a complete overview of turkey’s · pdf filea complete overview of turkey’s copper...

01 March 2013 | Vol 2 | Number 4 | www.miningturkeymag.com

Mining & Earth Sciences Magazine

by

ISSN: 2146-9423

•ACompleteOverviewofTurkey’sCopperwithParkElektrik’sMadenköyMine

•Turkey:TheRisingStarinGlobalMiningInterviewwithM.İlkerAycı,PresidentofISPAT

• IntheShadowofDie-HardLegalConcepts

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FROM THE EDITORTURKISH MINING SECTOR NEWSSANDVIK MINING TURKEY - EVALUATION OF 2012 AND EXPECTATIONS FROM 2013INVICTUS GOLD LTD - Tamer Gezbul

ORTADOĞU DRILLING LTD A COMPLETE OVERVIEW OF TURKEY’S COPPER PRODUCTION AND ADVANCED STAGE PROJECTS - Mining Turkey Magazine

PARK ELEKTRİK’S SİİRT MADENKÖY COPPER FIELD - Ciner Group

TURKEY: THE RISING STAR IN GLOBAL MINING - M. İlker Aycı

TURKEY TAKES A LEADING ROLE IN NATURAL STONE RESERVES - Mehmet Çapik

MINOR, CRITICAL AND STRATEGIC: ANTIMONY - Sait Uysal

HISTORICAL MINING AND PROCESSING CENTERS IN THE VAN PROVINCE OF EASTERN ANATOLIA: REDISCOVERED - Yusuf Ateş

THE POWER OF PLANTS FOR GOLD PROSPECTING - Colin E. Dunn

STRATEGIC PLANNING & VISION - THE KEY TO SUSTAINABILITY IN MINING - Alan E. Clegg

IN THE SHADOW OF DIE-HARD LEGAL CONCEPTS - Cemâl Dursun

THE PROCUREMENT TRIO: IMPROVEMENT OF PROCUREMENT BY STRATEGIC SOURCING, SUPPLIER RELATIONSHIP MANAGEMENT AND P2P (PROCURE-TO-PAY) PROCESS DESIGN - Alper Günaydın

NEED FOR A NEW AMENDMENT? - Şebnem Önder, Ayşe Eda Biçer

BUSINESS INTELLIGENCE IN MINING - Sean Dessureault, M. Mustafa Kahraman

Cover PhotoCiner Group’s mining company Park Elektrik operation Siirt Madenköy Cop-per Mine is one of the most important copper deposits of Turkey. The reserv of the mine is approximately 40 million tonnes copper and the actual produc-tion capacity of the mine is 1 million tonnes/year. The mine life of the proj-

ect expected to be more than 20 years and the company is planing a transition from underground to open pit mining. Detailed information about the project is at Page 28.

01 March 2013 | Vol 2 | Number 4 | www.miningturkeymag.com

Mining & Earth Sciences Magazine

by

ISSN: 2146-9423

•ACompleteO

verviewof

Turkey’sCopp

er

withParkElektri

k’sMadenköyM

ine

•TURKEY:TheR

isingStar

inGlobalMin

ing

Intervieww

ithM.İlkerAy

cı,Presidento

fISPAT

• TurkeyTakes

aLeadingRol

einNatural

StoneReserves

01 March 20132

Where Does the Sector Go with the Regulations and Legislations as the Mining Boom Continues?O. Çağım Tuğ | [email protected]

Editorwww.miningturkeymag.com

Mining in Turkey has been experiencing a “mining boom” for nearly the last ten years due to providing sustainable min-ing activities by particularly gaining for-eign investors’ trust and subsequently a significant entrance into the sector made by the local investors who have not been involved in mining but followed the example of the foreign mining compa-nies. This boom in the sector fuelled in particular by the record rise in precious metal prices has forced the country to update its Mining Law and regulations. Although the amendments introduced in the Mining Law No. 3213 in 2010 of-fered solutions to certain key issues, they also brought about some new prob-lems. Moreover, the legal environment subsequent to the amendments to the legislations and permissions has set a co-nundrum for mine manufacturers. In re-gard to this particular matter, the articles titled “In the Shadow of Die-Hard Legal Concepts” and “Need for a new Amend-ment?” will provide you with an overview of the legal environment.

