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REPUBLIC OF TURKEY PRIME MINISTRY

Investment Support and Promotion Agency of Turkey

TURKISH MINING INDUSTRY REPORT

JULY 2010 DECEMBER 2009

CONTENTS
1. 2. 2.1 2.2 2.2.1 2.2.2 2.2.3 2.3 2.4 2.5 2.6 2.7 Executive Summary Sector Overview Global Sector Domestic Sector Overview Major Mining Commodities Main Players in Turkey Positioning Map SWOT Analysis Investment Opportunities Sector Establishments and Institutions Appendix 3 4 4 8 8 10 16 17 18 19 21 22 23 24

LIST OF FIGURES ABBREVIATIONS

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accounting for 50 percent of Turkey’s total mining exports. pumice. calcite and trona 2 reserves. Turkey holds 2. boron reserves are mainly found in Russia and the US.9 billion in 2002 to USD 10. As part of the EU membership accession negotiations. China is the most significant importer of Turkish 4 mining products: 39 percent of the total exports in 2009. reaching TRY 2. Ranking 28 in global mining th production. Marble and natural stones have the largest share. The country holds considerable amounts of marble and natural stones. the sector is likely to grow further. followed by RT Borax with 35 percent. 33 percent of global marble reserves. SME’s are dominant in the marble sector in Turkey as opposed to large scale manufacturers and the sector is mainly composed of privately held companies. 72 percent of global boron reserves. Another rich mineral reserve in Turkey is marble.2 billion in 2008.2 1 – 4. Eti Maden supplied 37 percent of global boron 3 demand in 2009. feldspar. Boron Sector Report. 20 percent of global bentonite reserves and more than half of the global pearlite reserves.9 percent share in the total industry during the past five years. With the regulatory changes. Executive Summary The Turkish mining sector achieved a remarkable CAGR of 32.78 billion in 2008. pearlite. Balikesir and Kutahya . Apart from Turkey. both local and foreign investments have increased each passing year. however. Mines and Minerals Report 2010 Ministry of Energy and Natural Resources (ETKB) Eti Maden. with revenues that rose from USD 1. followed by the US with 9 percent of the total.45 billion in 2009 due to the global economic crisis and slow down in the manufacturing industry.2 billion in 2009. bentonite. considerable production th capacity and geographical advantages for transportation and shipping. and are expected to continue growing in the coming years. 3 1 2 3 4 Export Promotion Center (IGEME).24 billion in 2008.5 percent of the global industrial minerals reserves. Marble reserves in Turkey amount to 3. boron minerals. all in Western Anatolia. 2009 General Secretariat of Istanbul Mineral and Metals Exporters’ Association (IMMIB) 3 . Turkey is an important player in the international market due to its wealth of reserves. Turkey also ranks 10 by variety of mines and minerals. Turkey’s exports reached USD 3. mining being one of them. chrome. and mainly exports these products. Eskisehir and Bilecik.5 percent.1 percent between 2002 and 2008. Balikesir. Boron reserves in Turkey are mainly found near 1 Eskisehir. incentives offered. The sector’s share in Turkey’s GDP ranged between 1 and 1. reaching a 4.201 million tons in 2009.8 billion m which 2 constitute approximately 33 percent of the total global marble reserves. The majority of the natural stone reserves including marble are found in the Western Anatolian provinces of Afyon. Copper and chromium also constitute an important part and are followed by feldspar and boron. together with the implementation of advanced mining technologies. Mugla. the government started intense studies for liberalization and privatization in several industries. There was a modest decline to USD 9. These figures are low compared with the sector’s importance. Boron is the richest reserve found in Turkey: the 866 million tons of reserves of B2O3 comprise approximately 72 percent of the total global reserves of 1.1. This figure declined to USD 2. with the recovering economy and the increasing capacity of the manufacturing industry. and reduced bureaucratic processes for obtaining mining licenses.

it is important to note that the industry is highly sensitive to global macroeconomic trends. The top ten largest mining companies and their last twelve months (LTM) revenues are listed below. their values dropping around 60-70 6 percent during the period July 2008-June 2009. Consequently. In addition. Figure 1 – Global Main Players Global Main Players Company Name Rio Tinto Ltd. However. Many of the most significant mines are in the hands of very large.801 12. BHP Billiton. the UK. Freeport-McMoRan Copper & Gold Inc. 2.357 27.360 45.1 Sector Overview Global Sector The mining sector is one of the main pillars of the global economy for it acts as the initial supplier to a wide range of industries. Inc. Copper and aluminium were among the commodities most drastically affected. Several of these companies – including Rio Tinto Ltd. Vale S. Consequently. together they currently generate around USD 303 billion in annual revenues.2. the mining industry is also starting to rebound.858 19. The reason why small-scale companies do not play an important role in this sector is the high amount of initial capital costs required to operate mines.are headquartered in London. and Anglo American among the 5 top ten . Australia United Kingdom. the recession caused – as it did for many other industries – the mining sector to experience substantial financial distress. Xstrata plc Anglo American plc Alcoa. BHP Billiton Ltd.115 21. Aluminum Corporation Of China Limited Norsk Hydro ASA Shenhua Group Corporation Limited * Latest data f ound LTM: Last Twelv e Months Source: Capital IQ Headquarters United Kingdom.099 LTM Date Dec-31-2009 Dec-31-2009 Mar-31-2010 Dec-31-2009 Dec-31-2009 Mar-31-2010 Mar-31-2010 Mar-31-2010 Mar-31-2010 * Despite the sector’s several attractions described above.179 16.606 11. the sector was badly hit by the global crisis which arose in 2008 and triggered rapid contraction in industrial production. as the global economy has been recovering from the recession. often publicly-listed corporations with strong government connections.428 22.732 20. Australia Brazil Sw itzerland United Kingdom United States United States China Norw ay China LTM Revenue (million USD) 106. the sector also provides financial investors with attractive investment opportunities since its products are traded commodities. 5 6 CapitalIQ London Metal Exchange (LME) 4 .A. the prices of these products also fell. All of them are publicly traded. As the demand from industrial organizations for mining products declined due to the recession.

