2016 | 760 | 5,038 | 1,634 | 157 | 235 | 976 | 8,800 |
| Additions | 24 | 488 | 89 | 2 | 19 | (83) | 539 |
| Disposals | (4) | (49) | - | (10) | (10) | - | (73) |
| Translation differences | (17) | (72) | (8) | - | (2) | (14) | (113) |
| Reclassification from assets held for sale | - | 3 | - | - | 2 | - | 5 |
| Balance as at December 31, 2016 | 763 | 5,408 | 1,715 | 149 | 244 | 879 | 9,158 |
| Accumulated depreciation | |||||||
| Balance as at January 1, 2016 | 396 | 3,085 | 848 | 84 | 175 | - | 4,588 |
| Depreciation for the year | 22 | 218 | 102 | 8 | 15 | - | 365 |
| Disposals | (2) | (41) | - | (9) | (8) | - | (60) |
| Impairment | - | 5 | - | - | - | - | 5 |
| Translation differences | (7) | (35) | (6) | - | (1) | - | (49) |
| Balance as at December 31, 2016 | 409 | 3,232 | 944 | 83 | 181 | - | 4,849 |
| Depreciated balance as at December 31, 2016 | 354 | 2,176 | 771 | 66 | 63 | 879 | 4,309 |
(2) The total additions were recorded against lease liabilities (IFRS 16).
ICL Group LimitedConsolidated Financial Statements35
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1310 - Intangible AssetsProperty, Plant and Equipment (cont’d)
| A. | Composition (cont'd) |
Land and | Dikes and evaporating ponds (3) | Plants under construction (1) | Other | Right of use asset (2) | Total | |||||||
$ millions | ||||||||||||
Cost | |||||||
Balance as of January 1, 2022 | 1,107 | 7,664 | 1,465 | 664 | 1,073 | 518 | 12,491 |
Additions | 30 | 358 | 388 | (128) | 77 | 64 | 789 |
Disposals | (15) | (27) | - | - | - | (27) | (69) |
Translation differences | (36) | (130) | (19) | (18) | (6) | (22) | (231) |
Balance as of December 31, 2022 | 1,086 | 7,865 | 1,834 | 518 | 1,144 | 533 | 12,980 |
Accumulated depreciation | |||||||
Balance as of January 1, 2022 | 502 | 4,410 | 797 | - | 881 | 147 | 6,737 |
Depreciation | 35 | 243 | 47 | - | 59 | 74 | 458 |
Disposals | (7) | (25) | - | - | - | (27) | (59) |
Translation differences | (18) | (83) | (15) | - | (4) | (5) | (125) |
Balance as of December 31, 2022 | 512 | 4,545 | 829 | - | 936 | 189 | 7,011 |
Depreciated balance as of December 31, 2022 | 574 | 3,320 | 1,005 | 518 | 208 | 344 | 5,969 |
The total additions were recorded against lease liabilities (IFRS 16). | ||
(3) | The Company conducted an evaluation of the expected remaining useful life of Property, Plant and Equipment at its facilities in Israel. This evaluation was based on the Company's accumulated experience, ongoing maintenance practices and operational history of these facilities. The findings of this assessment, which was concluded in the third quarter, revealed that, due to the increasing adoption of new technologies and the implementation of operational excellence processes, the expected lifespan of certain Property, Plant, and Equipment exceeded their previously estimated useful life. As a result, the estimated useful life of the said assets was extended by 2‑5 years, effective from January 2023. The impact of this adjustment in 2023, is a reduction in depreciation expenses, of which $16 million was reflected in operating results, and $3 million was recorded as part of changes in inventory value. |
| Cost | |||||||||
| Balance as at January 1, 2017 | 398 | 205 | 86 | 80 | 214 | 35 | 65 | 76 | 1,159 |
| Additions | - | - | - | 3 | - | 1 | 10 | 3 | 17 |
| Discontinuance of consolidation | (55) | - | - | - | - | - | - | - | (55) |
| Translation differences | 16 | 11 | 7 | 7 | 16 | 3 | 2 | 1 | 63 |
| Reclassification to assets held for sale | (11) | - | (2) | (10) | (47) | - | (1) | (46) | (117) |
| Balance as at December 31, 2017 | 348 | 216 | 91 | 80 | 183 | 39 | 76 | 34 | 1,067 |
| Amortization and impairment losses | |||||||||
| Balance as at January 1, 2017 | 21 | 57 | 19 | 34 | 88 | 9 | 57 | 50 | 335 |
| Amortization for the year | - | 6 | 3 | 5 | 12 | 1 | 3 | 5 | 35 |
| Translation differences | 1 | - | 1 | 3 | 5 | 1 | 2 | 1 | 14 |
| Impairment | - | - | 1 | - | - | 14 | - | - | 15 |
| Reclassification to assets held for sale | - | - | - | (7) | (11) | - | (1) | (35) | (54) |
| Balance as at December 31, 2017 | 22 | 63 | 24 | 35 | 94 | 25 | 61 | 21 | 345 |
| Amortized Balance as at December 31 ,2017 | 326 | 153 | 67 | 45 | 89 | 14 | 15 | 13 | 722 |
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1311 - Intangible Assets (cont'd)
| Composition |
Goodwill | Concessions and mining rights | Trademarks | Technology / patents | Customer relationships | Computer application | Others | Total | |||||||||
$ millions | ||||||||||||||||
Cost | ||||||||
Balance as of January 1, 2023 | 526 | 210 | 84 | 108 | 194 | 142 | 69 | 1,333 |
Additions | - | 1 | - | 8 | - | 24 | 2 | 35 |
Disposals | - | - | - | - | - | (1) | - | (1) |
Translation differences | 23 | - | 2 | 3 | 6 | 1 | 2 | 37 |
Balance as of December 31, 2023 | 549 | 211 | 86 | 119 | 200 | 166 | 73 | 1,404 |
Amortization | ||||||||
Balance as of January 1, 2023 | 19 | 85 | 34 | 60 | 144 | 82 | 57 | 481 |
Amortization for the year | - | 6 | 2 | 5 | 12 | 12 | 5 | 42 |
Translation differences | - | - | 1 | 1 | 4 | 1 | 1 | 8 |
Balance as of December 31, 2023 | 19 | 91 | 37 | 66 | 160 | 95 | 63 | 531 |
- | ||||||||
Amortized Balance as of December 31 ,2023 | 530 | 120 | 49 | 53 | 40 | 71 | 10 | 873 |
| Cost | |||||||||
| Balance as at January 1, 2016 | 370 | 262 | 86 | 82 | 212 | 143 | 255 | 78 | 1,488 |
| Additions | - | 1 | 1 | 1 | 6 | 19 | 59 | - | 87 |
| Additions in respect of business combinations | 26 | - | - | - | - | - | - | - | 26 |
| Disposals | - | (52) | - | - | - | (126) | (249) | - | (427) |
| Translation differences | 2 | (6) | (1) | (3) | (5) | (1) | (3) | (2) | (19) |
| Reclassification from assets held for sale | - | - | - | - | 1 | - | 3 | - | 4 |
| Balance as at December 31, 2016 | 398 | 205 | 86 | 80 | 214 | 35 | 65 | 76 | 1,159 |
| Amortization and impairment losses | |||||||||
| Balance as at January 1, 2016 | 21 | 52 | 16 | 30 | 77 | 7 | 55 | 45 | 303 |
| Amortization for the year | - | 5 | 3 | 5 | 13 | 2 | 3 | 5 | 36 |
| Disposals | - | - | - | - | - | - | (2) | - | (2) |
| Translation differences | - | - | - | (1) | (2) | - | (1) | - | (4) |
| Reclassification from assets held for sale | - | - | - | - | - | - | 2 | - | 2 |
| Balance as at December 31, 2016 | 21 | 57 | 19 | 34 | 88 | 9 | 57 | 50 | 335 |
| Amortized Balance as at December 31 ,2016 | 377 | 148 | 67 | 46 | 126 | 26 | 8 | 26 | 824 |
ICL Group LimitedConsolidated Financial Statements37
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1311 - Intangible Assets (cont'd)
| A. | Composition (cont’d) |
Goodwill | Concessions and mining rights | Trademarks | Technology / patents | Customer relationships | Computer application | Others | Total | |
$ millions | ||||||||
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Intangible assets having a defined useful life | 365 | 415 |
| Intangible assets having an indefinite useful life | 357 | 409 |
| 722 | 824 |
Cost | ||||||||
Balance as of January 1, 2022 | 522 | 215 | 88 | 97 | 203 | 124 | 70 | 1,319 |
Additions | - | 2 | - | 9 | - | 20 | 2 | 33 |
Adjustment to PPA (1) | 5 | - | - | 6 | (6) | - | - | 5 |
Translation differences | (1) | (7) | (4) | (4) | (3) | (2) | (3) | (24) |
Balance as of December 31, 2022 | 526 | 210 | 84 | 108 | 194 | 142 | 69 | 1,333 |
Amortization | ||||||||
Balance as of January 1, 2022 | 20 | 80 | 34 | 58 | 131 | 74 | 55 | 452 |
Amortization for the year | - | 6 | 2 | 5 | 15 | 9 | 3 | 40 |
Translation differences | (1) | (1) | (2) | (3) | (2) | (1) | (1) | (11) |
Balance as of December 31, 2022 | 19 | 85 | 34 | 60 | 144 | 82 | 57 | 481 |
- | ||||||||
Amortized Balance as of December 31 ,2022 | 507 | 125 | 50 | 48 | 50 | 60 | 12 | 852 |
| (1) | In July 2022, the Company completed the ADS’s Purchase Price Allocation (PPA). | |
ICL Group LimitedConsolidated Financial Statements38
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 1411 - Intangible Assets (cont'd)
| B. | Total book value of intangible assets having defined useful lives and those having indefinite useful lives are as follows: |
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
Intangible assets having a defined useful life | 311 | 313 |
Intangible assets having an indefinite useful life | 562 | 539 |
873 | 852 |
Note 12 - Impairment Testing
| Impairment testing for intangible assets with an indefinite useful life |
Goodwill and intangible assets with an indefinite lifespan are not amortized on a systematic basis but, rather, are examined at least once a year for impairment.