This phase, indeed, should be assessed as a part of Turkey’s modernisation efforts, and the importance the country places on mining should be duly recognised. The adjustments that are attempted to be made in a fast and efficient way are currently unable to deliver satisfactory results; nevertheless, the sector contin-

ues to change at a rapid rate, and swift steps are taken to rectify mistakes. Min-ing holds a significant place in the eco-nomic policy of the current government, which aims to increase the cash flow and added value provided by mining. Under the circumstances, mines are considered as sources expected to produce profit before commencing production, where-as the work and regulations rather focus on obtaining permission and licence. However, mining is an entire process from exploration to end of production and departing the site. Therefore, explo-rations should be encouraged, and more mines should be enabled to go into production under the right conditions. I believe that the government of Turkish Republic will quickly address the short-comings and support exploration and project development activities in the forthcoming period, and that even more than the target added value can be ob-tained from the projects that proceed to production stage.

Also, we are going through a phase in which the companies that have recently entered or will soon enter the sector in Turkey need to pay careful attention to finding local partners. As I have point-ed out earlier, the big companies that achieved remarkable success in differ-ent sectors have made a brave attempt in entering into the mining sector. As

you can see in the news section, almost all foreign companies are teaming up with local partners or experienced and renowned experts, who have been resi-dent in Turkey for many years, serve in their Board of Directors. And it does not seem very unlikely that in the future, the giants of the international sector might come to Turkey and take over the com-panies that have succeeded in going into production.

In the 4th issue of Mining Turkey, we in-tend to bring you the developments in the Turkish mining sector over the last six months. Our copper and antimony inventories will inform you about these strategic and critical metals, while the interview with Prime Ministry Invest-ment Support and Promotion Agency of Turkey (ISPAT) President M. İlker Avcı will give you valuable information on the in-vestment opportunities in the country. I hope that the following articles will spur your interest, and I welcome your sug-gestions and contributions for Mining Turkey’s next issue.

“We offer our special thanks to Afrasia Mining & Energy Consulting AŞ Chairman Alan M. Clegg who has taken on the task of international editing for this issue and significantly contributed to the prepara-tion of the journal.”

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01 March 20134

Newswww.miningturkeymag.com

Zorlu’s Plan for 2013: Nickel Production in ManisaHaving undertaken 900 million USD worth of investments in 2012, Zorlu Hold-ing intends to invest in its companies in 2013 at a rate that is similar to the pre-vious year. Zorlu Holding’s CEO Ahmet Nazif Zorlu noted “In 2013 we will be in-vesting in fields regarding which we have fresher and major objectives. Therefore, it would be safe to say that our investments will be mainly in energy, mining and real estate sectors. It is without doubt that we will keep on making all necessary invest-

ments in our fields of excellence with a view to further enhancing our techno-logical superiority.” Pointing out that they will also proceed with the investments made in the recent years Zorlu indicated “Our investment Manisa - Gördes nickel production facility is in rapid progress. We intend to initiate manufacturing in the first half of this year. We plan to em-ploy a capacity of 10,000 tonnes of nickel processing up until the year 2016 and a capacity of 20 thousand tonnes for the

following term.” The nickel ore extracted in Manisa - Gördes site between the years 2003 - 2008 was exported whereas they have decided to have the nickel ore pro-cessed domestically as of 2008 target-ing for an investment project followed by facility establishment studies upon the termination of exportation activities. The company has another nickel site in Eskişehir - Yunusemre and ongoing nickel prospecting activities in a number of re-gions throughout the country.

Lignite Sites and Power Plants are to be Included in the IncentiveThe new incentive system announced in June 2012 will be initially revised to in-clude lignite and lignite-based thermal power plants. According to the story by Dünya Newspaper, lignite mines and power plants will be included in the in-centive system. It is reported that large-scale investments with tenders carried out in 2012 will also be considered with-in the scope of this practice.

While the preparations reach the fi-nal stage as implied by Deputy Prime Minister, it is reported that 6,730 mil-lion tonnes of lignite which is more than half of 12.1 billion tonnes of to-tal lignite potential identified so far in Turkey could be allocated, in the two year period of 2013 - 2014, for electric-ity generation upon this new incentive decision.

Within the scope of Afşin - Elbistan region investment agreement undertaken dur-ing 2012 and early 2013, following Tufan-beyli, Soma region tenders, is expected to call for proposals in 2013 for Konya Karapınar region which has a reservoir potential of 1.8 billion tonnes. When all these investments are underway, electric-ity generation will be initiated upon a lig-nite capacity of 6.7 billion tonnes.