respectively. 9. 16%. 13% 40%. Argentina. The reason behind the high 7 demand for these minerals is their crucial role in the construction and manufacturing industries. Iron ore.Regional Overviews: Antarctica is the only country which banned the exploitation and exploration of minerals in 1991. United States Turkey.400 2 21 11.000 2009e 36. Australia and China. Figure 3 – World Mineral Production World Mineral Production in Thousand Tons 2008 Aluminum Boron Chromium Copper Gold Silver Zinc Feldspar Pumice Nickel Iron Ore 39. Figure 2 – Main Minerals and Their Countries of Extraction 7 Main Minerals and Their Countries of Extraction Mineral Aluminum Boron Chromium Copper Gold Silver Zinc Feldspar Pumice Nickel Iron Ore Country China. China China. among other countries.000 4. 13% 37%. including the principal Turkish products.350 23. 8. Peru China.10%. Geological Survey (USGS) 5 .900 4.430 2. 9. Chile South Africa. is 8 largely controlled by China with a production share of around 37 percent.750 2.800 2 21 11.000 15. Brazil. The table below summarizes some of the minerals produced and the countries where they are extracted from. As seen in the table. followed by aluminium and chromium with 37 and 23 million tons. 6. Mexico. India.600 21. 13%. Australia China.500 23.800 15.100 18. Russia.S. 21%. 12% 29%. Italy. Australia 2008 Production Share 33%. Kazakhstan Chile.8% 45%.2% 12%. 8.300 1.000 Source: Mineral Commodity Summaries 2010 USGS 7 8 Australian Antarctic Division U. Australia Turkey.220. Greece Russia.1% 20%.7%. with 2. The rest of the countries are active players in the global mineral industry.5% 17%. Canada. 13% 27%. United States. Italy. iron ore constitutes the largest share in production. China Turkey. Peru. 11% 17%.900 19.300. where the emphasis is with the United States.3 billion tons in 2009.600 1.5%. United States. Canada. 9. 18%. 15%. 16%.900 19. 15% Source: Mineral Commodity Summaries 2010 Major commodities: The table below lists some major commodities and their production in thousand metric tons during 2008 and 2009. 15%. Australia Peru. 16%. which is by far the largest ore extraction in the industry. 15% 34%.

Germany.5% 37. However. 2010. iron ore prices dropped around 30 percent in 2009.9% 15. South Korea and Italy follow China as 9 the next four largest importers of iron ore. and the industry is expected to bring revenues of around USD 172 billion.Iron Ore: Global iron ore production had been showing an upward trend until it was hit by the recession in 2009. 9 up from USD 90 billion in 2009.1% 4. Countries such as Australia. Mineral Commodity Summaries According to an IBISWorld Iron Ore Mining Global Industry Report published on April 28.364 126. Canada and South Africa are the major iron ore exporting countries: their exports in 2008 summed to USD 53 billion.1% Source: IBISWorld Global Iron Ore Industry Report 2010 Source: USGS. China is by far the largest importer of iron ore with USD 59 billion imported in 2008.3% 8.0% China Brazil Australia India Russia Other 37. Due to the sharp decline in demand for steel products. more than the amount exported by the five countries listed above.4% 16.992 -29% 29% 61% 80% 60% 40% 20% 0% -20% -40% Global Iron Ore Production by Country 17. Brazil.3% 24. Figure 4 – Global Iron Ore Revenues & Production by Country Global Iron Ore Revenues (million USD) 140000 120000 100000 80000 60000 40000 20000 0 2006 2007 2008 Growth Rate 2009 Industry Revenue 60. 2008 21.000 people.7% 3. a large percentage of the market share for iron ore mining is divided among 100 enterprises employing around 110.892 78. out of the total global exports of USD 67 billion. Japan. this situation turned around in 2010.200 89.6% 4. Figure 5 – Major Iron Ore Exporting Countries Major Iron Ore Exporting Countries. India.5% Australia Brazil India Canada South Africa Other Source: IBISWorld Global Iron Ore Industry Report 2010 9 IBISWorld Global Iron Ore Industry Report 6 .5% 9.

followed by Russia and Canada. The total world production of chromium in 2009 was 23 million tons and China was listed as the largest importer of the metal. is an important input for stainless steel production. with production shares of 40 percent. The mining of this metal is mainly divided among three countries. China is by far the largest producer of aluminium with 13 million metric tons produced in 2009. packaging. India and Kazakhstan. Aluminium is widely used in transportation. The demand for aluminium. Mineral Commodity Summaries 2010 7 . and 22 percent. and construction industries with industry 10 consumption shares of 26 percent. respectively. South Africa. As observed from the figure below. the third most widely produced metal in the world. 11 in line with the increase in Chinese stainless steel production. 16 percent and 15 percent. 22 percent. aluminium is the second most widely mined metal in the world with 37 million tons produced in 2009. respectively.Aluminium: After iron ore. 10 11 World Bureau of Metal Statistics USGS. declined in 2009 due to the global economic crisis. Figure 6 – Global Aluminium Production – Geographic Spread Major Aluminum Producing Countries 7% 9% China Russia 13% 57% 14% Canada Australia United States Source: WBMS Chromium: Chromium. The two latter countries also constitute about 75 percent of 10 the total global aluminium imports. and consequently its price.

