Developments in the mining sector in Turkey

1 Economic development in Turkey

Despite considerable economic and export growth, the economic situation in Turkey does not seem to be improving. Factors contributing to this are a high inflation rate, a weak currency and increasing deterioration of the country’s foreign trade balance. The collapse of the Turkish lira has now taken on huge proportions. On the introduction of the new Turkish lira in January 2005, the exchange rate against the US dollar was still 1.35 lira/US$ or 0.74 US$/lira. Up to today, the exchange rate has fallen to 0.05 US$/lira (Fig. 1). That is for one dollar, you can currently get around 20 Turkish lira. As a consequence, exports have become cheaper, but the costs of buying raw materials and machines, on which the Turkish economy depends, have become extremely expensive, leading to a foreign trade deficit of almost US$ 110 bill. in 2022.

2 Introduction to the mining industry

Turkey is rich in mineral resources. Mining in Turkey is regulated by the Ministry for Energy and Natural Resources (MENR). More than 50 different metals and mineral resources are extracted, including gold, silver, copper, cobalt, lead, chromium, nickel, molybdenum and minerals like boron, feldspar, magnesite and soda, but also coal, uranium and recently also rare earths and lithium are also mined. Especially for the minerals boron, feldspar and soda, the country has a leading position in the world. For the extraction of lignite, the country is the third largest producer behind China and Germany. According to official figures, there are now more than 750 foreign mining companies with bases in Turkey and most are actively operating. In 2020, the mining sector attracted direct foreign investment totalling US$ 132 mill.

In recent years, the importance of the mining sector in Turkey has increased, which is also clear evidenced by its share in the GDP growing to 1.2 %. In 2022, according to TURKSTAT (Turkish Statistics Institute), mining products to a value of US$ 4.622 bill. were exported, that corresponds to 1.8 % of Turkey’s total exports and a considerable increase of 13.9 % on the previous year. The young, dynamic and well-qualified employees in the country make up a high-calibre labour pool. In Turkey, there are numerous departments for mining engineering at the universities. The number of mining engineers has increased by more than 50 % since 2005 and now reaches almost 39 000. Further advantages are low logistic and exploration costs, the proximity to key markets, lucrative government incentives and competitive tax rates.

3 Coal industry

The use of domestic coal reserves for power supply is a key goal in the Turkish energy policy, contrary to the phase-out of fossil fuels called for elsewhere. Coal still accounts for one third of the country’s consumption of primary energy. Fig. 2 and Fig. 3 show Turkey’s coal production and coal consumption over the last few years. After declines of 8.4 % in the Covid year 2020, the quantities have picked up again significantly. In 2021, around 94 million tonnes per annum (Mta) coal were produced. The lignite share in this is 96.5 %. Hard coal accounts for 1.8 % and asphaltite (solid bitumen) for 1.7 %. The coal production levels, however, are not sufficient to cover the annual coal demand. Around 20 to 25 Mta imports of hard coal are needed every year.

The largest quantities go into the power plant industry. Of the power plant capacity of 101.8 GW installed in 2022, coal-fired power plants account for 21.1 GW (20.7 %). Lignite power plants (Fig. 4) account for around 54 %, and hard coal 46 %. An increase in coal-fired power plants can currently be observed. In 2022, a new 1300-MW power plant, which is fired with imported coal, went into operation. Up to 2035, according to the MENR’s national energy plan, the capacity of coal-fired power plants is set to be increased to 24.3 GW, however, with a decreasing percentage overall. Fig. 5 shows the Iskenderum 2 x 660 MW coal-fired plant, which went into operation in 2003 and was built by the German company STEAG Power. The power plant is fired exclusively with imported hard coal.