Turkey’s Mining Products Exports Continued to Increase in 2012 According to Turkish Exporters’ Assem-bly, Turkey’s total exports reached to the value of 151,860,846 USD and the share of mineral exports in this value is 4,181,381 USD, 2.8% of the total exports value in 2012. Natural stone export was in the first place among the product groups with 1.9 billion USD, and this group was followed by metallic ores with 1.4 billion USD, industrial minerals with 663 million USD and Ferro alloys and

other mining products with 123 million USD of exportation.

In 2012, China was in first place with 1.8 billion USD of exportation, with the 20% increase compared to the previous year, among the countries to where sectoral export was carried out. China was fol-lowed by the USA with 330 million USD (6.80% increase), India with 132 million USD (28.22% increase), Italy with 122 mil-

lion USD (1.14% increase) and Iraq with 119 million USD (20.73% increase.)

Natural Stones

Metallic Ores

Industrial Minerals

Ferro Alloys and Other Products

Dispersion of Mining Export by Product Groups in 2012

Share of Coal Generated Energy will be Raised to 30%In his statement in the signature cer-emony in January for the “Conditional Royalty Tender for the Establishment of Thermal Power Plant” in Bursa - Keleş lignite deposit, Minister of Energy and Natural Resources Taner Yıldız indicated that 23% of the electricity generated in Turkey is obtained using coal and the goal for 2023 is to increase this rate up to around 30%. Yıldız went on to say that, within the scope of the energy policies the ministry pursues, they plan to invigo-

rate domestic and renewable energy resources. Referring to the plans for the future, Minister Yıldız noted that Turkey have power plants as old as 25 - 30 years, which are presently undergoing rehabili-tation, but establishment of new power plants is also under way and pointed out that confined projects such as Bursa - Keleş as well as large basin projects like Afşin - Elbistan and Konya - Karapınar would be maintained. According to Gen-eral Director and CEO of Turkish Coal En-

terprise (TKİ) Mustafa Aktaş’s statement in the ceremony, upon the royalty tender studies for the sites in Adana - Tufanbeyli, Soma and Bursa they will earn as much as 336 million TL out of these 3 projects. In recent years, Turkish Coal Enterprise made considerable profit by virtue of this royalty tender policy for the sites granted to private sector for operation. The enterprise announced a profit of 513.8 million TL for the year 2011, which is a record of profitableness.

01 March 20136

Centerra Gold Acquired 100% of Öksüt Project and Released Reserve UpdateTSX quoted Centerra Gold announced that the company has entered into a binding Share Purchase Agreement with Stratex International Plc. to acquire Stratex’s 30% interest in the Öksüt Gold Project located in the Kayseri region of central Turkey. Consideration for Stra-tex’s interest in the project consists of a 20 million USD cash payment at closing and a 1% net smelter return royalty on the project, subject to a 20 million USD cap. The closing of the transaction is con-

ditional on the conversion of six explora-tion licences to two operation licences, which are currently under application and are expected to be issued before the end of the first quarter of 2013 and other customary conditions.

After the agreement, Centerra released an initial resource estimate and reserve and resource update on February 2013. According to the release, the company outlined a new resource estimate of

682,000 contained gold ounces of indi-cated resources and 477,000 contained gold ounces of inferred resources, as a result of the successful drilling in 2012. During 2012, Centerra’s proven and probable gold reserves increased by 3.6 million contained ounces (before ac-counting for 2012 production) to 11.1 million ounces of contained gold, com-pared to 8.1 million ounces as of Decem-ber 31, 2011, based on the new Kumtor KS-13 open pit mine expansion.

Empire Mining Changed its Name toColumbus Copper to Highlight Their TargetEmpire Mining Corp. announced that it changed its name to Columbus Copper starting from January 10th, 2013 and will commence trading on the TSX Venture Exchange under the new name Colum-bus Copper Corporation and the new ticker symbol CCU. Shareholders are not

required to take any action in connection with the change of name; physical share certificates of Empire Mining Corporation will remain valid share certificates of Co-lumbus Copper in full force and effect.

According to the company, the changes

emphasize Empire’s concentration on its growing copper portfolio in Turkey and Serbia and in the general Balkan area of Europe. The changes are also motivated by efforts to further integrate within the Columbus Group with a view to reducing operating and overhead costs.

