Turkey has a rich and long history of mining and hosts some
of the world’s most complex geology, resulting
from the opening and closure of several paleo-oceans and the
amalgamation of continents with abundant magmatic, volcanic and
tectonic activity.
These geological events created a land mass with a diverse
array of minerals, although less favourable for oil and gas.
Despite not being one of wealthiest countries in terms of total
mineral reserves or production, Turkey is said to be around
tenth in the world for mineral diversity. It hosts 2.5% of the
world’s industrial minerals, 1% of its coal, 4% of
its marble and natural stone and about 0.6% of its metallic
mineral reserves. In addition, Turkey has over 70% of global
borates reserves and is set to become the largest producer of
natural soda ash in Europe by 2018. Yet much of the
country’s mineral wealth is considered untapped.
Most of eastern and southeastern Turkey is underexplored due to
the threat of terrorism in these areas since the
1980s.
 |
|
Turkey has a long history of mining,
but its fortunes as a mining nation
have waxed and waned in step with global conflicts,
mineral prices and
government policy. (Source: twak)
|
Turkey’s history of formal mining regulation
dates back to the mid-nineteenth century, during the time of
the Ottoman Empire. Records of mining legislation exist from
1858 and the number of regulations governing the sector
increased rapidly over the ensuing 50 years. More than 100
mining licences were awarded to local and foreign miners
between 1870 and 1899 and the country’s mineral
output doubled between 1900 and 1911 before declining
significantly during the First World War. After the
establishment of the Republic of Turkey in 1923, the country
decided to take steps to industrialise its mining sector. The
General Directorate of Mineral Research and Exploration was
established in 1935 and Turkey’s first modern
mining law (Law number: 6309) was passed in 1954. This was
revised by Law No: 3213 in 1985.
Today, mining and exploration in Turkey are regulated by the
following principal laws:
• Mining Law No. 3213, 15 June 1985 (amended in 2005 by
Law No. 5177 and in 2010 by Law No. 5995);
• Regulation on Mining Activity Permits, published in
Official Gazette No.25852, 21 June 2005;
• Regulation on the Implementation of Mining
Activities, published in Official Gazette No.27751, 6 November
2010;
• Amendment to the Mining Law No. 6592 (Amendment Law),
18 February 2015.
Ismet Kasapoglu, head of the mining council at The Union of
Chambers and Commodity Exchanges of Turkey, says that because
mining is a long-term business, there should be regulatory
stability in the sector. "Sometimes, the exploration phase can
be up to 10 years and operating phases can last up to 100
years. [Therefore], mining legislation must not be subject to
[frequent] changes."
Speaking earlier this year, Kasapoglu noted that the mining
law passed in 1954 stood for 31 years until it was replaced by
an updated version in 1985. "On the other hand, we had four
changes [to the mining] law in the last 10 years. That is an
indication that the government does not understand the mining
sector well enough," he said. Since Kasapoglu made these
comments, a further amendment to the Turkish mining law was
made on 18 February 2015, taking the number of revisions in the
last decade to five.
However, mining’s importance to
Turkey’s economic development is recognised by the
country’s government. According to a report by the
Ministry of Energy and Natural Resources of Turkey, mining has
the potential to generate employment twice that of the service
sector and 17 times more than the energy sector.
Some of the most significant changes in
Turkey’s mining law were made in 2010. The aims
were to bring the mining law in line with international
standards, offer incentives to attract more investors, and
protect licences from the licence traders and small scale and
artisanal miners.
The country’s exploration and exploitation
licencing regime was amended to ensure greater investment
commitment and sufficient professional and financial ability to
perform mining and exploration activities. Licencing became
stricter, with more details required to obtain exploration
rights. It is no longer possible to hold large areas under
licence in Turkey while conducting only minimal amounts of
exploration. These changes were made by the Regulation on the
Implementation of Mining Activities published on 6 November
2010 and were widely applauded by foreign investors, although
there were some complaints from domestic mining companies.
Because the amendment came at the same time as a significant
rise in the global gold price, a number of international mining
groups moved into the country following the passing of the
regulation.
 |
|
Capricious legislation from the Turkish
government has been
blamed for holding back the Turkey’s
mining sector (pictured:
Grand National Assembly of Turkey, Ankara.
