BESIDES ITS RICH GOLD, CHROMIUM, BORON, TRONA, LIGNITE AND MARBLE DEPOSITS, TURKEY IS A COUNTRY IN WHICH 70 TYPES OF MINERALS ARE BEING EXTRACTED. CURRENTLY, OVER 6,000 DOMESTIC ANDOVER ONE HUNDRED FOREIGN INVESTORS CONTINUE THEIR MINING ACTIVITIES IN TURKEY. MANY UNDISCOVERED DEPOSITS ARE WAITING FOR THEIR INVESTORS TO BE UNEARTHED.
MİTHAT CANSIZ Chief Advisor to CEO of TWF / The Turkish Perspective November 2019 Issue 76
Anatolia, which has been home to dozens of civilizations for centuries, is a cradle of mining as well as of many other areas. Located at Biga Peninsula (Çanakkale) and formerly named as “Troia” in ancient Greek, Truva is now one of the most important archaeological sites in the world. This residential district, which was named as “Ilion” in Hellenistic era, used to have a significant place in mine melting profession.
In the times of King Hiram around 1000 B.C, melting masters of this region were sent to King Solomon for the construction of Temple of Jerusalem. Ancient lead particles found in Truva were most probably made up of Balya (Balıkesir) ore. Economists unanimously agree that the first gold coin was pressed by Lydians in 7th century B.C in Turkish soil. “Sardes” City which is located near İzmir was Lydia's capital and an important gold processing center. The fact that Anatolia has been home to dozens of civilizations from past to present, is a natural result of her having favourable climatic conditions, distributed water resources, arable land, and rich mineral assets. Anatolia has been in a location which conduces to introduction and spreading of many materials necessary for human life in the civilizations from past to present. It will not be wrong to call Anatolia as a pioneer in fields such as agriculture, animal husbandry, and embroidery arts.
Diyarbakır Çayönü copper mine, with its history dating back to 7000 BC (Neolithic period), is one of the most important examples of the long history of Anatolian mining. With the fact that inholding tens of heritages changed the history and having one of the first known temples of the human history “Göbeklitepe” which is listed in UNESCOS's World Heritage List, Anatolia also sets light to 12000 B.C. This land which is identified by Famous Swiss geologist Patrice Moix as “the fascinating part of the Tethian Belt” continues to harbour numerous mysteries regarding its rich underground resources which are waiting to be discovered.
With a long history of mining, Turkey (Anatolia) proceeds to host dozens of mineral types and thousands of mine fields. Currently, over 6,000 domestic and over one hundred foreign investors continue their mining activities in Turkey. Besides its rich gold, chromium, boron, trona, lignite and marble deposits, Turkey is a country in which 70 types of minerals are being extracted. Turkey, with approximately 14 million hectares of licensed mineral land within its borders, is located in the Midwest of the Tethyan Metallogenic Belt that is one of the most important belts in terms of metallic mineral potential.
Turkey also holds 73% of the world's boron reserves within its borders and is placed near the top of world's marble exports ranking. Land of Anatolia, which has a potential of 20 billion tons of lignite, is also the homeland of the high ratio (Cr / Fe) Turkish Chromium-a brand in the chromium sector. Though there is had not been any gold production until the early 2000s in Turkey, 302 tons of gold have been produced in the last 18 years and Turkey has risen to the position of Europe's leading gold producer country with 27.1 tons of gold production in 2018.
In 2019, it is expected to set a historical record with a gold production of around 35 tons. Turkey's high mineral potential can be highlighted with more exploration/research activities. According to the available scientific data, onshore mining potential of our country is higher than that of hydrocarbons. Therefore, investing in Turkey's mining sector with much humbler budgets will create significant added economic value and considerably contribute to the reduction of mining related foreign trade deficit.