800 3.1 Domestic Sector Overview Mining industry revenues increased with a CAGR of 32. Mines and Minerals Report 2010 Ministry of Energy and Natural Resources (ETKB) 8 % in GDP .000 130.500 types of metallic and 2.000* 6.105 million USD 8. pumice.210 10% 9% 8% 7% 6% 5% 4% 3% 2% 1% 0% Mining Sector Revenues Source: General Directorate of Mining Affairs % in GDP Turkey maintains a wide spectrum of mines and minerals and has considerable reserves. boron. copper.166 9. 20 percent of global 13 bentonite reserves and more than half of global pearlite reserves.000 0 2002 2003 2004 2005 2006 2007 2008 2009 1.000 3.000 25.4% 1.1 percent between 2002 and 2008 and constituted approximately 1 . while the surplus is exported. feldspar and pumice.5 82.999 5. 33 percent of global marble reserves.1% 1.172 10.1.2 2. chrome.000.450 0.613 2. boron minerals.000 10.263* 4.5 percent of Turkey’s GDP.100 6. Marble and natural stones. there has been an important increase in the exploration and mining of metallic ores such as gold. pearlite. Among these. Turkey holds 2.800. reaching USD 10. calcite and trona reserves are the most significant.916 2.1% 3.000 4. Turkey has 3. The minerals mined out of these deposits are used as raw materials in the 14 manufacturing industry. then falling slightly to USD 12 9. In addition. Figure 7 – Turkey Mining Industry Revenues Mining Industry Revenues 12. Turkey’s main exports are marble and natural stones.2.5% 5.000* 866.2 billion in 2009. chrome.587 1. 72 percent of global boron reserves.2 billion in 2008. feldspar.000 6. silver. chrome and manganese.000 1.700 Reserves (000 tons) 3.4% 1.01 4. Export Promotion Center 12 13 14 General Directorate of Mining Affairs (MIGEM) Export Promotion Center (IGEME).2% 1.214 6. Figure 8 – Major Turkish Mining Products Major Turkish Mining Products 2008 Production (000 tons) Marble Boron Chromium Feldspar Pumice Gold Iron ore * Values in 000 m3 2.2% 1.000 8.2% 1. bentonite.2.000 types of mineral deposits.500 Source: Ministry of Energy and Natural Resources.5 percent of the global industrial mineral reserves.

the UK. amounting to half of Turkey’s total mining exports in 2009. the USA. Figure 9 – Turkish Mining Export Shares by Product . Figure 10 – Country Based Exports in 2009 Country Based Exports in 2009 Country China USA Italy India England Saudi Arabia Russia Other Total Source: Export Promotion Center Amount (million USD) 954 217 76 61 60 47 45 985 2. Italy. Turkey’s geographical location allows the export of mining products at a relatively low cost. In 2009.45 billion worth of mining products.2009 Mining Export Shares by Product . Besides the investments and changes in the economy. Turkish mining exports achieved a CAGR of 28.6 percent from 2005 to 2008 and amounted to USD 3. India. exports declined due to the global economic crisis and Turkey exported USD 2.With the liberalization and privatization of the industry and the incentives granted by the government in recent years. Also the demand for raw materials and metals used in the manufacturing industry rose due to the recovery trend in the global economy.2009 19% 4% 4% 11% 12% Marble Copper Chromium Feldspar Boron Others 50% Source: General Directorate of Mining Affairs China. both local and foreign investments increased. Saudi Arabia and Russia are the most important customers for Turkish 15 mining products.445 15 16 General Secretariat of Istanbul Mineral and Metals Exporters’ Association (IMMIB) General Directorate of Mining Affairs (MIGEM) 9 .24 billion 15 in 2008. Marble and natural stones are the largest export products by value. Copper and chromium also constitute an important part of exports and are followed by 16 feldspar and boron. which triggered an upward trend in production.

579 697 2006 1. shipping and transportation advantages. Natural stone production in Turkey is now about 4 million m per year and the total capacity of plaque 2 18 production is approximately 6. qualified labor force.000 workshops and employing around 300. Exports reached USD 1. Natural stone production and exports increased steadily each year and now ranks first among Turkey’s mining exports. of which.500 natural stone quarries in Turkey. Balikesir. Spain and Iran.2 billion m of natural stone reserves. Turkey holds approximately 33 percent of global marble reserves. sculpture and the glass industries. Italy. Eskisehir. Canakkale.000 factories.8 billion m is marble. however. Turkey is a major global player thanks to its experience. India. Denizli. 17 18 Export Promotion Center (IGEME). and a wide range of natural stone types and colors. There are about 1.23 billion in 2009. 57 17 percent of which was processed goods with higher added-value compared with block natural stones.263 759 000 tons Granite 2003 106 2004 125 2005 161 2006 320 2007 252 2008 368 Source: Ministry of Energy and Natural Resources Besides holding a major share of the reserves. travertine and granite are the main commodities among all the natural stones in terms of both production quantity and value.2 Major Mining Commodities Natural Stones Natural stones are widely used in construction (furnishing & coating). Due to the high export potential and domestic consumption.856 1. Bilecik. due to the global economic crisis which caused a serious shrinkage in the construction industry.301 199 2004 1. 3. About 75 – 80 percent of the stones are processed. Turkey ranks in the top ten natural stone producers following China. natural stone exports declined and fell to USD 1. Most of the reserves are located in the provinces of 17 Afyon. The sector is mainly 17 driven by private companies.4 billion in 2008. supplying 2.2. Travertine and Granite Production 3 Marble & Travertine & Granite Production in Turkey 000 m3 Marble Travertine 2003 1. Natural Stones Report 2010 Ministry of Energy and Natural Resources (ETKB) 10 . 9.2.5 million m . marble. Konya. Figure 11 – Marble.018 2007 2.208 601 2005 1. Mugla. 3 3 Turkey has an estimated 5.000 people. Tokat.802 995 2008 2. Kirsehir and Elazig.

