Cablegate: Results of Blue Lantern Level 3 Pre-License

VZCZCXYZ0014
PP RUEHWEB

DE RUEHTV #3242/01 3120914
ZNR UUUUU ZZH
P 080914Z NOV 07
FM AMEMBASSY TEL AVIV
TO RUEHC/SECSTATE WASHDC PRIORITY 4094
INFO RUEAIIA/CIA WASHDC
RUCPDOC/USDOC WASHDC
RUEKJCS/SECDEF WASHDC
RUCNFB/FBI WASHDC
RHMFIUU/HQ BICE INTEL WASHINGTON DC

UNCLAS TEL AVIV 003242

SIPDIS

SIPDIS
SENSITIVE

STATE FOR PM/DTCC (BLUE LANTERN COORDINATOR, STITZIEL)
STATE FOR NEA/IPA (PECCIA)

E.O. 12958: N/A
TAGS: ETTC KOMC IS
SUBJECT: RESULTS OF BLUE LANTERN LEVEL 3 PRE-LICENSE
END-USE CHECK ON APPLICATION 050061813

REF: STATE 135268

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SUMMARY
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1. (SBU) Acting on instructions in reftel, Embassy Tel Aviv
Blue Lantern Officer visited Dead Sea Magnesium (DSM),
Limited's magnesium plant in Sodom, Israel on November 6, and
interviewed DSM's Procurement and Contracts Manager, Itzik
Ben-Lulu, and the head of DSM's Electrolysis and Chlorination
Plant, Dima Bakman. Blue Lantern Officer also saw firsthand
the lithium sulfur dioxide batteries that DSM wishes to
procure, and how they are being used for the blowers on
individual protection suits. Based on what Blue Lantern
Officer observed during the site visit, the proposed
transaction appears legitimate, and Blue Lantern Officer
recommends issuance of the required export license. END
SUMMARY.

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RESULTS OF SITE VISIT TO DSM'S MAGNESIUM PLANT
--------------------------------------------- -

2. (U) During Blue Lantern Officer's November 6 site visit to
DSM's magnesium plant -- located on the southern shore of the
Dead Sea in Sodom -- DSM Procurement and Contracts Manager
Itzik Ben-Lulu provided an overview of the plant's history
and function. Construction on the magnesium plant began in
1994 and was completed in 1996. It is a joint venture
between Israel Chemicals, Limited (ICL) -- a public company
traded on Israel's stock exchange and owning 65 percent of
DSM's equity -- and Volkswagen AG, which owns 35 percent of
DSM's equity. ICL is a multinational mining company with
numerous mining operations, production plants and worldwide
sales and marketing organizations. ICL's corporate
headquarters are located in Tel Aviv. Volkswagen AG is one
of the world's leading automotive manufacturers.

3. (U) DSM's facilities are integrated into the larger ICL
industrial complex on the southern shore of the Dead Sea.
This complex includes the 75-year old Dead Sea Works -- a
global producer of five different types of potash -- and Dead
Sea Bromine, the largest producer of bromine in the world.
Magnesium chloride is also produced on the complex's grounds.
DSM's annual production capacity is 35,000 tons of
magnesium. It produces ingots and T-bars of various sizes
that are used in the alloying of aluminum, die casting, and
cathodic protection alloys.

4. (SBU) Dima Bakman, DSM's head of its Electrolysis and
Chlorination Plant, gave Blue Lantern Officer a brief tour of
the plant, and explained that the magnesium is extracted from
Dead Sea salts through electrolysis, a byproduct of which is
the production of chorine gas. The 10 workers on site who
oversee the electrolysis wear white "Supergum" personal
protection suits that include masks and a BL 90 blower unit
they wear on their backs like a small backpack. Each of
these units is powered by a Model 5800 BT lithium sulfur
dioxide battery of the type that DSM wishes to procure from
Saft America, Incorporated through its agent in Israel, UMS.
Bakman showed Blue Lantern Officer how the batteries fit into
and power the blowers. He explained that each of the ten
workers uses one battery per month, and so DSM needs
approximately 120 batteries per year. Ben-Lulu said that DSM
has ordered these kinds of batteries once or twice before,
and that DSM also used different blowers in the past. Bakman
lamented that he has to continually order these disposable
batteries, and said he would prefer if he could obtain
rechargeable batteries. (NOTE: "Supergum" -- the producer
of the personal protection suits -- is an Israeli company.
The BL 90 blower is an essential element of the suits they
produce. The suits that Blue Lantern Officer observed were
white-colored variants of the military suits featured on
Supergum's website, at
www.global-defence.com/2003/supergum profile.htm. END NOTE.)
Ben-Lulu said that the batteries, once received, will be
stored in a locked room in a warehouse on DSM's property.
The warehouse is guarded, and one of DSM's employees is
responsible for accounting for the items stored in it.

5. (SBU) After the tour, Ben-Lulu reviewed the paperwork on
the proposed battery order. He provided Blue Lantern Officer
a copy -- in Hebrew -- of DSM's purchase order to UMS. Page

2 of the purchase order shows that the order is for Model
5800 BT lithium sulfur dioxide batteries, and notes that they
will be used to power pressure blowers. (NOTE: Blue Lantern
Officer has sent this two-page document by FAX to PM/DTCC,
care of Judd Stitziel. END NOTE.)

6. (SBU) Ben-Lulu noted that DSM has imported other
controlled items requiring export licenses, including some
Wilden pumps, which are used in the pumping of hydrogen
chloride solution. He provided Blue Lantern Officer with
copies of a procurement order from DSM to Wilden for pumps,
as well as an end-use certificate for the pumps. These
documents -- as well as those noted in paragraph 5 -- were
printed off of his computer. Blue Lantern Officer observed
that Ben-Lulu keeps hard copies and electronic copies of
documentation related to DSM's procurement operations, and
knows how to access them. (NOTE: The two documents
concerning the Wilden pumps were sent by FAX to Judd Stitziel
in PM/DTCC. END NOTE.)

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CONCLUSION
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7. (SBU) Embassy Blue Lantern Officer believes DSM's proposal
to procure the 48 lithium sulfur dioxide batteries is
legitimate, and that the batteries will be used in the
blowers that are part of the personal protection suits worn
by the workers in DSM's electrolysis and chlorination plant.
Embassy Blue Lantern Officer therefore recommends issuing the
export licenses. Ben-Lulu would welcome any clarification
that could be provided on whether he can receive a "blanket
export license" to cover future orders of Model 5800 BT
lithium sulfur dioxide batteries, as well as the Wilden pumps
that DSM is ordering.

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