The goodwill is not monitored for internal reporting purposes and, accordingly, it is allocated to the Company’s operating segments and not to the cash-producing units, the level of which is lower than the operating segment.segments. The examination of impairment in valuetest of the carrying amount of goodwill is madeconducted accordingly.
For the purpose of impairment testing other intangible assetspurpose, the trademarks with an indefinite useful life were allocated to the cash-generating units, which represent the lowest level within the Company.
The carrying amounts of intangible assets with an indefinite useful life are as follows:
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
Goodwill | ||
Phosphate Solutions | 114 | 110 |
Industrial Products | 91 | 90 |
Growing Solutions | 289 | 271 |
Potash | 20 | 20 |
Other | 16 | 16 |
530 | 507 | |
Trademarks | 32 | 32 |
562 | 539 |
| Goodwill | ||
| Specialty Solutions | 207 | 211 |
| Essential Minerals | 119 | 166 |
| 326 | 377 | |
| Trademarks | ||
| Industrial Products, United States | 13 | 13 |
| Advanced Additives, United States | 7 | 9 |
| Food, United States | 5 | 5 |
| Industrial Products, Europe | 6 | 5 |
| 31 | 32 | |
| 357 | 409 |
ICL Group LimitedConsolidated Financial Statements39
Notes to the Consolidated Financial Statements as of a structural change, ICL Specialty Fertilizers (previously presented under Specialty Solutions segment) is part of “Essential Minerals Segment” (see December 31, 2023
Note 5). The comparative Goodwill amounts have been restated in order to reflect the change.12 - Impairment Testing (cont’d)
Impairment testing for intangible assets with an indefinite useful life (cont’d)
In connection with the goodwill impairment testing, the after‑tax discount rate used for the calculationthird quarter of the recoverable amount of the operating segments is 6% (real) – 8% (nominal). The long‑term growth rate is between 0% and 2%, in industries and markets in which2023, the Company is engaged.
conducted its annual impairment test of goodwill and did not identify any impairment. The recoverable amount of the operating segments was determined based on their value in use, which is based on an internal valuation of the discounted future cash flows that will be generated from the continuing operationoperations of the operating segments. As a result
The future cash flow of each operating segment was based on the examinations made, it was determined thatsegment approved five-year plan, which includes segment estimations for revenues, operating income and other factors, such as working capital and capital expenditures. The segments' projections were based, among other on the carrying amount ofassumed sales volume growth rates according to long-term expectations, internal selling prices and raw materials prices based on external data sources, when applicable and relevant.
The key assumptions used to calculate the operating segments is lower than theirsegments' recoverable amountamounts are a nominal after‑tax discount rate of 10.6% and accordingly, no impairment loss was recognized.
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1513 - Derivative InstrumentsCredit from Banks and Others
| Included in current assets and liabilities: | ||||
| Foreign currency and interest derivative instruments | 1 | (3) | 8 | (3) |
| Derivative instruments on energy and marine transport | 4 | - | 4 | - |
| 5 | (3) | 12 | (3) | |
| Included in non-current assets and liabilities: | ||||
| Foreign currency and interest derivative instruments | 64 | (3) | 3 | (5) |
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
Short-term debt | ||
From financial institutions | 283 | 313 |
Current maturities of: | ||
Debentures | 441 | 116 |
Long-term loans from financial institutions | 62 | 15 |
Lease Liability | 72 | 68 |
575 | 199 | |
Total Short-Term debt | 858 | 512 |
Long- term debt and debentures | ||
Long term lease liability | 276 | 270 |
Loans from financial institutions | 734 | 721 |
1,010 | 991 | |
Marketable debentures | 1,203 | 1,329 |
Non-marketable debentures | 191 | 191 |
1,394 | 1,520 | |
2,404 | 2,511 | |
Less – current maturities of: | ||
Debentures | 441 | 116 |
Long-term loans from financial institutions | 62 | 15 |
Lease liability | 72 | 68 |
575 | 199 | |
Total Long- term debt and debentures | 1,829 | 2,312 |
For further information, see Note 21.
For additional information, see Note 24 Financial Instruments and Risk Management.B. Movement during the year in Credit from Banks and Others (short term credit, Loans and debentures) including interest payables
F - 59
C. Maturity periods
The credit and the loans from banks and others, including debentures (net of current maturities), mature in the years after the date of the report, as follows:
For additional information, see Note 16F below.13 - Credit from Banks and Others (cont’d)
D.
F - 60ICL Group LimitedConsolidated Financial Statements47
Note 16 - Credit from Banks and Others (cont'd)
E. Sale of receivables under securitization transactionIn July 2015, the Company and certain Group subsidiaries (hereinafter – “the Subsidiaries”) signed a series of agreements regarding a securitization transaction with three international banks (hereinafter – “the Lending Banks”) for the sale of their trade receivables to a foreign company which was established specifically for this purpose and which is not owned by the ICL Group (hereinafter – “the Acquiring Company”).Those agreements replace the prior securitization agreements, in the amount of $350 million, which came to an end in July 2015. The main structure of the new securitization agreement is the same as the prior securitization agreement. The Company's policy is to utilize the securitization limit based on its cash‑flow needs, alternative financing sources and market conditions. The new securitization agreement will expire in July 2020. In the agreement, ICL undertook to comply with a financial covenant whereby the ratio of net debt to EBITDA will not exceed 4.75. If ICL does not comply with the said ratio, the Acquiring Company is allowed to discontinue acquiring new trade receivables (without affecting the existing acquisitions). As at the reporting date, ICL is in compliance with the aforementioned financial covenant.The Acquiring Company finances acquisition of the debts by means of a loan received from a financial institution, which is not related to ICL, which finances the loan out of the proceeds from the issuance of commercial paper on the U.S. commercial paper market. The repayment of both the commercial paper and the loan are backed by credit lines from the Lending Banks. In July 2017, the Company reduced its securitization framework, from $405 to $350 million, in order to optimize utilization of the financing framework.The acquisitions are on an ongoing basis, whereby the proceeds received from customers whose debts were sold are used to acquire new trade receivables. The period in which the Subsidiaries are entitled to sell their trade receivables to the Acquiring Company is five years from the closing date of the transaction, where both parties have the option at the end of each year to give notice of cancellation of the transaction. The selling price of the trade receivables is the amount of the debt sold, less the calculated interest cost based on the anticipated period between the sale date of the customer debt and its repayment date. Upon acquisition of the debt, the Acquiring Company pays the majority of the debt price in cash and the remainder in a subordinated note, which is paid after collection of the debt sold. The rate of the cash consideration varies according to the composition and behavior of the customer portfolio. The Subsidiaries handle collection of the trade receivables included in the securitization transaction, on behalf of the Acquiring Company.In addition, as part of the agreements a number of conditions were set in connection with the quality of the customer portfolios, which give the Lending Banks the option to end the undertaking or determine that some of the Subsidiaries, the customer portfolios of which do not meet the conditions provided, will no longer be included in the securitization agreements.F - 61
Notes to the Consolidated Financial Statements as at December 31, 2017
Note 16 - Credit from Banks and Others (cont'd)
E. Sale of receivables under securitization transaction (cont’d)The securitization of trade receivables does not meet the conditions for derecognition of financial assets prescribed in International Standard IAS 39, regarding Financial Instruments – Recognition and Measurement, since the Group did not transfer all of the risks and rewards deriving from the trade receivables. Therefore, the receipts received from the Acquiring Company are presented as a financial liability as part of the short-term credit. As of December 31, 2017, and December 31, 2016, utilization of the securitization facility and trade receivables within this framework amounted to approximately $331 million.2023Once the Company transferred its trade receivables, it no longer has the right to sell them to another party. In the case of a credit default, the Company bears approximately 30% of the overall secured trade receivable balance.The value of the transferred assets (which is approximately their fair value), fair value of the associated liabilities and net position are as follows:
* Less than $1 million.
