Potash producer Israel Chemicals (ICL) said on it would resume investments worth more than 5 billion shekels ($1.3 billion) in Israel if the government scraps a planned rise in taxes on natural resources.

The company, which has exclusive rights to mine minerals at the Dead Sea, last year halted or put under review nearly $2 billion in domestic projects because of the proposed tax hikes.

The tax increase was proposed by former Finance Minister Yair Lapid, but his party is no longer part of the governing coalition following a March election, raising the chance the new Likud-led government might soften or even drop the proposal.

Parliament, the Knesset, is expected to decide on the tax rate by the end of this year.

Tel Aviv-based ICL, the world's sixth-biggest potash producer and the only big mining company operating in Israel, said it was making progress in talks with the government on the issue. If taxes are not raised it would plan to invest $1.5 billion in domestic projects over the next four years, including those put on hold last year, it said.

Most of its projects are in the Negev desert in southern Israel.

"ICL hopes that this dialogue will help create new and proper arrangements for all the issues, allowing it to invest again in Israel, after such investments were halted in ... 2014," it said in a statement.

"Within this framework, ICL has presented an investment plan worth over 5 billion (shekels) for projects in the eastern Negev."

The tax proposal recommended a progressive tax of 25 percent after miners reach an annual return on investment of 14 percent, rising to 42 percent for returns over 20 percent. Israel's government currently takes in about 23 percent in taxation from mining companies but that would ultimately rise to between 46 and 55 percent under the proposal.