TKI (Türkiye Kömür İŞletmeleri Kurumu or Turkish Coal Enterprises) is the biggest player in the Turkish lignite sector. The company is state-owned and has three lignite coal-mining fields in Southeast Anatolia (Aegean Lignite, Çan Lignite, West Lignite), which sold a total of 22.8 Mta lignite in 2022. Around 2/3 of the lignite come from surface mining, 1/3 from underground mining. Another prominent lignite producer is EÜAŞ (Elektrik Üretim A.Ş), which produces lignite to cover its own demand in its power plants and is also state-owned. Most of the lignite is now produced by privately owned companies like Koç Holding. For hard coal, the situation is different. TTK (Türkiye TaŞkömürü Kurumu or Turkish Hard Coal Enterprises) has practically a monopoly. Hard coal is extracted underground in Turkey, with mining accidents involving multiple fatalities hitting the headlines time and again.

4 Metallic resources

4.1 Gold ores

Turkey is one of the largest consumers of gold. In 2020 alone, 438 t were imported, which corresponds to 10 % of global mine production. The country, however, is rich in its own resources, but gold production in Turkey only really started up in 2021. Since then, 453 t gold have been produced in Turkey. Fig. 6 shows the production figures for the last few years. In 2022, the country is again far away from the goal of the Turkish government to produce around 100 t annually. A good overview of the ore deposits and mining projects is given in [1]. Fig. 7 provides a classification of existing mines by their size. With the two mines Kişladağ and Çöpler, there are two of the worldwide largest gold mines with proven reserves of 17 MOz or 10 MOz. But also in the class of 1 to 10 MOz, Turkey now has 18 mines, and another new mine is announced annually.

The most important producers in Turkey currently include Koza Altın İŞletmeleri A.Ş, Eldorado Gold and SSR Mining or Anagold. Koza Altın İŞletmeleri operates 7 gold mines in Turkey. Three of the largest are the Çukuralan, Kaymaz and Ovaçik mines. In 2021, the company produced more than 270 kOz gold. Eldorado Gold from Canada operates the Kişladağ Goldmine (Fig. 8). It is a surface mine with relatively low gold content in the ore so that considerable expenditure is needed for grinding and screening the ore. Gold extraction is based on the heap-leach process. In 2022, 135.8 kOz gold was extracted there, after 174.4 kOz in 2021. The biggest quantities were actually extracted by Anagold in the Çöpler-Mine. Anagold is an 80/20 joint venture (JV) of the Canadian SSR Mining and Lidya Madencilik. On account of a necessary break in operations, in 2022 only 191 kOz were extracted, compared with 329 kOz in 2021 and 391 kOz in 2019.

Besides Eldorado Gold and SSR Mining, other international mining companies are active in gold mining in Turkey. These include the Canadian companies Alamos Gold, Centerra Gold and Teck Resources. Alamos has three development projects in Kirazlı, Ağı Dağı and Camyurt, Centerra operates the Öksüt Goldmine with a production of 112 kOz in 2021. Teck Resources and JV partner Liberty Gold sold their Halilağa-Mine to Cengiz Holding in 2023. The new Turkish investors also include Özaltın Holding, which took over Zenit Madencilik A.Ş in 2021. Zenit has pushed ahead with the Kızıltepe Gold-Silver Mine Project (Fig. 9). Moreover, the construction phase for the Kütahya-Tavşanlı Gold-Silver Project has started. Özaltın also has the majority shares in Pontid Madencilik, which is realizing two gold-copper projects.

4.2 Chromium ores

With a chromium content of up to 46 %, chromite is the only ore mineral from which chromium can be extracted. Chromium is used primarily for the production of stainless steels and refinement of surfaces. Interesting is that there is no substitute for chromium in stainless steels. From chromite, HC (High-Carbon) FeCr with a chromium content of 65 % is produced in smelting furnaces. Worldwide, Turkey has advanced to become the third-largest supplier. Fig. 10 shows the worldwide production figures for chromium ore in recent years, which totalled around 35.1 Mta at the last count [2]. In 2021, with a production volume of 2.779 Mta, Turkey achieved a market share of 7.9 %. Leading supplier here is South Africa with a production volume of 18.435 Mta and a share of 52.3 %, ahead of Kazakhstan with 6.192 Mta and 17.6 %. India (7.3 %) and Finland (3.3 %) were the other frontrunners.