Dedeman is to Take Loan 100 Million USD for Upcoming Mine InvestmentsDedeman Holding signed a loan agree-ment of 175 million USD with Denizbank its future investments mining and tour-ism sectors in January. In his statement, Dedeman Holding CEO Murat Dedeman indicated that the new collaboration with Denizbank has to do with the public offer-ing of business lines developed under the umbrella of Dedeman trademark and fur-ther reinforcing the cooperation with do-

mestic and foreign strategic partnerships.

Dedeman Holding plans to employ 100 million USD of the total 175 million USD of loan in mining activities. Dedemen mining, one of Holding affiliates, intends to engage this financial resource in the investments in the lead - zinc - silver mine to be established in Balya district of Balıkesir province and the chrome mine

in Aladağ. The joint work with Denizbank involves the projection for public offer-ing of Dedeman Mining in Canada and London stock markets. According to the company, the essential reason for prefer-ence of these stock markets is the lack of public offering by mining companies in Turkey as they also prefer Canada and London stock markets abroad for the most part.

Turkey’s First Molybdenum ConcentrateManufactured by Özdoğu İnşaat LtdCompleting its facility establishment activities in Balıkesir - Havran between November 2010 and April 2012, Özdoğu İnşaat Ltd has manufactured Turkey’s first molybdenum concentrate. The company,

subsequent to initiating the spin of its mills in last May, upon producing the first marketable copper concentrate in the mine, accelerated the studies for produc-ing molybdenum concentrate. Following

the studies carried out, in August, com-mercial molybdenum concentrate was produced in Turkey for the first time. This is considered to be a significant develop-ment in the Turkish mining sector.

01 March 20138

Mine Permitting Proceeds at Ariana’s Red Rebbit Gold ProjectAriana Resources plc., the gold explora-tion and development company focused on Turkey announced the approval of forestry permits by the Prime Ministry and issued by the Department of Forestry for the Kızıltepe Sector of the Red Rabbit Project on 4 December 2012. Following the approval, on 4 February 2013 Ariana announced the submittal of Environmen-tal Project Summary Document to the Ministry of Environment and Urban Plan-ning for the Kızıltepe Sector and formal process for the permitting of the mine has been initiated with Environmental Impact Assessment positive certification

expected no later than the beginning of Q4 2013.

According to interim feasibility results published in October 2012 demonstrated attractive economic fundamentals are achievable at Kızıltepe. Combined reserve in designed pits at the Kızıltepe Sector of the Red Rabbit Gold Project reached 1.1 million tonnes at an average grade of 3.1 g/t gold and 39.8 g/t silver, corresponding to 115,460 oz Au and 1,468,200 oz Ag.

Ariana announced positive drill results at its Salınbaş and Ardala projects in Febru-

ary. Best intercepts from drilling in the Salinbaş area include 31.10m @ 1.38g/t Au, 17.90m @ 2.09 g/t Au and 9.20m @ 2.25 g/t Au. Many mineralised intercepts were obtained from less than 100m be-low surface. Best intercepts from drilling in the Ardala area include 81.5m @ 1.28 g/t Au + 10.5 g/t Ag; 34.5m @ 2.21 g/t Au + 10.7 g/t Ag and 18.2m @ 2.20 g/t Au + 25.6 g/t Ag. This area also shows an in-crease in base metal content towards the Ardala porphyry. According to the press release, development of the project is be-ing conducted in a JV funded exclusively by Eldorado.

Ciner is to Produce Soda in Kazan with Chinese PartnerCiner Group and Chinese Tianchen Corporation signed a contract on the construction of the soda ash facility and electricity generation facility in An-kara - Kazan, which is expected to have a total investment value of 1.35 billion USD. Ciner Group CEO Turgay Ciner and Tianchen Corporation CEO Wang Zhi-yuan attended the ceremony which was held in İstanbul on 11 January. Minister of Energy and Natural Resources Taner Yıldız was also present. In his statement

during the ceremony, Kazan Soda CEO Nedim Şener pointed out that Ciner Group has been exporting to 53 coun-tries and noted “We are already over 1 billion USD in soda ash exportation. Thanks to our investment in Kazan, we will produce a total of 4.4 million tonnes of soda ash. The efficiency rate of the facility is weigh more than that of its equivalents. Upon this new venture, we will become the leader of soda ash production.”