THE SECTOR MEETS TECHNOLOGY (BOLD AND STRONG STEPS)
Amelioration and reformation of the mining sector continues unabated by closely following the important developments globally with an understanding that it be integrated with the modern world. The e-Mining platform has been developed and implemented in order to complete the work and service transactions more quickly and accountably which have been manually handled at the General Directorate of Mining and Petroleum Affairs (MAPEG), the regulatory and supervisory body of the mining and petroleum sectors. In addition to expediting the processes and services with e-Maden, it is aimed to increase quality and transparency as well. The test studies for the commissioning of the project is still ongoing, while analysis, design and software studies has been completed. When e-Maden will be fully operational, more than 700 duties related to mining rights will be transferred to digital media. With the application of e-Maden, it is aimed to reduce the bureaucratic processes by performing them in digital environment.
Within the scope of safe mining, in order to prevent possible accidents, InSAR project has been initiated. With InSAR Project; landslides that may occur in open quarries will be predetermined with the use of satellite data. Possible accidents can be intervened in advance with this remote sensing system which can monitor the changes in centimeter scale. In addition to that, mining sites will be monitored in 3D with the numerical measurement data obtained within the scope of e-Maden. By providing a third dimension to the geomorphological data in the digital media, the positioning of underground galleries to each other will be analyzed and possible accidents will be prevented. Besides, error margin and time loss occurred during regular inspections will be reduced as well. At the same time, three-dimensional reserve models will be prepared with this system, preventing resource loss and providing more efficient operation in mines.
INTERNATIONAL STANDARDS, INTEGRATION AND FUNDING
Being one of the most demanding professions in the World with intense labor and high investment costs, mining provides the highest added value per unit capital, more employment and qualified investment compared to other service and industrial sectors. National Resources and Reserves Reporting Committee of Turkey (UMREK) has been established in order to institutionalize the mining sector, carry out mining activities in compliance with international standards and finance mining investments. The membership process to the Committee for Mineral Reserves International Reporting Standards (CRIRSCO) has been completed very quickly and successfully. In this context, UMREK has become CRIRSCO's 1st member in Eurasian region and 13th worldwide. Following the completion of the membership process, UMREK has immediately started certification of the competent persons (CPs) in the sector.
Being the 17th largest economy worldwide, with a GDP of USD 784 billion and a per capita income of USD 9.632, more than 65,000 foreign-owned companies operate in Turkey. By the contribution of a population of 32 million skilled labor force, Turkey exported USD167.9 billion in 2018. The mining sector has a 2.7% share in total exports with an export amount of USD 4.6 billion. With investments and activities to be carried out by taking into consideration, the revolutionary regulations and legislative changes made within the framework of the National Energy and Mining Policy, above mentioned mineral export figure can easily increase to USD 10 billion by 2023. On the other hand, Turkey has also taken important steps in order to continue its exploration and operation activities abroad. In this context, International Mining Exploration and Operation Company (UMAS) has been incorporated , under the umbrella of General Directorate of Mineral Research and Exploration (MTA) and acquired 5 different valuable mining concessions in total in Sudan and Uzbekistan consecutively.
PROVIDING BASIC INFORMATION AND DATA
Recently, important steps have been taken to ensure that mining activities are carried out in compliance with international standards. In order to provide investors with easy and reliable access to data and provide basic data related to country's geology researches quickly and accurately; Turkey's geochemical and geophysical maps have been prepared and published. Besides, a total of 2.5 million meters of core drilling was carried out in 2017 and 2018 to create a base for investors and to reveal basic information regarding mineral assets of Turkey.
To archive data and samples obtained during mining activities and make them available to investors and to ensure efficient use of mineral resources, “Turkey Geoscience Data and Core Information Bank of Turkey (TUVEK)” has been established and operationalized.
As in all fields, our country continues to take also many important steps in mining area with its visionary and innovative point of view and takes its place strongly and more proudly in the developing mining world. Rare Earth Elements Research Institute (NATEN) was established in July 2018 in order to provide necessary information for short, medium and long term policy and strategies about REEs and necessary scientific and financial infrastructure for researchers in different fields and to carry out R&D projects and other scientific studies in cooperation with public institutions and organizations.