Leading chromium producer in Turkey is Eti Krom Mining, which is part of the Yilmaden Mining Group belonging to Yildirim. Eti Krom has a chromium capacity from the Elaziğ Mine (Fig. 11) of 1.0 Mta and a HC FeCr capacity of 0.165 Mta. HC FeCr is not produced in Turkey otherwise. Eti Krom has over 130 Mt in chromite reserves and is in possession of 22 mining licences at different locations in Turkey (21 underground and 1 surface mine). The company is currently working on a feasibility study for the Adana-Aladağ project, which promises another 130 Mta chromite resources. With subsidiaries in Russa and Kazakhstan, the Yılmaden Holding reaches a worldwide 2.5 Mta chromite capacity and 0.55 Mta HC FeCr capacity. There is only little information on the other chromium producers in Turkey. One of the companies is Koyunoğlu Mining, with two relatively small mines in Erdemli and Fındıkpınarı.

4.3 Other metal ores

In Turkey, there are numerous mines in which besides gold and silver, other metals are extracted. One such mine is that owned by Polimetal Madencilik, a 50/50 JV of Lidya Madencilik and Alacer. There, oxide ores are to be extracted by means of the heap-leach process for extracting gold and silver. In addition, sulphite ores will be mined for the extraction of copper and zinc by means of flotation. The processing plant is currently under construction. In Zenit’s Kiziltepe Mine, silver is already extracted alongside gold. Esan Mining, which belongs to Eczacıbaşı Holding A.Ş, produces mainly lead and zinc at its Balya-Polimetall Mine. In 2020, 0.135 Mta lead and zinc concentrate was produced by means of flotation (Fig. 12). At its Çayeli Mine, the Canadian company First Quantum produces mainly copper and zinc. The quantities are so small, however, that they don’t factor in international comparison.

5 Mineral resources

5.1 Boron minerals

According to USGS figures, with a total of 1.2 bill. t, Turkey has around 73 % of the global boron reserves, on the basis of boron trioxide (B₂O₃). Russia and the USA shared the second places with 40 mill. Tincal and colemanite are the most common boron minerals in Turkey. The tincal deposits are found in Eskişehir-Kırka. Colemanite mines are located in Kütahya-Emet, Balıkesir-Bigadiç and Bursa-Kestelek. Fig. 13 shows Turkey’s leading position in the worldwide production of boron minerals. Boron trioxide is used in the field as a fluxing agent and component in ceramics, enamel and glasses (borosilicate glass). It is also used in numerous other applications, for example in hygiene products, as fertilizer or as fire-extinguishing agent for metal fires. Around 50 % now goes into the glass industry. The B₂O₃ content of borosilicate glass is usually 12 to 13 %

Eti Maden is a Turkish state-owned company of the Türkiye Wealth Fund, which has a monopoly in the extraction and processing of boron minerals in Turkey. With a quantity of 2.63 Mta refined boron products, its worldwide market share was around 62 % in 2021. The company operates four mines: Bigadic, Emet, Kestelek and Kirka and has a mine production capacity of 5.5 Mta. Further processing is done mainly in the refineries of Kirka (Fig. 14) and Bandirma. Eti Maden exports its products worldwide to more than 100 countries. The export share totals 96 %. Recently, Eti Maden has also become a talking point with two projects for the production of lithium and rare earth metals. In 2020, a factory was opened for the production of 700 t/a lithium carbonate. Next to this, in Beylikahır, a pilot plant is under construction for the production of rare earth elements.

5.2 Feldspar and soda

The group of feldspar minerals is very prevalent worldwide, half of the minerals in the earth’s crust contains these. With detected reserves of 250 mill. t, Turkey holds over 15 % of the worldwide known feldspar resources. At the same time, Turkey is a world leader in the production of feldspar minerals (Fig. 15) with a production quantity of 12 937 Mta most recently and a global market share of 37.7 % [2]. Other frontrunners are India (market share 12.5 %), Iran (9.3 %), China (7.6 %) and Italy (6.4 %). Feldspar is used primarily for the production of glass, ceramic tiles and insulators for high-voltage power lines. In the firing of porcelain, feldspar is used as a fluxing agent to reduce the melting temperature. Sodium carbonate (soda) is also used as a fluxing agent in glass production.