230 Compared with its exports. Figure 13 – Natural Stone Exports in 2009 Natural Stone Exports in 2009 Country China USA England Saudi Arabia Libya India Others Total Source: Export Promotion Center Amount (million USD) 353 208 51 43 37 35 503 1. Libya 19 and India.600 1.Natural Stone Imports of Turkey Natural Stone Imports 200 157 million USD 150 107 100 50 17 0 2007 Block Marble Processed Granite Source: Export Promotion Center 170 150 127 108 27 22 23 9 10 2008 Processed Marble Other 2009 Block Granite Total 19 Export Promotion Center (IGEME). Figure 14. India. Natural Stones Report 2010 11 .400 1. Processed granite has the major portion in imports with around 85 percent. Spain and Italy.232 1. Saudi Arabia. Turkey’s natural stone imports are lower and the most important suppliers are 19 China.200 1.Figure 12 – Natural Stone Exports Natural Stone Exports 1. followed by the UK.230 844 888 700 339 49 439 73 2008 Processed Marble Others 471 58 2009 Total China and the US are the largest natural stone importers from Turkey.400 million USD 1.000 800 600 400 200 0 2007 Block Marble Source: Export Promotion Center 1.

1% 100.400 2. Boric oxide reserves are mainly found in the provinces of Eskisehir.000 47. construction.7% 3.948 38% 37% 37% 45% 40% 35% 30% 2007 2008 Eti Maden Global Market Share 20 21 Eti Maden Isletmeleri. The concentrated boron production capacity of Eti Maden is about 2.285 thousand tons which represented 37 percent of the global boron market in 2008. agriculture and chemicals industries. electronics.000 80.Boron Minerals Boron minerals are mainly used in the glass.953 36% 1.000 41. nuclear industry etc.000 22.000 1. A major part of the concentrated boron is used as raw material in the production of boron chemicals for higher quality products. Figure 16 – Concentrated Boron Production (Eti Maden) Eti Maden Concentrated Boron Production and Global Market Share 2.Global Boron Reserves Global Boron Reserves Country Turkey Russia USA China Chile Peru Bolivia Serbia Argentina Iran Total Source: Eti Maden Reserves (thousand tons of B2O3) Share 866. the main sales of the company are boron chemicals rather 22 than concentrated boron.300 Thousand Tons 2.7% 0.000 16.0% Eti Maden Isletmeleri is the only company in Turkey that is involved in the production of concentrated boron. boron chemicals and equivalents.800 1. Boron Sector Report 2009 70% 2. The concentrated boron production of Eti Maden amounted to 2.3% 6.1% 8. Therefore.700 2005 2006 Eti Maden Production Source: Eti Maden.9% 3. automotive.000 100. The total amount of reserves in Turkey are estimated to be equivalent to 866.000 1.127 55% 50% 1.000 19. Figure 15.45 million tons per year.200 72. Bursa and Balikesir.8% 1.100 2. Boron Sector Report 2009 Ministry of Energy and Natural Resources (ETKB) 12 . as well as many others such as telecommunications.000 1.285 65% 60% 2.900 1. 21 Kutahya.6% 1.201.200 2.200 9.000 thousand tons of B2O3 which 20 constitutes 72 percent of global reserves.3% 0.4% 1. There are approximately 230 different boron minerals on earth containing different concentrations of boric oxide (B2O3) in their structure and Turkey holds the wealthiest reserves both in terms of amount and boric oxide concentration.

58 Chromium – Ferrochrome Chromium and ferrochrome are used in the chemicals. followed by Taiwan and the Netherlands. ranking 6 in chromium production globally.6 million in 2009. In 2008. Concentrated boron constitutes 4 percent of Turkey’s mining exports amounting to USD 105 million in 2009. Turkey also exported USD 63.1 million tons of chromium production in 2008 25 achieving a 47 percent of CAGR since 2005.80 5.51 6.86 104. metallurgical. with the exception that US Borax does not sell 22 concentrated boron but only boron chemicals. Mines and Minerals Report 2010 General Directorate of Mining Affairs (MIGEM) General Secretariat of Istanbul Mineral and Metals Exporters’ Association (IMMIB) 13 . Eti Maden together with US Borax constitute 70 – 75 percent of global boron production. reached 5.95 3. Turkey. and casting industries. Eskisehir. Erzincan.85 4.72 9.79 9. this amount decreased to USD 262. The regions around the provinces of 24 Elazig.45 11.48 4. Bursa and Kayseri hold the majority of these chrome reserves.4 million worth of 26 ferrochrome in 2009.17 3. China (88 percent) being the largest customer. nd th 22 23 24 25 26 Eti Maden İşletmeleri. amounting to USD 496. Due to the crisis. Mugla. Figure 17 – Concentrated Boron Exports in 2009 Concentrated Boron Exports in 2009 Country China Taiw an Holland USA Spain Belgium South Korea Japan India Slovakia Others Total Source: General Secretariat of Istanbul Mineral and Metals Exporters' Association Amount (million USD) 42. Although the chromium reserves in Turkey are not as plentiful as those in other countries. constituting an 11 percent share in Turkey’s total mining exports. 23 China is the leading importer. Turkey ranked 2 among chromium exporting countries. they are considered to be among the finest around the world due to their high mineral quality.3 million. refractory. Adana.01 2. Boron Sector Report 2009 General Directorate of Mining Affairs (MIGEM) Export Promotion Center (IGEME).The main global competitor of Eti Maden is US Borax owned by Rio Tinto.

