Kaltun: Feelers out for new feldspar markets

Kaltun mines all of its raw materials from its own mines in southwest Turkey (Source: Kaltun Mining)

Through its mining arm, the company is one the world’s largest miners of feldspar. It produces around 2m tpa of Turkey’s total feldspar output, which in 2014 stood at 5m tonnes, according to the US Geological Survey (USGS), while total world production reached 21.5m tonnes. 

It also produces around 150,000 tpa quartz and is the largest producer of ground and graded quartz in Turkey, in addition to 500 tpa mica from its Turkish mines, with most of its mica going into the paint industry.

Kaltun Mining conducts open pit mining at its own deposits in Turkey, with mines located in the Cine-Milas-Yatagan region – a richly mineralised area in the southwest of the country. As well as its Turkish business, Kaltun has four foreign companies based in Italy, Spain, Egypt (where it has further feldspar deposits) and the Netherlands.

Kaltun feldspar mine in Turkey (source: Kaltun Mining).

Kaltun’s minerals are primarily used to make ceramics – unglazed porcelain tiles, floor and wall tiles, glazes, sanitary ware and decorative porcelain – and in glass – float glass, container glass, table ware, crystal and some technical glass. Other markets it serves include filtration and enamel manufacturing.

The majority – around 80% – of Kaltun’s production is exported. In 2014, it exported 1.279m tonnes-worth of its 1.514m tonnes sold and expects sales to rise to over 2m tonnes by the end of this year. 

Its biggest geographical markets are in Europe, led by Italy and Spain, where it has milling and blending facilities to serve local customers, but the company also sells its material to more than 50 countries around the world, including the UAE, Japan and the US. 

"We see opportunities to expand our sales in Africa, Russia and the Middle East," Fikret Bayraktar, mining sales and marketing manager for Kaltun told IM. "The big multinational producers are focusing on the Middle East and Far East, which are also good markets for us." 

Bayraktar notes, however, that there are certain limitations, or conditions, to exporting Kaltun’s products further afield. "We produce very high quality material to overcome the freight cost deterrent for importers in more distant markets. We sell some material to the Far East, but again this has to be premium quality products, because we cannot compete with Chinese costs for standard grade material," he explains.

Kaltun is also expanding, in response to growing demand for new and higher qualities of the mineral products from its industrial customers, particularly feldspar. "We have just finished [implementing] our new crushing system to cover our output quantities, which increased dramatically from March 2015 at our Sarikisik plant," says Bayraktar.

"We have one plant under construction right now for preparing materials before milling quartz. We also we have a new project which will allow us to make different qualities of feldspar to meet the new demands of industry. We have already purchased the machines for this project and they are on their way to us. We plan to finalise this new plant at the end of 2015 and launch our new product in first quarter of 2016."

Turkey’s mining legislation

As one of Turkey’s most significant industrial mineral producers, Kaltun is keen to see the country’s government legislate favourably towards mining. With the country’s second general election this year due to take place in November, the company hopes that any change in the balance of government will make it easier to get mining licences. 

"Some companies have been waiting for over a year and a half to get permission for new projects," Bayraktar says.

In February 2015, several modifications to Turkey’s main mining law were announced by the country’s government. Among the amendments were measures to enforce the turnover of licences and prevent land being under-exploited due to inactive rights holders; auctions of mineral rights and efforts to better define licence areas according to mineralisation; and a new royalty framework, which sets taxes according to mineral prices.

Bayraktar is not however convinced that the changes will make things easier for mining companies in Turkey to run their businesses. "The main difficulty that the companies will face with the new mining law is that time, charges and environmental fees to be paid for the period of study [on mineral deposits] is much higher than the expected rates," he said. 

"In addition to this, although not yet certain – this will become clearer with the new regulation – the number of mining engineers [required] to be employed as technical supervisors at sites is going to be another burden. Previously, one mining engineer could be responsible for five mining sites, but with the new law, according to the draft regulation, this number is limited to be three sites if the sites are next to each other. If the sites are in different areas, then the technical supervisor will be responsible of only one site. This will obviously lead to a big increase in costs."

Kaltun’s main concern, however, rather than the new mining law, is obtaining forestry permits. "The permits which previously were given by the Ministry of Forestry and Water Affairs are now given only with the permission of Prime Ministry [as per the July 2012 circular (2012/15)].  This has caused companies come to a standstill. We think that, consequently in the near future, many mining companies will end up stopping their activities altogether, purely because of this difficulty," Bayraktar says.

Market outlook

Notwithstanding the challenging and uncertain regulatory climate in which it operates, Kaltun is generally positive about consumption of raw materials in its main markets of ceramics, glass, engineered stone and coatings. "We expect some growth, especially in glass and coatings sectors," Says Bayraktar. "Because Kaltun is a very new actor in these markets, especially in the coatings ındustry, there are still some opportunities for us to grow. We are planning to expand in the ceramic tile industry by reaching alternative markets. We are still studying the logistical solutions for reaching these markets and we are sure that we will be able to start shipments to these areas at the start of 2016."

As far as pricing and demand for its minerals go, Kaltun is realistic about the market’s chief influences and driving forces, but believes that change is in store in the foreseeable future. Chinese competition sets the rules for prices and competition in the global mining industry, and Turkey is no exception, yet this is undergoing a shift according to Bayraktar. "In 10 years from now, China will be a major market, as will India. Then, we will all be working for China and India to produce goods for these countries, rather than them selling us their raw materials".

Kaltun is also unconcerned about many of the issues worrying its peers, such as the availability of skilled labour, rising costs and growing Chinese competition. "We do not worry about these kinds of things," says Bayraktar. "We always took the necessary steps when it was necessary to do so, and we will do the same again if or when they become necessary again."

Kaltun’s mining history

Turkey’s first feldspar mine was established by Mehmet Tuncer, one of the Kaltun’s founding partners, in 1962. In Turkey, feldspar had previously been used only as molding sand, but following Kaltun’s establishment commercial feldspar production, the mineral began to be used as a ceramic raw material in Canakkale Ceramic Factories. The company was also instrumental in introducing feldspar to Turkey’s glass industry. 

Today, the group mainly deals with the production and trading of industrial raw materials with 19 production units functioning to produce sodium feldspar, potassium feldspar, quartz and mica to be used by the manufacturers of ceramics, glass, composite stone, porcelain, coatings and many other applications.   

Kaltun Mining accounts for approximately 35% of Turkish exports of sodium feldspar.

Turkish feldspar

Turkey is the largest feldspar supplier country in the world. According to the USGS, the company produced 5m tonnes of the mineral in 2014, followed by Italy, which produced 4.7m tonnes. Total world production last year stood at 21.5m tonnes.

Quarries supplying a range of sodium, potassium, calcium feldspars are mainly located in the western part of Turkey, in the southern part of the Menderes Massif, or the Cine Sub-Massif. 

According to Turkish estimates, the country’s feldspar reserves are estimated to be around 400-450m tonnes. At the current rate of production, the Menderes Massif could supply feldspar for more than 100 years.

The deposits of greatest economic interest are located in the areas around Cine and Milas in the Menderes Massif.

According to the USGS, 33% of all the feldspar imported into the US is sourced from Turkey, second only to Mexico, which supplies 50% of US demand.