F - 62
Note 16 - Credit from Banks and Others (cont'd)
F. Information on material loans and debentures outstanding as at December 31, 2017:
F - 63
Notes to the Consolidated Financial Statements as at December 31, 2017 Note 16 - Credit from Banks and Others (cont'd)
F. Information on material loans and debentures: (cont’d)Additional Information:
Private issuance of debentures pursuant to Rule 144A and Regulation S under the U.S. Securities Act of 1933, as amended, to institutional investors in the U.S., Europe, and Israel. The notes are registered for trade in the TACT Institutional; by the Tel-Aviv Stock Exchange Ltd. The notes have been rated BBB (stable). In March 2017, the rating company “Fitch Rating Ltd.” lowered the Company’s credit rating, together with the rating of the debentures, from BBB to BBB- with a stable rating outlook. In November 2017, the rating company “Standard & Poor’s” reaffirmed the Company’s credit rating, together with the rating of the debentures, at BBB-, with a stable rating outlook.
The debentures were listed for trading on the Tel-Aviv Stock Exchange. The debentures are unsecured and contain standard terms and conditions and events of default, as well as a mechanism to raise the interest rate in the event of a decrease in the rating of the debentures (the interest rate will be increased by 0.25% per decrease in the rating by one rating level, starting at a rating of (ilA) and reaching a maximum cumulative interest rate increase of 1% upon reaching a rating of (ilBBB)), a negative pledge undertaking and financial covenants ((1) minimum equity of not less than $1.55 billion; and (2) net debt to EBITDA ratio of not more than 1:5.5). On November 1, 2017, the rating agency Standard & Poor's Maalot ratified the Company’s rating of 'ilAA'. The rating outlook is stable.F - 64
Notes to the Consolidated Financial Statements as at December 31, 2017
G. Credit facilities:
F - 65
Notes to the Consolidated Financial Statements as at December 31, 2017Note 16 - Credit from Banks and Others (cont'd)
H. Pledges and Restrictions Placed in Respect of Liabilities1) The Group has undertaken various obligations in respect of loans and credit received from non‑Israeli banks, including a negative pledge whereby the Group, committed, among other things, in favor of the lenders, to limit guarantees and indemnities to third parties (other than the guarantees in respect to subsidiaries) up to an agreed amount for $550 million. The Group has also undertaken to grant loans only to subsidiaries and to associated companies in which it holds at least 25% of the voting rights – not more than stipulated by the agreement with the banks. ICL has further committed not to grant any credit, other than in the ordinary course of business, and not to register any charges, including rights of lien, except those defined in the agreement as “liens permitted to be registered” on its existing and future assets and income. For details with regards to the covenants in respect of these loans, see Note 16.D. above.2) As of the date of this report, the total guarantees of the Company were $77 million.Note 17 – Other Current Liabilities
F - 66
Notes to the Consolidated Financial Statements as at December 31, 2017Note 1815 - Taxes on Income
A. TaxationThe current and deferred taxes expenses of companies in Israel1. Income tax ratesPresented hereunderIsraeli entities are booked under the applicable tax rates relevant to the Company in the years 2015–2018 and after:below:
2015 – 26.5%2016 – 25%2017 – 24%2018 and after 23%
On December 22, 2016 theThe Israeli plenary Knesset passed the Economic Efficiency Law (Legislative Amendments for Achieving the Budget Targets for 2017 and 2018), 2016, which provides, among other things, for a reduction of the Companies Tax rate from 25% to 23% in two steps – the first step to the rate of 24% commencing from 2017 and the second step to the rate of 23% commencing from 2018 and thereafter, along with reduction of thestatutory primary income tax rate applicable to “Preferred Enterprises” (see A.2.b below) regarding factories in the peripheral suburban areas, from 9% to 7.5%, as part of amendment of the Law for Encouragement of Capital Investments.is 23%.
The current taxes for the periods reported are calculated in accordance with the tax rates shown in the table above.2. Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (hereinafter – the Encouragement Law)a) Beneficiary Enterprises1) Reduced tax ratesRegardingUnder the “tax exemption”“Ireland” track, the Company chose 2005 as the election year, whereas regarding the “Ireland” track, which is subject topaid a reduced tax at the rate of 11.5%, the Company chose as of 2008 as the election year. 2012 was also elected though taxon parts of its income. The benefit on this election do not get into force due to reduction of turnover compared to the 3 year average turnover prior to that year. The benefits deriving from a “Beneficiary Enterprise” under the "tax exemption" track ended in 2014 while the benefits deriving from the "Ireland" track ended in 2017.A company having2017, excluding a “Beneficiary Enterprise” that distributes a dividend out of exempt income, will be subject to companies taxsingle entity in the year inIsrael for which the dividend was distributed on the amount distributed (including the amount of the companies tax applicable due to the distribution) at the tax rate applicable under the Encouragement Lawentitlement ended in the year in which the income was produced, had it not been exempt from tax.F - 67
Notes to the Consolidated Financial Statements as at December 31, 2017Note 18 - Taxes on Income (cont’d)
A. Taxation of companies in Israel (cont’d)2. Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (cont’d)1) Reduced tax rates (cont’d)The temporary difference related to distribution of a dividend from exempt income as at December 31, 2017, in respect of which deferred taxes were not recognized, is in the amount of $702 million.
2) Accelerated depreciationThe amendment stipulates that in any dividend distribution from companies holding accumulated profits that were exempt from tax until their distribution as a dividend ("trapped earnings"), a certain part of the distribution will be considered a distribution of those trapped earnings, which will be fully taxed upon release. b) Preferred EnterprisesIn December 2021, the Company recognized a tax provision for the release of trapped earnings in the total amount of $47 million. No additional tax provision is required in respect of the unreleased trapped earnings which as of December 31, 2023, amounted to about NIS 950 million ($262 million).
On
F - 68
A. Taxation of companies in Israel (cont’d)
2. Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (cont’d)On 3. The Law for the Encouragement of Industry (Taxation), 1969
4. The Law for Taxation of Profits from Natural ResourcesOn November 30, 2015, the Knesset passed the Law for Taxation of Profits from Natural Resources (hereinafter – the Law), which entered into effectgovernment take on January 1, 2016, except with respect to DSW, regarding which the effective date is January 1, 2017.natural resources in Israel includes three elements: Royalties, Corporate Income Tax and Surplus Profit Levy. The highlights of the Law are set forth below:
The total tax on natural resources in Israel will include three tax elements: royalties, Natural Resources Tax and Companies income Tax.Royalties:TheIn accordance with the Mines Ordinance, the rate of the royalties, in connection with resources produced from the quarries, in accordance with the Mines Ordinance will be 5% (with respect to. For production of the phosphates, the royalty rate will beis 5% of the value of the sold quantity produced – instead of 2%). Pursuant to the salt harvesting agreement signedproduced.
F - 69
4.
As part of(hereinafter – the agreement, it was provided that if a lawLaw), is enacted that changes the specific fiscal policy with reference to profits or royalties deriving from quarrying from the Dead Sea, the Company's consent to the increase of the rate of the royalties, as stated, will not apply. The Law entered into effect oneffective since January 1, 2016. For additional details – see Note 21C.Imposition of Natural Resources Tax:
F - 70
4. The Law for Taxation of Profits from Natural Resources (cont’d)For purposes of calculating the total revenues from bromine sold to related parties for purposes of downstream manufacturing activities in every tax year, a calculation method will be employed (Netback) whereby the price will be determined based on the higher of the following:
ICL Group LimitedConsolidated Financial Statements41
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1613 - Credit from Banks and Others (cont’d)
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Short-term credit | ||
| From financial institutions | 635 | 572 |
| From the parent company | 175 | - |
| 810 | 572 | |
| Current maturities | ||
| Long term loans from financial institutions | 12 | 16 |
| Total Short Term Credit | 822 | 588 |
| Long- term debt and debentures | ||
| Loans from financial institutions | 786 | 1,254 |
| Other loans | 98 | 87 |
| 884 | 1,341 | |
| Less – current maturities | 12 | 16 |
| 872 | 1,325 | |
| Marketable debentures | 1,241 | 1,196 |
| Non-marketable debentures | 275 | 275 |
| Total Long- term debt and debentures | 2,388 | 2,796 |
| B. | |
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
Balance as of January 1 | 2,813 | 2,914 |
Changes from financing cash flows | ||
Receipt of long-term debts | 633 | 1,045 |
Repayment of long-term debt | (836) | (1,181) |
Repayment of short-term credit | (25) | (21) |
Interest paid | (125) | (113) |
Receipt from transaction in derivatives, net | 5 | 20 |
Total net financing cash flows | (348) | (250) |
Initial recognition of lease liability | 94 | 64 |
Interest expenses | 164 | 148 |
Effect of changes in foreign exchange rates | 18 | (97) |
Change in fair value of derivatives | 26 | 67 |
Other changes | (64) | (33) |
Balance as of December 31 | 2,703 | 2,813 |
(*) The balance includes Short-term debt, loans and debentures, derivatives on loans and debentures, and interest payables.