The exportation objective for Kazan Soda facility is 1.55 billion USD annually, and the expected production amount is 2.7 million tonnes as soon as the investment is com-pleted entirely. Produced soda ash will be transported via railroads. When Kazan Soda Facility is completed, it will be the world’s largest mine in soda ash production. More-over, the power plant of about 600 MW to be established on the site will generate electricity out of the waste heat and natural gas released from the soda ash.

Tenders for Thermal Power Plants of Seyitömer and Kangal ConcludedThe tender for Electricity Generation Company’s Seyitömer 600 MW thermal power plant has been concluded. Upon making it to the top two among 16 bid-ders in total, Çelikler Construction Co. won the duel against Eti Copper Inc. with its offer of approximately 2.25 billion USD. The privatization tender was car-ried out in bulk including the asset sale of Seyitömer Thermal Power Plant and movables and real estates utilized by Turkish Coal Enterprise (TKİ) Seyitömer Lignite Enterprise as well as the transfer of operating rights for the lignite site li-censes. Electricity Generation Company’s

600 MW power plant composed of four units which has been sold by tender, has an annual generation capacity of around 4 billion kWh as of 2011 and a capacity ratio of 74%.

The privatization tender for Kangal Theral Power Plant and its immovable properties has been finalized. Carried out on the 8th of February, the tender has been awarded to the Joint Venture of Konya Şeker AŞ - Siyah Kalem AŞ upon their bid of 985 mil-lion USD. The tender was concluded upon the bulk privatization of Electricity Gen-eration Company’s Kangal Thermal Power

Plant and the Treasury’s real estates uti-lized by the Power Plant by the method of “Sale” and via “transfer of operating rights” of licenses no 53318 and 72760 and the mine sites covered by the licenses.

7 companies took part in the tender upon receiving preliminary qualification and the finalists were Konya Şeker AŞ - Siyah Kalem AŞ joint-venture and Limak Con-struction Company. The closing bid for the first round was 400 million USD while the tender was awarded to Siyah Kalem joint-venture upon their highest bid of 985 million USD.

IVG

INVICTUS EXPANDS INTO TURKEY

• Exploring the Himmetdede South Gold Project next to Koza Gold’s Himmetdede Mine.

• Fast, effective exploration programme managed by a skilled team.

• New technical approaches to soil geochemistry and geophysics.

• Negotiations in progress to acquire new projects.

• Looking for new opportunities in all commodities.

• Contact Tamer Gezbul at Invictus Gold’s Ankara office +90 530 113 3220. Major shareholder:

Impact Minerals ~75%

Options: IVGOA

Non Executive Chairman:Peter Unsworth

Managing Director:Dr Mike Jones

Technical Director:Michael Busbridge

Non Executive Director:Richard Basham

Managing Director, Turkey:Tamer Gezbul

INVICTUS MADENCİLİK SAN. VE TİC. A.Ş.Mustafa Kemal Mah. Dumlupinar BulvariTepe Prime B Blok No: 266/130Çankaya, AnkaraTurkeyTel: +90 312 286 1023Email: [email protected]: www.invictusgold.com.au

INVICTUS GOLD LIMITEDABN 34 145 891 907309 Newcastle StreetNorthbridge WA 6003AustraliaTel: +61 8 6454 6666Email: [email protected]: www.invictusgold.com.au

01 March 201310

VTG Holding’s Second Coal Mine in South Africa Is Now OperationalSustaining its coal production in con-junction with its partner in South Af-rica, VTG Holding has put its second coal mine into operation. The company raised its turnover up to 205 million USD in 2012 upon producing 4.5 million tons of coal. In the press conference orga-nized in the South African facility as part of Schoongezicht Mine’s grand open-ing with a view to reviewing the sector activities, VTG Holding’s CEO Gökhan Kantarcıgil made several statements in December 2012.

Upon pointing out that VTG Holding has become a substantial manufacturer in South Africa, a leading country in min-ing sector around the globe, Kantarcıgil noted “In six years, we have managed to acquire a share of 1.8% in the total annual coal production of the country. Our goal is to become a global company with its origins in Turkey as we carry out mining activities with an understanding of sustainability. Our short-term objec-tives include significant growth in the mining sectors of both Turkey and South Africa. In the medium term, we aim to take part in mining projects in Colombia and Mozambique. In the long run, we plan to grow by taking over companies in countries which stand out in the min-ing sector such as Canada, Australia and the USA.”