REDUCTION OF RED TAPE AND ACCELERATION OF WORK AND SERVİCE PROCESSES
In order to enable investors to operate in a faster and safer manner; on behalf of mining investments made or planned to be made by public and private sectors, Mining Coordination Committee (MKK) has been established in order to monitor permitting processes, to ensure supervision and coordination, and to accelerate related processes, where all stakeholders associated with the sector have opportunity to meet around the same table. Moreover, One-Stop Office was initiated within the structure of MAPEG, which aims to closely follow critical medium and large-scale mining investments and to speed up and finalize bureaucratic processes rapidly from a single center. These steps will accelerate institutional processes for investors, saving both time and money.
BREAKTHROUGH IN SAFE MINING
For mines to be operated in a safer manner, number and, frequency quality of site inspections has dramatically increased. In 2018, 8.088 site inspections were conducted and in return, a 60% reduction in fatal accident rates was achieved.
As a result of “Risk Assessment and Risk Management for the Mines in Turkey” study, launched between MAPEG, General Directorate of Turkish Coal Enterprises (TKİ), Electricity Generation Company (EÜAŞ), Eti Maden, General Directorate of Turkish Hard Coal Authority (TTK) and İTÜNOVA within the scope of Safe Mining activities, “Risk Assessment and Risk Management” guides have been prepared. “Safety Culture in Mines (MAGUK)” project was initiated in order to ensure operational safety and minimize accidents in mines by strengthening the concept of “Safe Mining”.
In order to eliminate environmental problems, to ensure operational safety and to produce mineral reserves more efficiently, a revolutionary regulation related to the creation of “Mine Regions” has been enacted and stone quarry fields in Cebeci/ İstanbul have been merged as a first implementation of “Mine Regions” regulation. “Mine Workers Compulsory Personal Accident Insurance (ZFKS) Tariff and Instruction Communique” was prepared and put into effect in order to secure employees of mine sector. Studies have been initiated for the Personal Accident Insurance, which is currently covering solely the employees working in underground mines, and open quarry coal mines to cover all employees regardless of quarry and mine type.
ENCHANCED ECONOMIC GAINS
Within the scope of the National Energy and Mining Policy, many important gains have been achieved regarding mining sector. As a result of these gains, number of tenders, tender and royalty revenues have significantly increased. While 294 licenses were tendered in 2015, this number was increased to 1,218 and 1,248 in 2017 and 2018 consecutively and as such the inactive mining fields have been gained to economy. By the same token, revenues out of these mine tenders exceeded TRY 320 and 250 million in 2017 and 2018 respectively, compared to previous years. In parallel to these activities, with due legislative arrangements the idle mining sites have been revived and a significant growth in royalty revenues has been realized. For instance, while the overall turnover and government royalty revenue were TRY 20.4 billon and TRY 607 million respectively in 2015, the turnover increased to TRY 32 billion the government royalty augmented to TRY 1.300 billion in 2018.
Again within the scope of National Energy and Mining Policy; studies have been completed on new tendering models that will contribute to the increase of mining share in GDP and to reduce current account deficit by transforming our mining assets into high added value by/end products, and increasing facility establishment and employment.
In the first stage, tender specifications regarding Aluminum and Lime production were prepared and tender procedures for these end products were finalized. In addition to these studies, by/end production tender model studies for lead/zinc, chrome and iron minerals had been brought to the final stage.
In this context, the Technology Transfer Framework Protocol was signed for the establishment of a High Technology Boron Carbide Production Plant, of which ground breaking ceremony has been done recently, in order to turn the Boron mine into a high value-added product. Besides, Indigenous coal production, which was 88 million tons in 2017, rised to 101 million tons in 2018 and broke a historical record.
