Although Israel was not richly endowed with mineral resources, the Dead Sea was one of the world's richest sources of potassium chloride (potash), magnesium bromide, and other salts; more than 1% of the world's refractory-grade magnesia came from the Dead Sea. Israel was the second-largest producer of bromine, ranked sixth in potash production, and seventh in phosphate rock The production of potash and phosphates was Israel's third-leading industry in 2002; ranking fifth through seventh were, respectively, the production of caustic soda, cement manufacture, and diamond cutting (from imported rough diamonds). Cut diamonds ranked third among export commodities in 2002, and chemicals ranked fifth. In 2000, the value of nonmetallic mineral products fell by 8.3%, and the value of production in the mining and quarrying industry fell by 2.3%. Mining and quarrying accounted for 2.7% of industrial production, while nonmetallic minerals accounted for 3.7%. Fertilizer exports earned $418.4 million, out of $28.3 billion in total exports; metal exports earned $279.3 million, and crude fertilizers and minerals, $175.2 million.
Mineral production in 2001 included: beneficiated phosphate rock, 3.51 million tons, down from 4.11 in 2000; potash, 1.77 million tons, up from 1.49 in 1997 (87% was exported); elemental bromine, 206,000 tons (90% was exported); caustic soda, 44,900 tons, up from 41,200 in 1999; and silica sand, 306,000 tons, up from 275,000 in 1997. Israel also produced, primarily for the construction sector, crude steel, refined secondary lead, magnesium metal, hydraulic cement, brick and kaolin clays, gypsum, lime, magnesia, marble, phosphatic fertilizers, phosphoric acid, salt (mainly marine), sand, crushed stone, sulfur, sulfuric acid, and crude construction materials. No fire clays were produced in 2000 and 2001, and no nitrogen in 1999–2001. Dead Sea Works Ltd., a subsidiary of Israel Chemicals Ltd., was the world's fourth-largest potash producer, and planned to increase capacity to 3.25 million tons per year, from 2.8. Although Israel did not mine diamonds, in 2001, 1.37 million carats of imported diamonds were cut, down from 2.37 million in 1997.
The Negev Desert contained deposits of phosphate, copper (low grade), glass sand, ceramic clays, gypsum, and granite. Most of the phosphate deposits, located in the northeastern Negev, were, at best, medium grade, and were extracted by open-pit mining. The government was the principal owner of most mineral-related industries. Privately held industries included the diamond cutting and polishing industry, and cement and potassium nitrate manufacturing.