Mineral Commodity Summaries 2010 Italy (22 percent) and China (9. ceramics and paint industries.S. Geological Survey (USGS) General Secretariat of Istanbul Mineral and Metals Exporters’ Association (IMMIB) 14 .800 2. most of which are located 27 around Manisa.52 4. 29 Most of the active companies in this specific sector are private companies and 90 percent of the production is being exported.Figure 18 – Chromium Exports in 2009 Chromium Exports in 2009 Country China Russia Sw eden Belgium USA Others Total Source: General Secretariat of Istanbul Mineral and Metals Exporters' Association Amount (million USD) 230. Aydin and Mugla.71 9. 27 28 29 30 Export Promotion Center (IGEME).31 262. Kutahya. Turkey ranks first in global feldspar production. Turkey exported USD 89 million worth of feldspar and Italy (44 percent) was the 30 leading buyer. Turkey holds 10 percent of the global feldspar reserves.000 4.95 6.29 1. Mines and Minerals Report 2010 General Directorate of Mining Affairs (MIGEM) U. In 2009.8 million tons of feldspar were produced in 2008 which represents a CAGR of 14 percent starting from 2005.000 8.81 9.000 6.700 6. 6.000 4.2008 Top Ten Countries in Feldspar Production 2008 Poland Czech Republic France Spain Thailand USA Japan China Italy Turkey 0 440 510 650 675 678 680 700 2.000 Thousand Tons Source: USGS. The production constituted approximately 30 percent of 28 the global production in 2008. Having reserves of 130 million tons.59 Feldspar Feldspar is an industrial raw material and is widely used in the glass. Figure 19 – Top Ten Countries in Feldspar Production .1 percent) are the other important countries in feldspar production.

Iron ore Turkey carries an estimated 82.54 89. 31 32 33 34 Export Promotion Center (IGEME). according to USGS studies. Turkey produced 4. 31 Bitlis. 3 Turkey carries 3 billion m of pumice reserves. Hatay. Kirsehir.50 288. Kayseri.5 million tons of iron ore reserves most of which are found in the provinces of 32 Balikesir. Turkey produced 3. Kayseri. Isparta and Mugla. Brazil being the most important supplier. Turkey is dependent on iron ore imports. ranking first in global production. Kars. dentistry. Turkey imported USD 902 million 34 worth of iron ore. In 2009. The production of iron ore in Turkey has not changed significantly throughout the years due to the insufficient level of reserves. Mines and Minerals Report 2010 General Directorate of Mineral Research and Exploration (MTA) General Directorate of Mining Affairs (MIGEM) Trade Map 15 . while this figure was 4.87 902. and is also traded as a medium of exchange. followed by Italy and Greece. Ankara. Sakarya.17 5. China (16 percent).Figure 20 – Feldspar Exports in 2009 Feldspar Exports in 2009 Country Italy Spain Russia UAE Others Total Source: General Secretariat of Istanbul Mineral and Metals Exporters' Association Amount (million USD) 39.7 million tons of iron ore in 2008. In 2009.34 13. Erzincan. Due to the low iron ore production. the iron ore imports are considerable.66 99. Agri.06 26. Sivas. aerospace and 35 aviation industries due to its high conductivity and durability. medicine.07 Pumice Pumice is used as a raw material in the textile and insulation industries. Since Turkey has a very substantial steel industry.96 4.30 Gold Widely used in the jewellery industry.56 43. Adana. Van. a jump of 16.6 percent compared with the previous year. most of which are located around Nevsehir. Malatya and Bingol. According to the relevant research.45 million tons of pumice in 2008. the Netherlands (11 percent) and the UK (7 31 percent) are the most important customers. gold is also used in the electronics.6 million in 33 2005.71 84. Turkey exported USD 14 million worth of pumice. Figure 21 – Iron Ore Imports in 2009 Iron Ore Imports in 2009 Country Brazil Sw eden Ukraine Russia Canada Total Source: Trade Map Amount (million USD) 385.