ICL Group LimitedConsolidated Financial Statements42
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1613 - Credit from Banks and Others (cont’d)
| C. | Sale of receivables under securitization transaction |
In September 2020, the Company and certain subsidiaries (hereinafter – the Subsidiaries) signed a series of agreements regarding a securitization transaction with three international banks (hereinafter – the Lending Banks) for the sale of their trade receivables to a special company which was established specifically for this purpose (hereinafter – the Acquiring Company).
The new securitization agreements were signed with a committed amount of $300 million and an additional uncommitted amount of $100 million, maturing in September 2025 (hereinafter – the Agreements). These Agreements replace the prior securitization agreements, which expired in September 2020. The structure and terms of the Agreements are very similar to the prior securitization agreement.
The Company's policy is to utilize the securitization limit based on its cash flow needs, alternative financing sources and market conditions. According to the Agreements, the Company undertook to comply with a financial covenant according to which the ratio of net debt to EBITDA will not exceed 4.75. If the Company does not meet this ratio, the Acquiring Company can discontinue acquiring new trade receivables (without affecting existing acquisitions). As of the reporting date, the Company complies with the above financial covenant.
The Acquiring Company finances acquisition of the debts through a loan received from a financial institution that is not affiliated with the Company. The period during which the Subsidiaries are entitled to sell their trade receivables to the Acquiring Company is five years from the closing date of the transaction, both parties have the option, at the end of each year, to notify for the transaction's cancellation. Once the Company has transferred its trade receivables, it no longer has the right to sell them to another party. The selling price of the trade receivables is the amount of the debt sold, less the calculated interest cost based on the expected period between the sale date of the customer debt and its repayment date. Upon acquisition of the debt, the Acquiring Company pays part of the debt price in cash and the remainder in a subordinated note, which is paid after collection of the debt sold. The rate of the cash consideration varies depending on the composition and behavior of the customer portfolio. The Subsidiaries continue to handle the collection of the trade receivables included in the securitization transaction, on behalf of the Acquiring Company.
In addition, the Agreements set several conditions regarding the quality of the customer portfolios, which give the Lending Banks the option of terminating the undertaking or excluding the subsidiaries whose customer portfolios do not meet the provided conditions from the Agreements.
The trade receivables are fully presented in the Company's statements of financial position and the receipts received from the Acquiring Company are presented as a financial liability under short-term credit. As of December 31, 2023, utilization of the securitization facility within this framework amounted to $182 million (December 31, 2022 - $233 million).
ICL Group LimitedConsolidated Financial Statements43
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 13 - Credit from Banks and Others (cont’d)
| D. | Information on material loans and debentures outstanding as of December 31, 2023: |
Instrument type | Loan date | Original principal (millions) | Currency | Carrying amount ($ millions) | Interest rate | Principal repayment date | Additional information |
Debentures - Series F | May 2018, December 2020 | 693 | US Dollar | 714 | 6.38% | May 2038 | (2), (3) |
Debentures - Series E | April 2016 | 1,569 | Israeli Shekel | 108 | 2.45% | 2021- 2024 (annual installment) | Partially repaid (1), (3) |
Debentures (private offering) – 3 series | January 2014 | 275 | US Dollar | 145 46 | 5.16% 5.31% | January 2024 January 2026 | (2), (3), (5) |
Debentures - Series G | January/May 2020 | 766 | Israeli Shekel | 198 | 2.40% | 2022- 2034 (annual installment) | Partially repaid (1), (3) |
Debentures - Series D | December 2014 | 184 | US Dollar | 184 | 4.50% | December 2024 | (2), (3) |
Sustainability linked loan (SLL) | September 2021 | 250 | Euro | 276 | 0.80% | September 2026 | (4) |
Loan - European Bank | September 2021 | 25 | Euro | 28 | 0.95% | June 2025 | |
Loan-Israeli institutions | November 2013 | 300 | Israeli Shekel | 29 | 4.74% | 2015-2024 (annual installment) | Partially repaid |
ICL Group LimitedConsolidated Financial Statements44
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 13 - Credit from Banks and Others (cont’d)
| D. | Information on material loans and debentures outstanding as of December 31, 2023: (cont’d) | |
Additional Information:
| (1) | In March 2023, the Company repaid, as scheduled, NIS 392 million (approx. $108 million) of Series E Bond. In December 2023, the Company repaid NIS 15 million (approx. $4 million) of Series G Bond, as scheduled. |
| (2) | In June 2023, Fitch Ratings reaffirmed the Company’s long-term issuer default rating and senior unsecured rating at 'BBB-'. The outlook on the long-term issuer default rating is stable. |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| (3) | In July 2023, S&P credit rating reaffirmed the Company’s international credit rating and senior unsecured rating of 'BBB-'. In addition, the S&P Maalot credit rating agency reaffirmed the Company’s credit rating of 'ilAA' with a stable rating outlook. |
| Second year | 261 | 16 |
| Third year | 18 | 323 |
| Fourth year | 213 | 27 |
| Fifth year | 644 | 1,046 |
| Sixth year and thereafter | 1,252 | 1,384 |
| 2,388 | 2,796 |
| (4) | The loan includes three sustainability performance targets: (1) an annual 4% to 5% reduction in direct and indirect Scope 1 and Scope 2 CO2 emissions resulting from ICL global operations.(2) Through 2025, the Company is committed to adding a significant number of Tfs (Together for Sustainability) qualified vendors each year who meet criteria of management, environment, health and safety, labor and human rights, ethics, and governance and (3) for female to hold at least 25% of senior management roles, by the end of 2024. As of December 31, 2023, the Company is in compliance with the relevant sustainability performance targets. |
| (5) | In January 2024, the Company repaid $145 million private placement Bond, as scheduled. |
| (6) | As of December 31, 2023, the Company is in compliance with all its financial covenants set forth in its financing agreements. See item F below. | |
ICL Group LimitedConsolidated Financial Statements45
Notes to the Consolidated Financial Statements as of December 31, 2023
| E. | Credit facilities: |
| Issuer | Group of international banks | European bank |
| Date of the credit facility | April 2023 | December 2016 |
| Date of credit facility termination | April 2028 | May 2024 |
| The amount of the credit facility | USD 1,550 million (1) | USD 30 million |
| Credit facility has been utilized | Euro 340 million | USD 30 million |
| Interest rate | Up to 33% use of credit: Euribor/ SOFR + 0.80%. From 33% to 66% use of credit: Euribor/ SOFR + 0.90% 66% or more use of credit: Euribor/ SOFR + 1.05% | SOFR + 1.06% |
| Loan currency type | USD and Euro loans | USD loans |
| Pledges and restrictions | Financial covenants - see Section F, a cross-default mechanism and a negative pledge (2) | Financial covenants - see Section F and a negative pledge. |
| Non-utilization fee | 0.245% | - |
| (1) | In April 2023, the Company entered into a Sustainability-Linked Revolving Credit Facility Agreement made between ICL Finance B.V. and a consortium of twelve international banks for a $1,550 million credit facility. The Sustainability-Linked RCF replaced a previous revolving credit facility that was entered into in 2015, as amended and extended in 2018, and which was due to expire in 2025. |
| (2) | In line with ICL’s strategic commitment to sustainability, the Sustainability-Linked RCF follows ICL’s initial Sustainability-Linked Term Loan dated September 2021. The Sustainability-Linked RCF includes three Key Performance Indicators (KPIs) which have been designed to align with ICL’s sustainability goals: a reduction in Absolute Scope 1 & 2 GHG Emissions; an increase in the percentage of female representation among senior ICL management; and an increase in the number of valid TfS (Together for Sustainability initiative) scorecards obtained for ICL Group suppliers. Each of these goals will be assessed regularly during the term of the Sustainability-Linked RCF through third-party verification of ICL’s performance in these areas. |
ICL Group LimitedConsolidated Financial Statements46
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 13 - Credit from Banks and Others (cont’d)
| F. | Restrictions on the Group relating to the receipt of credit |
As part of the loan agreements the GroupCompany has signed, various restrictions apply including sustainability performance targets and financial covenants, a cross‑default mechanism and a negative pledge.
Set forth below is information regarding the financial covenants applicable to the Company as part of the loan agreements and the compliance therewith:therewith. For the Company’s sustainability performance targets see item D(4) above.