Upon the commissioning of Schoongezicht Coal Mine in South Africa, VTG Holding which initially set out for its mining activities in South Africa and subsequently included Turkey and Co-lombia in its portfolio, now has 2 mines on production. 40% of the production is exported to Turkey, the UK, France, India, Pakistan and Eastern African countries. Referring to the “clean coal” produced in the South Africa facility in line with the European Union standards, Kantarcıgil suggested that they managed to bring the level of hazardous emissions of burn-ing coal even under the standards set out by the European Union, by virtue of the “coal washing unit” installed in the facility, which ensures 67% water and energy ef-ficiency compared to average initiatives.

Kantarcıgil noted that VTG Holding has been carrying out initial exploration ac-tivities for iron ore, platinum, gold, coal, manganese and chrome in 175 sites in South Africa. VTG Holding, performing its activities in Turkey via its subsidiaries Oremine Mining, VTG Nikel, VTG Cop-per and VTG Coal, took over in 2011 the Çaldağ Project carried out in Turgutlu district of Manisa province which bears the largest nickel reservoir in Turkey. Pointing out that Çaldağ Project whose reservoir has been testified in line with the international standards, is the only

and largest nickel deposit in Turkey, Kantarcıgil noted “140 million USD have been invested in Çaldağ Project so far. Within the scope of this project in which we intend to invest a total of 600 million USD, we plan to initiate production in the year 2014. Our goal is to provide em-ployment for 1000 people in the region upon Çaldağ Project which is expected to make an approximate contribution of 6 billion USD to the Turkish economy. Production of 100% pure nickel via ore dressing and refinement is not available in Turkey. Nickel demand is entirely sat-isfied through importation. Turkey pays around 1.2 billion USD each year for importing nickel and stainless steel.” He went on to say that the main area of use for the imported nickel in Turkey is stain-less steel industry and indicated that in stainless steel industry which requires raw materials of nickel, chrome and iron for manufacturing, while providing for its iron and chrome needs domestically, Turkey imports 35 thousand tons of nick-el to meet the demand. Underscoring the strategic importance of nickel for the country’s economy, Kantarcıgil suggest-ed that introduction of Çaldağ Nickel into the economy would validate Turkey as a nickel manufacturing country and ensure domestic supply replacing more than half of the nickel imported.

Frontline Gold Purchased Remaining 10% of Turkish Assets Including Menderes ProjectTSX-V quoted company Frontline Gold announced that it has purchased remain-ing 10% ownership of its Turkish subsid-iary FrontlineGold Madencilik San. ve Tic. Ltd. from Aegean Gold Madencilik Ltd. Şti. Aegean Gold, through its partners, had assisted Frontline Gold with the sourcing and acquisition of its permits in Turkey. Frontline now owns 100% of the Turkish assets, including the Menderes project.

Menderes project, located 20 km from the provincial capital of İzmir, western Turkey, consists of 62 km2 in a high potential epi-thermal gold environment.

Frontline Gold made another release on Menderes project and announced that the final payment on the property op-tion agreement with ENA Mad. Tic. ve Nak. Ltd. Şti press released on August 25th,

2010 in regards to its Menderes property has been amended and extended by 6 months during which the Company is to make 6 monthly payments that com-menced January 24th, 2013. At the end of June 28th, 2013, the company will have acquired a 100% interest in the property for 235,000 USD, subject to ENA retaining a 2% NSR on the property of which 50% may be acquired for 1,000,000 USD.

01 March 2013 11

Mediterranean Resources signs MOU with Ramsey Group, as Strategic Partner in TurkeyMediterranean Resources Ltd. an-nounced on 20 September 2012 that it has signed an MOU with Remzi Gür, the principal of an important Turkish industrial enterprise, the Ramsey Group (Gurmen), to incorporate this group as a strategic partner in the Company’s main subsidiary in Turkey, Akdeniz Resources Madencilik. This subsidiary holds the Mediterranean’s licences on the north side of the Çoruh River including Taç and Çorak deposits (also known as the

Kızıldağ project), which have been the subject of past resource statements and a preliminary economic assessment in September 2011.