Again during this period, as a requirement of being a social state and cooperation with General Directorate of Social Aids, coal aids have been distributed all around Turkey to the families who were in need. Finally, as a result of the tenders made with the purpose of bringinghigh-potential coal fields which belonged to General Directorate of Turkish Hard Coal Authority (TTK) and General Directorate of Turkish Coal Enterprises (TKİ) to the economy, eight fields were transferred to private companies. With this transfer of the coal fields, 18.6 million tons of additional coal will be produced annually and there will be an import substitution effect above USD 1 billion per year.
IMPORTANCE OF GEOPOLITICAL LOCATION
Considering its mineral diversity and geopolitical location, Turkey is regarded as a high-potential country for mining industry. Turkey has completed its integration to international system with the important developments from early 2000's to today in highways, airways, rail systems and harbours.
Turkey outraced many Middle Eastern and European countries and reached to leader position with the international expanding particularly in the areas of seaport and airport operations. Turkey currently has a smelter with anode/cathode copper production capacity of 70,000 tons/ year, and 186,000 tons/year of low/high carbon ferrochrome production capacity smelters and many other ore enrichment facilities. Given high mineral potential and geopolitical advantages of our country, new tender models for by/end product production have been developed and implemented for further development of mining industry.
Especially, in order to pave the way for new investments and to operate existing investments more economically; amendments have been made in Mining Law, regarding various issues such as; state rights, forestry permit cost exemptions, right to develop proven reserves, and new incentives in addition to the incentives which had been enacted before.
NEW VISION IN EDUCATION AND TRAINING
Anatolia has raised many scientists like Straborn (Straborn of Amasya) a famous geographer who lived in Anatolia between 63-24 BC and recorded the first basic knowledge of Anatolian geology. Today, Anatolia continues to host many developments specific to mining and takes steps to convey those developments to the future. MAPEG Academy, established under MAPEG, is one of those steps including the modern world education concept.
Activities of MAPEG Academy, contributing to the development of mining sector with its fast and accurate training programs, non-stop continues. Moreover, Virtual Reality (VR) Training Program, which is prepared by using the most advanced technology in the world, has been implemented. Unlike non-mobile virtual reality applications, this training system provides mobile use and offers modular training under fast, reliable and realistic conditions. The “Coal Mines with Underground Timber Support “and “Mechanized Coal Mine” modules of the project, designed as an operational safety training, and examination platform through 24 different scenarios, have been completed. Development of the project is ongoing and the modules “Aggregate Quarry” and “Marble Quarry” are expected to be finalized in the first half of this year. Turkey has a qualified and young workforce especially in mining area.
NEW ECONOMIC PROGRAM
In addition to the ongoing studies, under the New Economic Program announced by Dr. Berat Albayrak, the Minister of Treasury and Finance, Turkiye Wealth Fund (TWF) will invest in Greenfield petrochemical, energy generation and mining projects from domestic resources alone or in cooperation with private sector, domestic or foreign, on PPP and/or IPO basis.
With these investments, the underground resources of our country will be gradually injected to economy. The exploration and drilling activities will steadily continue and the discovered resources/reserves will be brought to economy with new business models and financing mechanisms under the leadership of TWF.
As seen in Table 1 and Table 2, there is a current trade deficit of approximately USD 34 billion in energy sector (oil and gas) and approximately USD 25 billion in mining sector. With smart and attractive mechanisms to be set up by Turkiye Wealth Fund (TWF), petrochemical, energy generation from domestic sources, and mining projects are going to be funded on PPP and/ or IPO basis to reduce the current trade deficit in energy and mining areas to boost economy. It is self evident that the Indigenous and National policies set forth by the Honorable President of the Republic of Turkey Recep Tayyip Erdoğan, forms the foundation of all these initiatives and activities.
ITS YOUR TURN TO DISCOVER…
With its deep-rooted history, cultural wealth, natural beauties, and hospitable people, Turkey embraces all investors who will unleash its mineral potential. With its untapped mineral deposits, stable and safe investment environment, geopolitical position and proximity to regional markets, Turkey says, “I'm in!” to allure you.
Now, hold your breath, but don't hide your excitement. For the mineral deposits, waiting to be discovered with great excitement... Trustfully... Turkey...