Financial Covenants:
Financial Covenants (1) | Financial Ratio Required under the Agreement | Financial Ratio December 31, |
2023 |
Total shareholder's equity | Equity | $ 5,768 million |
Ratio of | Equal to or | 15.59 |
Ratio of the net financial debt to EBITDA | Less than | 1.12 |
Ratio of | Less than 10% | 2.69% |
| (1) |
| G. | Pledges and Restrictions Placed in Respect of Liabilities |
| (1) | The Company has undertaken various obligations in respect of loans and credit lines from banks, including a negative pledge, whereby the Company committed, among other things, in favor of the lenders, to limit guarantees and indemnities to third parties (other than guarantees in respect of subsidiaries) up to an agreed amount of $550 million. The Company has also committed to grant loans only to subsidiaries and to associated companies, in which it holds at least 25% of the voting rights. The Company has further committed not to grant any credit, other than in the ordinary course of business, and not to register any charges on its existing and future assets and income. For further information regarding the covenants in respect of these loans and credit lines, see item F above. |
| (2) |
Notes to the Consolidated Financial Statements as at December 31, 2017
Note 14 – Other Payables
| Year ended December 31, | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
| Value of the transferred assets | 331 | 331 | 285 |
| Fair value of the associated liabilities | 331 | 331 | 285 |
| Net position * | - | - | - |
| Instrument type | Loan date | Original principal (millions) | Currency | Carrying amount 31 December, 2017 $ millions | Interest rate | Principal repayment date | Additional information |
| Loan-Israeli institutions | November 2013 | 300 | Israeli Shekel | 76 | 4.94% | 2015-2024 (annual installment) | Partially prepaid |
| Debentures (private offering) – 3 series | January 2014 | 84 145 46 | U.S Dollar | 84 145 46 | 4.55% 5.16% 5.31% | January 2021 January 2024 January 2026 | |
| Loan-international institutions | July 2014 | 27 | Euro | 26 | 2.33% | 2019-2024 | Partially prepaid |
| Debentures-Series D | December 2014 | 800 | U.S Dollar | 792 | 4.50% | December, 2024 | (1) |
| Loan-European Bank | December 2014 | 161 | Brazilian Real | 30 | CDI+1.35% | 2015-2021 (Semi annual installment) | |
| Loan from a European Bank | December 2015, December 2013 | 129 | U.S Dollar | 129 | Libor+1.40% | December 2019 | |
| Debentures-Series E | April 2016 | 1,569 | Israeli Shekel | 449 | 2.45% | 2021- 2024 (annual installment) | (2) |
| Loan - others | April - October, 2016 | 600 | Chinese Yuan Renminbi | 92 | 5.23% | 2019 | |
| Loan - Asian Banks | June - October, 2017 | 700 | Chinese Yuan Renminbi | 108 | 4.72% | 2018 | |
| Loan - Asian Bank | October, 2017 | 400 | Chinese Yuan Renminbi | 61 | CNH Hibor + 0.50% | April 2018 | |
| Loan - Parent Company | November - December, 2017 | 175 | U.S Dollar | 175 | 1.81% | 2018 | See Note 26D |
Employees (1) | 309 | 368 |
Current tax liabilities | 170 | 177 |
Accrued expenses | 91 | 98 |
Governmental (mainly in respect of royalties) | 88 | 168 |
Income received in advance | 17 | 41 |
Derivative instruments | 7 | 44 |
Others | 101 | 111 |
783 | 1,007 |
| (1) |
Note 16 - Credit from Banks and Others (cont'd)
| Issuer | European bank | Group of eleven international banks | American bank | European Bank |
| Date of the credit facility | March 2014 | March 2015 | March 2016 | December 2016 |
| Date of credit facility termination | March 2020 | March 2022* | March 2022* | June 2023 |
| The amount of the credit facility | USD 35 million, Euro 60 million* | USD 1,705 million | USD 150 million | USD 136 million |
| Credit facility has been utilized | - | USD 530 million** | - | - |
| Interest rate | Up to 33% use of the credit: Libor/Euribor + 0.90%. From 33% to 66% use of the credit: Libor/Euribor + 1.15% 66% or more use of the credit: Libor/Euribor + 1.40% | Up to 33% use of the credit: Libor/Euribor + 0.70%. From 33% to 66% use of the credit: Libor/Euribor + 0.80% 66% or more use of the credit: Libor/Euribor + 0.95% | Up to 33% use of the credit: Libor + 0.65%. From 33% to 66% use of the credit: Libor + 0.75%. 66% or more use of the credit: Libor + 0.95% | Libor +0.75% |
| Loan currency type | USD and Euro loans | USD and Euro loans | USD loans | USD loans |
| Pledges and restrictions | Financial covenants - see Section D, a cross-default mechanism and a negative pledge. | Financial covenants - see Section D, a cross-default mechanism and a negative pledge. | Financial covenants - see Section D, a cross-default mechanism and a negative pledge. | Financial covenants - see Section D and a negative pledge. |
| Non-utilization fee | 0.32% | 0.21% | 0.19% | 0.30% |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Employees | 240 | 210 |
| Accured expenses | 83 | 72 |
| Governmental (mainly in respect of royalties) (1) | 67 | 117 |
| Current tax liabilities | 48 | 57 |
| Dividend payable | - | 60 |
| Others | 157 | 192 |
| 595 | 708 |
| A. | Taxation of companies in Israel |
| 1. | Income tax rate |
| 2. | Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (hereinafter – the Encouragement Law) | |
| a) | Beneficiary Enterprises |
The production facilities of some of the Company’s subsidiaries in Israel (hereinafter – the Subsidiaries)Subsidiaries) have received “Beneficiary Enterprise” status under the Encouragement law as worded after Amendment No. 60 to the Law was published in April 2005.
The benefitsmain benefit granted to the company are mainly:Subsidiaries is a preferred tax rate.
2021.
The part of the taxable income entitled to benefits at reduced tax rates is calculated based on the basis of the ratio of the “Beneficiary Enterprise” turnover of the “Benefited Enterprise” to the Company’sa company’s total turnover. The turnover attributed to the “Benefited“Beneficiary Enterprise” is generally calculated according to the increase in the turnover compared to a “base” turnover, which is the average turnover in the three years prior to the election year of electionthe “Beneficiary Enterprise”.
A company having a “Beneficiary Enterprise” that distributes a dividend out of exempt income, will be subject to corporate tax in the year in which the dividend was distributed on the amount distributed (including corporate tax applicable amount due to the distribution) at the tax rate applicable under the Encouragement Law in the year in which the income was generated, had it not been exempt from tax.
ICL Group LimitedConsolidated Financial Statements48
Notes to the Consolidated Financial Statements as of December 31, 2023
Note 15 - Taxes on Income (cont'd)
| A. | Taxation of companies in Israel (cont'd) |
| 2. | Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (cont'd) | |
| a) | Beneficiary Enterprise (cont'd) | |
In November 2021, the Israeli Economic Efficiency Law for the years 2021 and 2022 was published, which consists of numerous legislative amendments and arrangements, including an amendment to Section 74 of the “Benefited Enterprise”Encouragement Law, (hereinafter - the amendment).
In respect of buildings, machinery and equipment used byaddition, a temporary provision to the Approved Enterprise, the Company is entitledEncouragement Law was published, which was valid until November 14, 2022, offered a reduced tax payment arrangement to claim accelerated depreciation as provided by law, including the Income Tax Regulations – Adjustments for Inflation (Depreciation Rates), 1986, commencing from the year each asset is placed in service.companies that have trapped earnings.
| b) | Preferred Enterprises |
In December 29, 2010, the Israeli Knesset approved the Economic Policy Law for 2011‑2012,2011-2012, whereby the Encouragement law, was amended (hereinafter – the Amendment)Amendment). The Amendment is effective from January 1, 2011 and its provisions will apply to preferred income, derived or accrued by a Preferred Enterprise, as defined in the Amendment, in 2011 and thereafter.
The Amendment does not apply to an Industrial Enterprise that is a mine, or any other facility for production of minerals or a facility for exploration of fuel. Therefore, ICL plants that are defined as mining plants and mineral producers will not be able to take advantage of the tax rates included as part of the Amendment. In addition, on August 5, 2013, the Law for Change in the Order of National Priorities, 2013, was passed by the Knesset, which provides that the
The tax raterates applicable to a Preferred Enterprise in Development Area A will be 9% whereas the tax applicable to companies in the rest of Israel will be 16%. Pursuant to the amendment to the Encouragement law that was approved as part of the Economic Efficiency Law (Legislative Amendments for Achieving the Budget Targets for 2017 and 2018), 2016 ,the tax rate applicable to enterprises in the suburban areas was reduced from 9% to 7.5%. The Company has Preferred Enterprises at the tax rate of 7.5%.in Israel:
| 1) | Preferred Enterprises located in Development Area A – 7.5%. | |
| 2) | Preferred Enterprises located in the rest of the country – 16%. |
ICL Group LimitedConsolidated Financial Statements49
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1815 - Taxes on Income (cont’d)(cont'd)
| A. | Taxation of companies in Israel (cont'd) | |
| 2. | Tax benefits under the Israeli Law for the Encouragement of Capital Investments, 1959 (cont'd) |
b) Preferred Enterprises (cont’d)(cont'd)
In November 30, 2015, the Knesset passed the Economic Efficiency Law, was passed by the Knesset, which expanded the exception to all of anthe Enterprise’s activities up to the time of the first marketable product (for additional details – see Section 4 below). Nonetheless,However, tax benefits to which a BenefitedBeneficiary Plant iswas entitled willwere not be cancelled in respect of investments made up to December 31, 2012. Therefore, thosesuch plants will beare able to utilize the tax benefits in respect of qualifyingsuch investments, made up to December 31, 2012, in accordance with the provisions of the old law.Itlaw.