Figure 22 – Gold Exploration and Excavation in Turkey . Figure 23 – Major Mining Companies in Turkey Major Mining Companies in Turkey ISO 500 2009 Ranking 56 107 124 137 188 243 265 404 434 Company Name Eti Maden İsletmeleri Genel Mudurlugu Soda Sanayii A. Usak and Izmir. nd 31 More than 200 tons of gold are imported each year and Turkey is the 2 largest producer of gold jewellery.S.7 percent starting from 2005 35 and 11.500 tons of potential gold reserves. and Eldorado 36 Gold. With the rise in FDI. The amount of gold production in Turkey increased each year with a CAGR of 38. Usak Nigde. Erdemir Madencilik Sanayi ve Ticaret A. Sector Boron Mining Soda products and chromium chemicals Copper Mining Gold Mining Bauxite and aluminium production Iron. A. Some major players are Canada-based Frontier Development Group.S. This amount is not enough for Turkey since it ranks as the 5 largest country in terms of global gold demand.12 tons of gold was produced in 2008. Most of the reserves are found around Erzincan. Odyssey Resources Ltd.3 Main Players in Turkey Major players in the Turkish mining industry. bentonite mining Copper Mining Mining Chromium mining Location Ankara Istanbul Ankara Ankara Konya Sivas Kastamonu Kahramanmaras Elazig Production Based Sales 2009 (TRY million) 695 459 395 359 265 214 182 122 115 Source: ISO (Istanbul Chamber of Industry ) 35 36 Ministry of Energy and Natural Resources (ETKB) Business Monitor International (BMI) 16 .S. ve Tic. selected from the list of the first 500 manufacturers in Turkey prepared by the Istanbul Chamber of Industry. A. KCS Kahramanmaras Cimento Beton Sanayi ve Madencilik İsletmeleri Eti Krom A. Izmir. Gumushane.FDI Company Frontier Development Group Inc. Eti Aluminyum A.S.000 tons. are listed in the following table.S. ve Tic. Eti Bakır A. Park Teknik Elektrik Madencilik Turizm San.Turkey has approximately 6. Total global reserves are 35 believed to be around 49. Source: BMI District Canakkale Samsun Balıkesir. Tuprag Metal Madencilik San. gold exploration and excavation projects gained pace in Turkey.2. Anatolia Minerals Group.S. Anatolia Minerals Development Ltd. Erzincan 2. 700 tons of which are ready for processing. Odyssey Resources.S. Eldorado Gold Corp.FDI th Gold Exploration and Excavation .

3 Positioning Map 17 .2.

6 percent since 2005 and reached TRY 2. The country has a highly qualified labor force.783 million in 2008. Relatively high energy costs reduce the viability of some ore processing. in terms of both quantity and quality. Geographical advantages help exporting the products at lower costs. High start-up costs are required to enter the mining industry.  O   pportunities T  hreats Liberalization and privatization of the mining industry and the incentives granted by the government will help the country develop a competitive and strong industry with major global players. the latest advanced mining technologies will be introduced and exploration investments will rise. Turkey is import-dependent in some major commodities such as iron ore due to the lack of local reserves.2. 18 . Low R&D in the Turkish mining industry leaves Turkey behind in technological innovations.4 SWOT Analysis S     trengths W   eaknesses The country holds rich reserves in specific mines and minerals. Investments in the mining industry showed a CAGR of 16. With the increasing FDI and entry of new foreign companies. Increasing investments also speed up production.

000 500 2.2 2. Figure 24 – Investments in Turkish Mining Industry Investments in Turkish Mining Industry 3. constituting about 2. entries to the industry were limited. both of them issued by the state. equaling 3. To overcome these obstacles.15 0. Moreover. The number of companies with foreign capital in the mining industry increased every single year and reached 38 478 in 2009.3 – 2. investments in the mining sector increased with a CAGR of 16.500 1.000 1.3 percent of the total FDI.3 0. 37 38 Business Monitor International (BMI) Undersecretariat of Treasury General Directorate of Foreign Investment 19 .4 percent of all the investments. As a result of these changes.05 0 2007 2008 Public sector Share of mining industry in total investment Foreign Direct Investments: FDIs in the Turkish mining industry were around USD 193 million in 2009. in March 2009. various departments involved in the licensing process were reorganized under the Mining Affairs General Directorate of the Ministry of Energy and Natural Resources and the fees 37 were reduced.3% 834 1. mining being one of them.131 1.500 TRY million 2.485 2.3% 668 2.6 percent between 2005 and 2008. as well as the high fees paid by the investors for these licenses.3% 2006 547 2.4% 0 2005 Private sector Total Investment Source: Ministry of Energy and Natural Resources 2.949 0.388 369 2.817 1.000 2.1 0. There are two types of licenses in the mining industry. the Turkish government speeded up liberalization and privatization in almost every industry.25 0.5 Investment Opportunities In connection with the EU accession negotiations.2.783 0. the government introduced new tax advantages.584 1. Due to the time-intensive procedure for getting a mining permission and license.757 1.