Source: brewbooks)
|
The 2012 mining circular
Turkey’s mining industry was shaken
unexpectedly by the publication of a circular from the Prime
Minister, Recep Tayyip Erdogan, in July 2012. The official
circular (2012/15) stated that: "Public institutions and
organisations (except for municipalities and special provincial
administrations) and corporations in which more than 50% of
assets are publicly held must get permission from the Ministry
Office before selling, leasing, bartering, allocating and
transferring etc., any real-estate properties to any
institutions, organisations, foundations or associations."
Up until June 2012, licences for exploration and
exploitation of minerals had been issued by the General
Directorate of Mining Affairs under the Energy and Natural
Resources Ministry (as per the Mining Law No. 3213, subject to
additional permits where required, such as from the Forestry
and Water Affairs Ministries). Under the July 2012 circular,
there is now an extra step in the permitting process for mining
or exploration – gaining permission from the Prime
Minister’s office.
At first, the mining sector was unable to comprehend the
impact of this circular as there was insufficient detail on its
requirements and scope, but soon many licence applications
became stuck and several were refused at the level of the Prime
Minister’s office, without clear reasons being
given. Some operating licences were even cancelled as permits
were not issued on time, due to the delays caused by government
bureaucracy. Prior to the implementation of the new licencing
regime, the number of licences issued annually was about at
10,000. This number declined to 1,407 in 2012 and by 2013,
permitting had almost stalled, with just 84 licences being
issued.
The Deputy Chairman of the Republican People’s
Party (CHP), Umut Oran, stated in March 2014 that the number of
licence applications waiting to be approved by the Prime
Minister’s office had risen to 12,000 in the 640
days since the circular was announced. Normally, the permitting
process would have taken about 15 days for exploration licences
and up to two months for operating licences at the General
Directorate of Mining Affairs. But the country’s
mining sector has been paralysed as a result of the 2012
circular, which has had a knock on effect on other industries,
such as the mining services and mineral processing
sectors.
The head of Turkish Chamber of Mining Engineers, Mehmet
Torun, said in 2014 that mining permitting had "stalled
completely". "There has been no exploration licence issued for
a long time (…) The unemployment rate in the sector has
increased. The investments have been shifted to other sectors,"
he said, and called on the government to rectify the situation
as soon as possible.
The president of Turkish Miners Association, Mustafa Sonmez,
also speaking last year, said that the efforts of stakeholders
in the sector to find a solution to the problem had been
inconclusive. He added that the circular had scared off foreign
investors, who look for political stability and
well-established mining legislation that is free of
contradiction. When a circular like the 2012 law is passed
unexpectedly, investors naturally lose confidence in a
country.
The 2015 mining law
On 18 February 2015, an amendment to the mining law was
published in the Official Gazette under Law No. 6592, having
been approved by the Turkish Parliament and the
country’s president. It brought in some
comprehensive changes to mining regulation, the most important
of which were to the fees and securities regime, permitting
process, supervision of activities, royalties and the
cancellation of sanctions. Minerals containing radioactive
elements like uranium and thorium can now be licenced as
industrial raw materials. Unlike previous amendments, the
commission that drafted the February 2015 amendment involved
representatives of the mining sector, including the Union of
Aegean Mining Exporters, Turkish Marble, Natural Stone and the
Machinery Producers Union (TUMMER), Chambers of Geology and
Mining Engineers and the Union of Chambers and Commodity
Exchanges
of Turkey.
This broad consultation exercise reflects the Turkish
government’s intention to make the
country’s mining sector attractive to investors.
But industry participants have stressed that the most important
measure will be to make sure mining companies remain exempt
from the provisions of the 2012 circular. The chairman of the
Union of Aegean Mining Exporters, Arlan Eedinc Kaya, said
earlier this year that: "We, as the mining sector, expect that
circular by the Prime Ministry is abolished as soon as possible
(…) Exports of natural stone have dropped by 35%. This
shows the potential for further decreases [to levels below
those seen] during the 2008 global economic downturn".
Even after the latest amendment, it is still not clear
whether different government departments will collaborate
effectively in the implementation of the law in order to
streamline the mining and exploration activities in the
country. Regulations detailing the application of the law,
which were supposed to be released six months after the
announcement of the amendment in February, have yet to be
published and are unlikely to appear before a new government is
formed.
A general election in Turkey in May 2015 resulted in no
single party winning a majority and the leading parties were
unable to form a coalition. A second general election has been
scheduled for November 2015, but in the meantime,
Turkey’s mining sector looks set to remain in
limbo.