It is further provided in the Amendment that tax will not apply to a dividend distributed out of preferred income to a shareholder that is an Israeli‑residentIsraeli-resident company. A dividend distributed out of preferred income to a shareholder that is an individual or a foreign resident is subject to tax at thea rate of 20%, unless a lower tax rate applies under a relevant treaty for prevention of double taxation.
| 3. | The Law for the Encouragement of Industry (Taxation), 1969 | |
| a) | Some of the Company’s Israeli subsidiaries are “Industrial Enterprise”, as defined in the |
| b) | The Industrial Enterprises owned by some of the Company's Israeli subsidiaries have a common line of production or similar industrial branch activity and, therefore, they file, together with the Company, a consolidated tax return in accordance with Section 23 of the Law for the Encouragement of Industry. Accordingly, each of the said companies is entitled to offset its tax losses against the taxable income of the other companies. | |
| 4. | Taxation of Profits Natural Resources |
| 4.1 | Royalties | |
In accordance with the Government on July 8, 2012,Israeli Dead Sea Concession Law, 1961, the parties agreed, inter‑alia, to an increase in theroyalty rate for potash, bromine and magnesium is 5% of the royalties from 5% to 10%value of the sales, for everysold quantity of potash chloride sold by the Company in a given year, in excess of a quantity of 1.5 million tons..
ICL Group LimitedConsolidated Financial Statements50
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1815 - Taxes on Income (cont'd)
| A. | Taxation of companies in Israel (cont'd) |
| 4. | Taxation of Profits Natural Resources (cont'd) |
| 4.2 | Imposition of Surplus Profit Levy |
The Law for Taxation of Profits from Natural Resources (cont’d)
The law is applied for the bromine, phosphate and magnesium minerals from 2016 and for potash from 2017. The tax base, which will be calculated for every mineral separately, is the mineral’s operating income, in accordance with the accounting statement of income, to which certain adjustments will be made, less financing expenses atmade.
The taxable profit is based on the ratefirst traded product mineral operating income, as adjusted, after a deduction of 5% of the mineral’s averageyear end working capital, and less an amount that reflects a yield of 14% on the value of property, plant and equipment used for production and sale of the quarried material (hereinafter – the Yield on the Property, Plant and Equipment)Yield).
On the tax base, as stated, a progressive tax will be imposed at a rate to be determined based on the Yield on the Property, Plant and Equipment in that year. For thea Yield on the Property, Plant and Equipment between 14% and 20%, Natural Resources Tax will be imposed at the rate of 25%, while the yieldYield in excess of 20% will be subject to Natural Resources Tax at the rate of 42%. In years in which the Natural Resources Tax base is negative, the negative amount will be carried forward from year to year and will constitute a tax shield in the succeeding tax year. The above computations, including the right to use prior years’ losses, are made separately, without taking into accountconsidering setoffs, for each natural resource production and sale activity.
Limitations on the Natural Resources Tax – the Natural Resources Tax will only apply to profits deriving from the actual production and sale of each of the following resources: potash, bromine, magnesium and phosphates, and not to the profits deriving from the downstream industrial activities. Calculation of the Natural Resources Tax will be made separately for every mineral.mineral mining concession. Nonetheless, regarding Magnesium,magnesium, it was provided that commencing from 2017,upon sale of carnaliteCarnalite by DSW to Magnesiummagnesium and reacquisition of a Sylvanite by‑productSylvinite by-product by DSW, Magnesiummagnesium will charge DSW $100 per tontonne of potash, which is produced from the SylvaniteSylvinite (linked to the CPI).
A mechanism was provided for determination of the market price, with respect to transactions in natural resources executed between related parties in Israel, as well as a mechanism for calculation of the manner for costs allocation of the expenses between the production and sale of the natural resource, on the one hand, and the downstream activities, on the other hand.
Regarding the bromine resource, the Natural Resources Tax will apply in the same manner in which it applies to the other natural resources, except with respect to the mannersale price of determining the transfer price in sales madebromine sold to related parties, in and outside of Israel.Israel, who use the bromine for bromine compounds manufacturing activities, shall be, in each tax year, the higher of:
| 1) | Actual price in the sale transaction. |
| 2) | A price which will provide an operating profit for the bromine compounds manufacturer of 12% out of the revenue it generates from bromine compounds sales. |
ICL Group LimitedConsolidated Financial Statements51
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1815 - Taxes on Income (cont'd)
| A. | Taxation of companies in Israel (cont'd) |
| 4. | Taxation of Profits Natural Resources: (cont'd) |
Imposition of |
Regarding the phosphate resource, for purposesthe sale price of calculating the total revenues from phosphate sold to related parties for purposes of downstream manufacturing activities shall be, in everyeach tax year, a calculation method will be employed (Netback) whereby the price will be determined based on the higher of the following:of:
| 1) | Actual price in the sale transaction. |
| | ||
| 2) | A price |
| |
| 3) | The production and operating costs attributable to a unit of phosphate. |
Amendment number 3 to the Law
In November 2021, Amendment number 3 to the Law was approved by the Israeli Kneset, according to which the arrangement of tax collection will be altered so that companies will be required to pay 75% of the disputed tax, after objecting to a tax assessment by appeal to the district court, and prior to a Court ruling. Prior to this amendment, the full payment of the Surplus Profit Levy in dispute was not required until a Court ruling is rendered.
In June 2022, a settlement agreement was signed with the Israeli Tax Authority which provides final assessments for the tax years 2016-2020, as well as outlines understandings for the calculation of the surplus profit levy for the years from 2021 onwards. As a result, in 2022 the Company recorded tax expenses for prior years in the amount of about $188 million.
| 4.3 | Corporate income Tax: |
The Law for Encouragement of Capital Investments was revised such that the definition of a “Plant for Production of Quarries” will include all the plant’s activities up to production of the first marketable natural resource of potash, bromine, magnesium and phosphates. Accordingly, activities involved with production of the first traded resource will not be entitled to tax benefits under the Law, whereas activities relating to downstream products, such as bromine compounds, acids, and fertilizers, etc. will not constitute a base for calculating the Excess Profits Tax and will not be excepted from inclusion inentitled to tax benefits under the Law.
The Natural Resource Tax will be deductible from the Company's taxable income and the Company will pay the CompaniesCorporate Tax on the balance as is customary in Israel.
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1815 - Taxes on Income (cont'd)
| B. | Taxation of non-Israeli subsidiaries |
Subsidiaries incorporated outside of Israel are assessed for tax under the tax laws in their countries of residence. The principal tax rates applicable to the major subsidiaries outside Israel are as follows:
| Country | Tax rate | Note |
| United States | 40% | (1) |
| Brazil | 34% | |
| Germany | 29% | |
| Netherlands | 25% | |
| Spain | 25% | |
| China | 25% | |
| United Kingdom | 19% | (2) |
Country | Tax rate | Note |
Brazil | 34% | |
Germany | 29% | |
United States | 26% | (1) |
Netherlands | 25.8% | |
Spain | 25% | |
China | 25% | |
United Kingdom | 25% | (2) |
| (1) |
| (2) | The tax rate in the UK was |
| C. | Carried forward tax losses |
As at the date of the report,December 31, 2023, the capital losses for tax purposes available for carryforward to future years for which deferred taxes were not recorded amount tois about $159$152 million (December 31, 20162022 – about $174$142 million).
The Company and the main operational companies in Israel (DSW, Rotem, Bromine, DSM, and BCL), have received final tax assessments up to and including 2019. Other companies in Israel received final tax assessments up to and including 2018. The main subsidiaries outside of Israel have final tax assessments up to and including 2015 - 2019.
