Sitting on a GOLD MINE
With around USD25 billion in annual mining imports, it is no wonder the government is drawing up new regulations to incentivize domestic production.
ALTHOUGH ANATOLIA HAS A LONG HISTORY OF INVOLVEMENT WITH GOLD,
and modest quantities of the much-loved yellow metal were produced in Ottoman times, the first gold mine in the modern Republic of Turkey did not come into service until the late 1990s. It did not operate for long. However, mining laws updated in 1985, alongside a favorable tax regime, have since led to a renewed interest in gold mining, and subsequent investments by international companies have turned Turkey into Europe’s leading producer of gold in recent years. By the end of 2019, Turkey will produce over 33 tons of gold. The sector’s production capacity could increase to 50 tons per year.
Turkey’s significant gold reserves are scattered along a corridor stretching the length of the country, but larger deposits are often found in certain areas in the west. There, more veins of gold are trapped in quartz rocks, waiting to be discovered. The geology of Turkey is also favorable for gold mining. The western coast of Turkey is the meeting point of three tectonic plates—the Eurasian plate, the African plate, and the Arabian plate—which is usually where epithermal gold pockets occur.
Since the 1990s, over 15 major gold mines have become operational, most of which are run by the private sector in partnership with foreign companies.
The open-pit Kışladağ mine in Uşak province in the west is the largest gold mine in the country. It is operated by the Vancouver-based Eldorado Gold and its local subsidiary, TÜPRAG Metal, which also runs the Efemçukuru mine near Izmir. The combined output of Eldorado Gold’s operations in Turkey forms up to 40% of the country’s annual gold production.
Promising up to 6 million ounces of gold, the Çöpler mine is yet another significant reserve in the eastern province of Erzincan. It is currently operated as a JV that includes the US-based company Alacer Gold and Turkey’s Çalık Holding.
The internationalization of Turkey’s precious metals mining sector has not only resulted in the transfer of world-class experience to the country, but has also raised the standards of mining practices.
Kerim Kemahlı, CFO of Nurol Holding, which operates a gold mine in Lapseki, is confident his company’s activities are in line with the best practices of the industry. “This is the first mine in Turkey that entirely abides by international standards, and the project financing is from a consortium of banks including EBRD, which has strict environmental and social impact policies,” Kemahlı said. His company is about to launch another one in İvrindi, in the Marmara region.
Adhering to high quality mining procedures is particularly important, since toxic substance such as cyanide are often used in upstream gold mining. If not handled correctly, these materials present serious environmental hazards. Mechanical processes and digital solutions, however, could make the mining of precious metals less dangerous.
“We started employing mechanized mining practices for chrome operations for the first time in Turkey in late 2018,” said Alp Malazgirt, CEO of Yilmaden Holding. He added that “smart mining” has helped them increase the scale of their operations and production as well.
Because the industry is following strict standards, public attitude to mining has recently changed. Many foreign companies currently consider Turkey a mining-friendly country. Ümit Akdur, former chairman of the Turkish Gold Miners Association, believes the government has a pro-mining attitude. That attitude is reflected in the country’s clear and well-structured mining regulations.
With large quantities of gold waiting to be discovered, a relatively mature precious metals mining sector, and companies following regulations in force, it is likely Turkey will continue to play a major role in the European and global gold markets in the next decade. ✖