Figure 26 – Recent M&A Transactions # Acquirer 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 Koza Altın Taiyuan Iron & Steel Group Company Ltd Park Elektrik Madencilik Tekstil San.0% na 99.0% Deal Value (million USD) na 305 9 40 13 2 22 na 90 6 5 42 12 21 38 45 11 45 Source: Mergermarket & ISI 39 Undersecretariat of Treasury General Directorate of Foreign Investment 20 . AS Ağı Dağı and Kirazlı Gold Projects Çöpler Gold Project BYS Metal Madencilik Pomzaexport Madencilik Mines Sega Bakır İhlas Madencilik Tekel Ayvalik Tuzlası Mir Madencilik Cine Akmaden Madencilik Ticaret A S Bensan Aktifleştirilmiş Bentonit Deveci iron ore field Karadeniz Bakir Isletmeleri (KBI) New mont Mining (Ovacik Mine in w estern Turkey) KSS Madencilik Normandy Mandecilik AS (NMAS) Target subsector Date mining chrome mining mining mining mining mining mining mining mining mining mining mining mining iron ore mining copper exploration gold mine mining mining 03/04/2010 27/10/2009 22/01/2009 09/12/2009 13/08/2009 01/04/2009 10/06/2008 25/01/2008 22/07/2008 23/09/2008 15/01/2008 31/07/2007 01/06/2007 22/12/2006 01/04/2006 01/03/2005 09/02/2005 09/02/2005 Stake % na 50% (each) 37.0% 100.5% na 5.0% 78.0% 50.S Koza Madencilik Sogutsen Seramik ATP Insaat ve Ticaret A.Figure 25 – Number of Companies with Foreign Capital Number of Companies with Foreign Capital in Mining 600 478 500 409 400 300 188 200 100 0 2004 2005 2006 2007 2008 2009 New Establishments Source: Undersecretariat of Treasury 69 318 236 138 48 82 91 50 Number of Companies with Foreign Capital Below is a list of recent M&A transactions in Turkey. Kop Krom.0% 100.0% 100.0% 50.0% 100. Even though overall M&A activity slowed down in 2009. Krom Maden Ceytas Madencilik Tekstil San. Koza-Ipek Holding Origin Turkey China Turkey Canada Turkey Turkey Turkey Greece USA Turkey Turkey Belgium UK Turkey Turkey Turkey Turkey Turkey Target Ovacık Gold Reserve Guney Krom.S.0% 100.1% 18. Halcor Odien Asset Management FEM Consortium (Turkish Finans Enerji Maden Metalurji Sanayi) Ihlas Madencilik SCR Sibelco NV Amcol International Corporation Kolin Insaat Turizm Sanayii Ve Ticaret A S Eti Bakir A.0% 100. 39 mining was one of the top sectors for M&A.. ve Tic. ve Tic.0% 100.S. AS Alamos Gold Çalık Holding Metro Maden Ihlas Madencilik A.

tr/ 21 .gov. effective and environment friendly use of energy and natural resources that w ould decrease the countrys' http://w w w . ETKB w orks for maintaining safe.gov.tr/ General Directorate of Mining Affairs MİGEM Ministry of Energy and Natural Resources ETKB General Directorate of Mineral Research and Exploration Eti Mine Works General Management MTA ETİ MADEN National Boron Research Institute of Turkey Mining Workers' Union of Turkey Chamber of Mining Engineers of Turkey BOREN MADENİŞ TMMOB http://w w w . and help w ith the invention of new boron products by providing the scientific research environment needed. MİGEM also takes precautions and creates incentives for exploration and mining activities as w ell as giving licences and authorization for mining.tr/ technology.6 Sector Establishments and Institutions Figure 27 – Sector Establishments and Institutions Establishments and Institutions General Secretariat of Istanbul Mineral and Metals Exporters' Association Code İMMİB Description Website Established to help its members increase national exports. cultural and technological develeopment of Turkey. Established to ensure that the mining activities are done in line w ith the countrys needs and development.migem.tr/ http://w w w .tr/ http://w w w .madenis. Established for conducting scientific and technological research on mineral exploration and geology. The aim of the establisment is to find and protect natural resources.immib.gov.2.tr/ http://w w w . and maintaining http://w w w . economical. processing and marketing boron resources of Turkey.org.gov. for social.gov.etimaden.maden.boren.org.enerji. Established to protect and defend the employees' rights. keeping up w ith the new est http://w w w . Established for mining.tr/ external dependency and contributing to country's w elfare. The aim of the establishment is to increase the use of boron mineral.org.tr/ competition pow er for the products to be exported. http://w w w .mta.