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1815 - Taxes on Income (cont'd)
1. The composition of the deferred taxes and the changes therein, are as follows:
| Balance as at January 1, 2016 | (363) | 46 | 106 | (48) | 107 | (152) |
| Changes in 2016: | ||||||
| Amounts recorded in the statement of income | (33) | (11) | (11) | 13 | 12 | (30) |
| change in tax rate | 59 | - | (21) | - | (6) | 32 |
| Amounts recorded to a capital reserve | - | - | 8 | (5) | (1) | 2 |
| Translation differences | 1 | - | (6) | 7 | (5) | (3) |
| Additions in respect of business combinations | (2) | - | - | - | - | (2) |
| Balance as at December 31, 2016 | (338) | 35 | 76 | (33) | 107 | (153) |
| Changes in 2017: | ||||||
| Amounts recorded in the statement of income | 74 | (17) | 1 | 11 | (36) | 33 |
| change in tax rate | 13 | - | - | - | - | 13 |
| Amounts recorded to a capital reserve | - | - | 3 | 5 | - | 8 |
| Translation differences | (6) | - | 5 | - | 1 | - |
| Transfer to the group assets held for sale | 2 | - | - | 1 | - | 3 |
| Balance as at December 31, 2017 | (255) | 18 | 85 | (16) | 72 | (96) |
In respect of financial position | In respect of carry forward tax losses | Total | ||||
Depreciable property, plant and equipment and intangible assets | Inventories | Provisions for employee benefits | Other | |||
$ millions | ||||||
Balance as of January 1, 2022 | (421) | 39 | 73 | (16) | 88 | (237) |
Changes in 2022: | ||||||
Amounts recorded in the statement of income | (127) | 33 | 4 | 31 | 35 | (24) |
Amounts recorded to a capital reserve | - | - | (12) | 4 | - | (8) |
Translation differences | 1 | - | (1) | - | (4) | (4) |
Balance as of December 31, 2022 | (547) | 72 | 64 | 19 | 119 | (273) |
Changes in 2023: | ||||||
Amounts recorded in the statement of income | (46) | (22) | (5) | (4) | 19 | (58) |
Amounts recorded to a capital reserve | - | - | (8) | (4) | - | (12) |
Translation differences | (3) | - | 1 | 4 | 4 | 6 |
Balance as of December 31, 2023 | (596) | 50 | 52 | 15 | 142 | (337) |
2. The currencies in which the deferred taxes are denominated:
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
Israeli Shekels | (420) | (368) |
Euro | 38 | 51 |
Brazilian Real | 24 | 28 |
British Pound | 11 | 16 |
U.S Dollar | 1 | (8) |
Other | 9 | 8 |
(337) | (273) | |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Euro | 33 | 30 |
| British Pound | 22 | 17 |
| U.S Dollar | 10 | (25) |
| Israeli Shekels | (166) | (179) |
| Other | 5 | 4 |
| (96) | (153) |
ICL Group LimitedConsolidated Financial Statements54
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1815 - Taxes on Income (cont'd)
| For the year ended December 31 | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
| Current taxes | 208 | 68 | 159 |
| Deferred taxes | (23) | (45) | (7) |
| Taxes in respect of prior years * | (27) | 32 | 10 |
| 158 | 55 | 162 |
| Taxes on income included in the income statements |
| 1. |
For the year ended December 31 | |||
2023 | 2022 | 2021 | |
$ millions | $ millions | $ millions | |
Current taxes | 251 | 869 | 145 |
Deferred taxes | 47 | 45 | 22 |
Taxes in respect of prior years | (11) | 271 | 93 |
287 | 1,185 | 260 | |
| 2. | Theoretical tax |
Following is a reconciliation of the theoretical tax expense, assuming all income is taxed at the regular tax rates in Israel (see A(2) above) and the tax expense presented in the statements of income:
| For the year ended December 31 | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
For the year ended December 31 | |||
2023 | 2022 | 2021 | |
$ millions | $ millions | $ millions | |
Income before taxes on income, as reported in the statements of income | 974 | 3,404 | 1,092 |
Statutory tax rate (in Israel) | 23% | 23% | 23% |
Theoretical tax expense | 224 | 783 | 251 |
Add (less) – the tax effect of: | |||
Surplus Profit Levy tax | 62 | 265 | - |
Reduced tax due to tax benefits | (17) | (95) | (64) |
Differences deriving from additional deduction and different tax rates applicable to foreign subsidiaries | (32) | 1 | (10) |
Tax on dividend | 4 | 5 | 3 |
Deductible temporary differences and their reversal (including carryforward losses) for which deferred taxes assets were not recorded and non–deductible expenses | 52 | (29) | (8) |
Taxes in respect of prior years* | (11) | 271 | 93 |
Differences in measurement basis | 2 | (21) | (8) |
Other differences | 3 | 5 | 3 |
Taxes on income included in the income statements | 287 | 1,185 | 260 |
* For 2022, included the settlement agreement related to surplus profit levy, as described above.
| Income (loss) before taxes on income, as reported in the statements of income | 505 | (117) | 668 |
| Statutory tax rate (in Israel) | 24% | 25% | 26.5% |
| Theoretical tax expense (income) on this income (loss) | 121 | (29) | 177 |
| Add (less) – the tax effect of: | |||
| Tax benefits deriving from the Law for Encouragement of Capital Investments net of natural Resources Tax | (4) | (3) | (22) |
| Differences deriving from additional deduction and different tax rates applicable to foreign subsidiaries | 23 | (38) | (15) |
| Income taxes from intercompany dividend distribution | 18 | - | - |
| Deductible temporary differences for which deferred taxes assets were not recorded and non–deductible expenses | 15 | 135 | 15 |
| Taxes in respect of prior years | (27) | 32 | 10 |
| Impact of change in tax rates | (13) | (32) | - |
| Differences in measurement basis (mainly ILS vs USD) | 18 | 1 | - |
| Other differences | 7 | (11) | (3) |
| Taxes on income included in the income statements | 158 | 55 | 162 |
ICL Group LimitedConsolidated Financial Statements55
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1815 - Taxes on Income (cont'd)
| G. | Taxes on income relating to items recorded in equity |
| For the year ended December 31 | |||
| 2017 | 2016 | 2015 | |
| $ millions | $ millions | $ millions | |
For the year ended December 31 | ||||||||
2023 | 2022 | 2021 | ||||||
$ millions | $ millions | |||||||
| Tax recorded in other comprehensive income | ||||||||
| Actuarial gains from defined benefit plan | 3 | 8 | (15) | (8) | (12) | (22) | ||
| Change in fair value of financial assets available for sale | 5 | (5) | - | |||||
Change in investments at fair value through other comprehensive income | - | - | (21) | |||||
Change in fair value of hedging derivatives | (4) | 4 | - | |||||
| Taxes in respect of exchange rate differences on equity loan to a subsidiary included in translation adjustment | (5) | (1) | 3 | (9) | (11) | (1) | ||
| Total | 3 | 2 | (12) | (21) | (19) | (44) | ||
Note 1916 - Employee Benefits
| A. | Composition |
Composition of employee benefits:
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
Fair value of plan assets | 453 | 432 |
Termination benefits | (64) | (86) |
Defined benefit obligation | (653) | (664) |
(264) | (318) |
| Fair value of plan assets | 631 | 552 |
| Termination benefits | (142) | (147) |
| Defined benefit obligation | (1,068) | (934) |
| (579) | (529) |
Composition of fair value of the plan assets:
| As at December 31 | ||
| 2017 | 2016 | |
| $ millions | $ millions | |
| Equity instruments | ||
| With quoted market price | 197 | 205 |
| Debt instruments | ||
| With quoted market price | 179 | 133 |
| Without quoted market price | 145 | 126 |
| 324 | 259 | |
| Deposits with insurance companies | 110 | 88 |
| 631 | 552 |
As of December 31 | ||
2023 | 2022 | |
$ millions | $ millions | |
Equity instruments | ||
With quoted market price | 138 | 126 |
Without quoted market price | 38 | 40 |
176 | 166 | |
Debt instruments | ||
With quoted market price | 240 | 232 |
Without quoted market price | 13 | 10 |
253 | 242 | |
Deposits with insurance companies | 24 | 24 |
453 | 432 |
ICL Group LimitedConsolidated Financial Statements56
Notes to the Consolidated Financial Statements as atof December 31, 20172023
Note 1916 - Employee Benefits (cont'd)
| B. | Severance Pay |
| 1. | Israeli companies |
The liabilities relating to employeeCompany has two severance pay rights are coveredplans: one plan according to the provisions of section 14 of the Severance Pay Law, which is accounted for as follows:
In countries wherein subsidiaries operate that have no law requiring payment of severance pay, the Group companiessubsidiaries have not recorded a provision in the financial statements for possible eventual future severance payments to employees, except in cases where part of the activities of the enterprise is discontinued and, as a result, the employees are dismissed.