The leading producers of feldspar in Turkey are Kaltun Madencilik, Esan Eczacıbaşı and Straton Maden. Kaltun Madencilik is one of the biggest mining companies in Turkey (Fig. 16). In 2021, 2.546 Mta sodium feldspar was produced, compared with 1.605 Mta in 2020. Around 90 % of these are exported. Other products are potassium feldspar, mica and quartz. Esan Eczacıbaşı achieves in its mines similarly high mined feldspar quantities and reports that it generated 34 % of the Turkish feldspar exports in 2021. Straton Maden, which belongs to Global Investment Holdings, extracted a total of 0.538 Mta feldspar from the mines in the region of the western Aegean in 2021. The company has a capacity of 1.0 Mta, but is in the process of considerably increasing capacities and product range for feldspar with two new mining licences.

Behind the USA, Turkey is the second largest producer of soda in the world. The raw material is also used as a fluxing agent in the glass industry; in addition, there are numerous other applications in a wide range of industry sectors. Almost the entire quantity in Turkey is produced by West East (WE) Soda. The company consists of Kazan Soda and Eti Soda, which both have production sites (Fig. 17) near Ankara. The resources of evaporite mineral detected there, which is a starting material for soda production, ranges at 1.63 bill. t. in the Sincan Region and 0.245 mill. t in the Beypazan region. In 2021, Kazan Soda produced 2.713 Mta soda and 0.187 Mta sodium bicarbonate. Eti Soda reaches somewhat lower quantities with 1.735 Mta soda and 0.215 Mta sodium bicarbonate. In addition, with Ciner Resources, WE Soda has a production site in the USA.

5.3 Magnesite

Magnesite is a mineral resource for magnesium production and the production of glass and refractory porcelain and bricks. For high-temperature processes above 1200 °C, it is essential as refractory material in kilns and melting furnaces in steel, NF metal, cement and glass production. Turkey is one of the most important production countries (Fig. 18). In 2020, 1.560 Mta magnesite was produced, after 3.258 Mta only in 2016. That corresponds to second place in the worldwide ranking. The worldwide leader by far is China with a production quantity of around 19.0 Mta and a market share of 67.2 %, ahead of Turkey and Brazil (each with 5.5 %), Russia (4.5 %) and Austria (2.9 %). Turkey has mainly reserves of cryptocrystalline magnesite. This material has higher purity than macrocrystalline magnesite. The deposits are generally smaller and have a lower ore yield, which makes extraction more expensive [4].

Leading company in Turkey for magnesite and the production of different refractory products like DBM (Dead Burned Magnesia), FM (Fused Magnesia) and CCM (Caustic Calcined Magnesia) is Kümaş Manyezit Sanayi A.Ş. With 160 mill. t, the company has over 40 % of the reserves of cryptocrystalline magnesite in Turkey and 20 % worldwide. At the Kütahya-Eskişehir site (Fig. 19), the magnesia production capacity is over 0.4 Mta. On account of its strategic importance, Kümaş was taken over by the steel company Erdemir in 2021, which is part of the OYAK Group. With the takeover, the acquisition of Kümaş by the international refractories company RHI Magnesita was prevented. RHI also produces magnesite in Turkey. Other smaller producers of magnesite in Turkey are Akdeniz Mineral Kaynaklari A.Ş, Grecian Magnesite S.A., which is headquartered in Greece, Madkim, MKM and Tecnodieci.

6 Outlook

The future of the Turkish mining industry is difficult to predict at present. On the one hand, that is down to the critical economic situation, the shortage of money in the country and, on the other hand, to relatively low foreign investment in the mining industry. This has led, for instance, to the production development for gold being well under expectations. Similar problems are encountered where Turkish companies hold a monopoly.