771.223 57.064.801.041 1.871.354 2008 1.111.500.145 759.376 0 2.299 4.626.184 121.988 0 640 138 485.179 501.403 478.954 5.506 160.957 0 8.154.887 0 2004 0 113.121 279.677 826.108 366.017.487 4.073.363.590 21.968 0 0 0 12.044 677.725 2.560 4.124 1.39 4.952.910 25.572 0 2006 6.478 1.264.338.135 598.733 555.156 253.111 1.953 3.303 523.387.100 0 8. PRODUCTION OF NATURAL STONES Type Diabase Ignimbrite Marble Onyx Travertine Andesite Basalt Decorative Stones + Mosaic + Slate Granite Quantity of Production (m 3) 2003 622 7.772 520.489 0 2.262.683 161.486 2.685 436.631 113.841 2.796 0 0 5.168.386 2.207.261.722 6.950 565.767.074 0 159.029 36.730 451 696.668 1.423 343.478.144 0 20.752 4.006 766.785.392 125.663 995.307.860.458 3.248 2.598.589 31.282 1.504 2004 8.406 65 3.364.000 0 63.242 1.107 466.374 51.316 879.171.034.246.364 23.716 0 0 44.432 0 4.560.7 Appendix Mining production amounts declared to the General Directorate of Mining Affairs by the mining license 40 owners.068 81.929 0 1.214 141 1.281.071 18.300 3.191 2005 28.448.588 4.273 0 52.969 2.941 0 19.696.396.605 42.313 530.371 2.240 0 2005 0 157.545 517.115.142 3.496 57.131 82.740 2.820 1.325 33.818 0 12 2.145 5.298 185.919.035 11.336 1.749 333.548.997 3.579 5.230 366.839 145.000 0 0 94.000 51 0 20.997.396 62.930 2006 0 20.515.250 0 116.553.923 0 17.2.069 2007 2.725 1.732 3.592 125.705 1.716 104.037 395.849.236 0 321 0 205 32 71.855.016 3.818 62.928 2.818 31.646 19.439 71.166.769.765 0 1.400 900 1.806.300.313 2.300 3.295 80 0 300 3.850 4.970 7.134 7.208.099 204 156.463.578.641.476 2.534.461 12.938 1.177.305 52.803.636 3.167.951 75 40 General Directorate of Mining Affairs (MIGEM) 22 .300.515.176.223.138 0 2008 15.959 Quantity of Production (tons) PRODUCTION OF METALLIC MINERALS Type Antimony Bauxite Cadmium Chrome Copper Gold Iron Lead Manganese Molybdenum Nickel Platinum Pyrite Silver Zink Quantity of Production (tons) 2003 650 333.625 3.530 8.26 4.176.218.421 11.226 0 0 3.324 214.166 367.228 45.354 0 127.500 2.577 792.162 7.174 1.406.233 6.341.620.670 62.033 185 107.909.995.184 0 2.805 3.606 7.204 0 0 0 97 495.108 6.377 320.703 0 734.479 961.277 377.730 80.784 0 8.824 1.464 20.04 3.742.782 1.674 167 554.936.742 0 28 2.173 19.236 2006 25.966 1.120.489.363 20 2.899 5.555 17.056 0 2.748 PRODUCTION OF INDUSTRIAL MATERIALS Type Alunite Barite Bentonite Boron Calcite Ceramic Clay (+ Halloysite) Chalcedony Chert Chert (Flint) Diatomite Dolomite Emery+Diasporite Feldspar Fluorite Graphite Gypsum Illite Kaolin Magnesite (+ Hydromagnesite) Mercury Mica Montmorillonite Nepheline Syenite Obsidian Olivine+Dunite Peat Perlite Phosphate Pumice Quartz Quartz sand Quartzite Radyolarite Rutile Salts Sepiolite (+ Meerschaum + Palygorskite) Sodium Chloride Sodium Sulfate (Soda) Stalagmite Strontium Salt Sulfur Talc Trona Zeolite Zircon Quantity of Production (tons) 2003 622 113.757 5.352 330.165 9.422.279.898 1.207.134.000 10.324 482.291 5.030 2005 458 5.875.584 260.616.065 4.142 0 3.118 3.914.511 184.775 12 249.673 107.276 26.774 914.661 1.574 5.944 474.077.925 2.208.639.000 192.542 19.370 5.632 36.900 2.184 4.831 749.826 6.468 2.202 0 0 0 96 371.608.254 945.672 2.574 0 504.185 1.029 13.000 0 0 170.864 0 908.711 1.236 7.456.107 8.546.369.031 382.703 25 51.515 962.706 34.234 0 581.740 1.537 2.000 109.17 4.117 802.198 9.127 61.554 1.362 890.578 1.473 2.722 1.485.784 3.100 198 464.307.014 0 2007 2.92 4.644 408.098.037 503.091 294 1.000 3.587 1.354.826 3.584 57 601.864 4.955.694 1.885 281.378 4.727 32.892 0 0 4.449.377 453.100.479 558.313.756 0 0 191.993 1.929 0 4.426.122 388.072 4.931 3.266 1.464.962.293.525 920.02 4.618 161.424.945 0 9.532 12.326 4.900 28.771 27.420 469.579 1.401 0 106.028 10.977 2.956 2.402 1.375 0 2.261.803 2.000 2.040 20 2.482 6.715 1.425 2007 28.637 176 198.397 684.432 3.100 30.169 2004 790 39.879 400 226 145.260 1.112 551.931 42.862 571.849.357 818.156 173.193 0 0 428.998.251 3.206 0 0 0 4.456 2.775 1.933 12650 3.690 2008 50.379 4.024 252.

Travertine and Granite Production Figure 12 – Natural Stone Exports Figure 13 – Natural Stone Exports in 2009 Figure 14 – Natural Stone Imports of Turkey Figure 15 – Global Boron Reserves Figure 16 – Concentrated Boron Production (Eti Maden) Figure 17 – Concentrated Boron Exports in 2009 Figure 18 – Chromium Exports in 2009 Figure 19 – Top Ten Countries in Feldspar Production .2008 Figure 20 – Feldspar Exports in 2009 Figure 21 – Iron ore Imports in 2009 Figure 22 – Gold Exploration and Excavation in Turkey .2009 Figure 10 – Country Based Exports in 2009 Figure 11 – Marble.FDI Figure 23 – Major Mining Companies in Turkey Figure 24 – Investments in Turkish Mining Industry Figure 25 – Number of Companies with FDI Figure 26 – Recent M&A Transactions Figure 27 – Sector Establishments and Institutions 4 5 5 6 6 7 8 8 9 9 10 11 11 11 12 12 13 14 14 15 15 16 16 19 20 20 21 23 .LIST OF FIGURES Figure 1 – Global Main Players Figure 2 – Main Minerals and Their Countries of Extraction Figure 3 – World Mineral Production Figure 4 – Global Iron Ore Revenues & Production by Country Figure 5 – Major Iron Ore Exporting Countries Figure 6 – Global Aluminium Production – Geographic Spread Figure 7 – Turkey Mining Industry Revenues Figure 8 – Major Turkish Mining Products Figure 9 – Turkish Mining Export Shares by Product .

ABBREVIATIONS CAGR EU GDP FDI ISO ISPAT SME USA USD WBMS Compound Annual Growth Rate European Union Gross Domestic Product Foreign Direct Investment Istanbul Chamber of Industry Republic of Turkey Prime Ministry Investment Support and Promotion Agency Small and Medium Enterprises United States of America US Dollars World Bureau of Metal Statistics 24 .

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