| C. | Pension and Early Retirement |
| Some of the |
| (2) | Some subsidiaries have signed plans with funds – and with a pension fund for some of ICL Group LimitedConsolidated Financial Statements57 Notes to the Consolidated Financial Statements as Note 16 - Employee Benefits (cont'd) Some of the Company retirees
The actual return
Principal actuarial assumptions
ICL Group LimitedConsolidated Financial Statements58 Notes to the Consolidated Financial Statements as of December 31, 2023
Assuming all other assumptions remain constant, the following
The expenses recorded in respect of defined contribution plans in The
ICL Group LimitedConsolidated Financial Statements59 Notes to the Consolidated Financial Statements as Note
ICL Group LimitedConsolidated Financial Statements60 Notes to the Consolidated Financial Statements as Note
ICL Group LimitedConsolidated Financial Statements61 Notes to the Consolidated Financial Statements as of December 31, 2023 Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
The Company, with the approval of The amount of the indemnification payable by the Company under the
Pursuant to the Israeli Dead Sea Concession Law, 1961 (hereinafter – the Concession Law), as amended in 1986, and the concession deed attached as an addendum to the Concession Law, DSW was granted a concession to utilize the resources of the Dead Sea and to lease the land required for its plants in Sodom for a period In accordance with section 24 (a) of the Supplement to the Concession Law, it is stated, among other things, that at the end of the concession period all the tangible assets located in the concession area will be transferred to the government, in exchange for their amortized replacement value – the value of the assets as if they are purchased as new at the end of the concession period, less their technical depreciation based on their maintenance condition and the unique characteristics of the Dead Sea area. ICL Group LimitedConsolidated Financial Statements62 Notes to the Consolidated Financial Statements as Note
In 2015, the Minister of Finance appointed a team to determine the “governmental activities to be conducted towards the end of the concession period”. The public’s comments in this matter were submitted to an inter-ministerial team. Based on the The consolidated Financial Statements were prepared under management's assumption that it is more likely than not, that DSW will continue to operate the relevant assets for their remaining useful lives, which extends beyond the term of the current concession period, by obtaining a renewed concession or by operating the assets for an alternative holder. The consolidated depreciation expenses in ICL Group LimitedConsolidated Financial Statements63 Notes to the Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
(1) DSW (cont'd) It is expected that Royalties In consideration of the concession, DSW pays royalties to the Government of Israel calculated at DSW granted a sub‑concession to Dead Sea Bromine Ltd. The concessions relate to quarries (phosphate rock), whereas the authorizations cover the use of land as active mining areas. Mining Concession and Licenses Rotem Israel has a unified mining concession which includes the Rotem Field, including Hatrurim, and Zafir Field, including Oron-Zin, until the end of 2024. In order to comply with the concession's provisions, the Company undertook, among other things, to assure that Rotem meets its existing obligations to rehabilitate its mining and plants areas according to outlined requirements attached to the unified concession, as well as by means of a bank guarantee in the amount of $19 million. In the fourth quarter of 2023, Rotem Israel submitted a bid in the tender for a new mining concession held by the Ministry of Energy. In addition, it was granted an exploration license for all the Company's phosphate sites, included in the existing concession. As part of the Company’s efforts to locate phosphate rock resources in Israel, in January 2022, the Ministry of Energy granted Rotem Israel an exploration license for phosphate in an area of 263 acres, north of the Oron Concession. In December 2022, following the completion of a geological survey, the Company received a discovery certificate, which gives it the exclusive right to request a mining license in that area. The Company is working to apply for a concession for approximately 76.6 acres and consequently mining activity is expected to continue at least until 2025. ICL Group LimitedConsolidated Financial Statements64 Notes to the Consolidated Financial Statements as Note
Mining In accordance with the The mining and quarrying activities require a zoning approval of the site based on a plan in accordance with the Israeli Planning and Building Law, 1965. Zin-Oron area - In Barir field - The Company is In NOP 14B, which was formally published later. ICL Group LimitedConsolidated Financial Statements65 Notes to the Consolidated Financial Statements as Note
In 2018 and 2019, petitions were submitted to the Israeli Supreme Court of Justice by the municipality of Arad and by residents of Bedouin community in the "Arad Valley" against the National Council, the Government of Israel and Rotem Israel, to revoke the approval of NOP 14B and to order the National Council to discuss the NOP directives, while giving proper weight to the health risk. In 2020, the inter-ministerial team reached anoutline agreement regarding the examination of the health aspects of the NOP 14B, which, according to the State, constitutes an appropriate response for the review of potential health hazards on which the petitions focus. In 2021, the Israeli Supreme Court of Justice decided to reject the petitions following a preliminary decision by the National Planning and Building Council to incorporate the main points of the outline agreement in the provisions of NOP 14B. At the end of 2021, the Housing Cabinet, approved once again the amended NOP 14B, following which the (former) Minister for Environmental Protection submitted a request for a government review of past decisions prior to promoting the Barir Detailed NOP. In accordance with the decision of the Ministry of the Interior, a deliberation of the matter should have been held by July 2022. As of the reporting date, the deliberation has not yet occurred. The Company is in continuous discussions with the relevant regulators to ensure the deliberation is held as soon as possible. According to the Company's assessment, the estimated useful life of Rotem's phosphate rock reserves in its existing mining areas is limited to a few years. The Company is working to promote suitable alternatives for future phosphate operations at Rotem Israel and to obtain required permits and approvals, including by conducting pilots to adapt various potential types of phosphate rock for the Company’s products as part of an effort to utilize and increase existing phosphate reserves. The Company estimates that it is more likely than not that it will be able to continue its phosphate operations at Rotem Israel, by obtaining the approvals and permits required to ensure its future phosphate operations within a time frame that is not expected to materially impact the Company's results. Nevertheless, there is no certainty as to the success of receiving such approvals and permits, nor is there certainty regarding future phosphate rock resources and/or by what date they will be received. Failure to obtain them, or a significant delay in obtaining them, can lead to a material impact on the Company's business, financial position and results of operations. ICL Group LimitedConsolidated Financial Statements66 Notes to the Consolidated Financial Statements as of December 31, 2023 Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
Other regulations
ICL Iberia was granted mining rights based on legislation of Spain’s Government from 1973 and the regulations accompanying this legislation. Pursuant to the special mining regulations, ICL Iberia received individual licenses for each of the 126 different sites that are relevant to current and future mining activities. Some of the licenses are valid until 2037 and the remainder are effective until 2067.
ICL Boulby has actively engaged in negotiations with the private property owners and has successfully secured the recent renewals of most of the existing lease agreements, as well as purchased the minerals of one lease area on a freehold basis. The renewal of part of the remaining leases was referred to the High Court of Justice in London for a decision regarding the calculation mechanism. The Company estimates that the proceedings will be concluded by the end of 2024. Additional leases, which are still being negotiated, will continue to operate under the terms of the previous leases. Historically, the renewal of leases has not been problematic. ICL Boulby is confident in the renewal of all land and mineral leases, as required, and expects to have or obtain all government approvals and permits necessary for exploiting all targeted mineral resources. ICL Group LimitedConsolidated Financial Statements67 Notes to the Consolidated Financial Statements as of December 31, 2023 Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
In 2022, the North York Moor National Planning Authorities (hereinafter - NYMNPA) granted planning permission for Polyhalite and Salt extraction until 2048. To comply, ICL Boulby was required to produce management plans for NYMNPA approval. As of the reporting date, all required plans are completed, except for one pending dual approval from both Redcar and Cleveland Borough Council and NYMNPA. With respect to the mining royalties, ICL Boulby pays royalties of 2.3% which in 2023 amounted to $2.6 million.
Mining Concessions Grant of Mining Rights to Lindu In ICL Group LimitedConsolidated Financial Statements68 Notes to the Consolidated Financial Statements as of December 31, 2023 Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
Natural Resources Royalties
In 2022, a mediation process was held between Rotem Israel and the Israeli Nature and Parks Authority, as well as all other applicants in the proceedings. In May 2023, a settlement agreement was signed between the parties and consequently approved by the District Court, despite an objection, granting it the force of a judgment. According to the settlement, the total amount of compensation for, among others, the restoration of the Ashalim Stream and its surroundings, is approximately $33.5 million, including past restoration expenses, legal expenses and other expenses. In July 2023, an appeal was filed against the District Court's ruling, claiming, among other things, that this agreement is allegedly unreasonable. In January 2024, the Supreme Court rejected the appeal, granting it the force of a judgment thus concluded the proceedings. In May 2018, the Company was served with a motion for discovery and pursual of documents (hereinafter – the Motion), filed with the Tel Aviv District Court, by a shareholder of the Company (hereinafter – the Movant), as a preliminary proceeding in preparation for the possible filing of an application for certification of a multiple derivative action against officers of the Company and Rotem Israel who, according to the Movant, caused the alleged damages incurred and to be incurred by the Company as a result of the Ashalim incident. In 2018, the parties reached an arrangement, according to which, the legal proceedings will be delayed until the relevant investigation's materials are provided to the Company by the investigating authority. Following the Supreme Court ruling in the above class action, it was agreed that the legal proceedings will be delayed until May 2024. As of the reporting date, such investigative materials have not yet been received. Considering the proceedings are in an early stage and even suspended, there is a difficulty in estimating their outcome. ICL Group LimitedConsolidated Financial Statements69 Notes to the Consolidated Financial Statements as of December 31, 2023 Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
(1) Ecology (cont'd)
ICL Group LimitedConsolidated Financial Statements70 Notes to the Consolidated Financial Statements as of December 31, 2023 Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
(1) Ecology (cont'd)
ICL Group LimitedConsolidated Financial Statements71 Notes to the Consolidated Financial Statements as of December 31, 2023 Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
(1) Ecology (cont'd)
ICL Group LimitedConsolidated Financial Statements72 Notes to the Consolidated Financial Statements as of December 31, 2023 Note 18 - Commitments, Concessions and Contingent Liabilities (cont’d)
(1) Ecology (cont'd)
ICL Group LimitedConsolidated Financial Statements73 Notes to the Consolidated Financial Statements as Note
(1) Ecology (cont'd)
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