As part of Mediterranean Resources’ plan to make the Kızıldağ project self-funding and to also “Turkify” the project, the com-pany will be incorporating an as yet un-specified company in the Ramsey Group as a 20% shareholder in Akdeniz, and a further 5% stake will be in the hands of

another Turkish strategic partnership. Thereafter, Mediterranean intends to float 15% of Akdeniz to the investing public in Turkey via an IPO on the “ven-ture exchange” (the GIP) or the Second-ary National Market of the Istanbul Stock Exchange in coming months in one or more tranches. If successful, the IPO will make Akdeniz the second listed mining stock on the Istanbul Stock Exchange after the substantial gold mining group, Koza.

Turkish Construction Company NTF Gave Up its Plans of Gold ProductionStratex International plc announced that its joint-venture partner, NTF İnşaat Ti-caret Ltd Şti (NTF), proposed that both parties monetise their respective invest-ments in the İnlice holding company, NS Madencilik Sanayi ve Ticaret Ltd Şti, by the sale of NS to a third-party company. With this sale, both companies are ex-pecting to take İnlice project to produc-tion as soon as possible. NTF has agreed that Stratex should be closely involved in the invitation and evaluation process. Stratex will now look to receive proceeds from the disposal, on a timescale yet to

be determined, instead of operating cash flow from Inlice in 2013, although despite the expressions of interest and several early offers, it must be noted that sale on satisfactory terms cannot be guaranteed.

Before the proposal that both parties monetize their investments, GBM Miner-als Engineering Consultants undertook a review of both the 2010 Feasibility Study on the Inlice project and the contents of an Environmental Impact Assessment. Incorporating a revised capital cost of

25.9 million USD, the all-equity, post-tax NPV at a 10% discount rate is 17.5 million USD and the IRR is 178% on a mine life of two years. This return was based on a reserve of 59,600 oz comprising 0.63 Mt oxide ore at a grade of 2.36 g/t Au and 0.47 Mt of unconsolidated talus ore at a grade of 0.79 g/t Au.

Stratex is still planning to be in produc-tion during H2 2013 at its Altıntepe project, where the Company is carried to production by Turkish partner Bahar Mining.

47.5 Tons of Gold Produced at Kışladağ Mine in 6 Years Eldorado Gold Corporation’s Turkish subsidiary Tüprag Metal Madecilik AŞ announced that in Kışladağ Gold Mine, 289,000 ounces (9.27 tons) of gold was produced in 2012 meanwhile a total of 47.5 tons were produced over the past 6 years during which the company has been op-erating. According to Doğan News Agency (DHA) Kışladağ Gold Mine Governmental and Public Relations Manager Hakan Ünal indicated that the 47.5 tonnes of gold pro-duced throughout the past 6 years made a considerable contribution to the country’s economy, they came 84th on the high tax payers list of 2008 upon paying 19 million TL of tax and they came 23rd on the Cor-

porate Tax list of 2011 among the highest tax paying companies throughout Turkey upon paying 110 million TL tax. Ünal noted “In addition to the economic contributions it made, our mine has been involving the local people in its success and develop-ment by undertaking civil society projects. In this regard, we have signed a protocol with the Ministry of National Education for the construction of a primary education school building with 16 classrooms and a capacity of 480 students in Uşak province. Moreover, the building we are planning to construct for Uşak University will make a contribution of over 5 million USD for Uşak.”

Underlining the world’s most advanced technologies employed in Kışladağ Gold Mine for production, Hakan Ünal indicat-ed “Our aim is contribute more and more to the production, the economy and em-ployment. Kışladağ Gold Mine is titled as the biggest gold mine in Europe based on the amount of gold produced annu-ally. The mine, in addition to making a major contribution to both national and regional development, was at the top of the list by outdistancing other compa-nies in 2012 in terms of providing em-ployment in Uşak province upon achiev-ing a local employment of 80% and cur-rently employs over 1000 people.”

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Correction About Tunçpınar Madencilik News in Mining Turkey Vol. 3Yusuf Ziya Yetkiner, the authorized per-son at Tunçpınar Madencilik, have sent a written statement to our main office re-garding a misinformation in a news story published in Madencilik Türkiye Maga-zine’s 25th issue and Mining Turkey Mag-azine’s 3rd issue with the title “Tunçpınar Madencilik Will Invest 1 Billion USD to Cevizlidere”.

The numbers that have been mentioned in the news has been taken from the source mentioned in the same text. We, Madencilik Türkiye Magazine and Mining Turkey editors, would like to publish Yet-kiner’s statement as is, as per our part on the mistake.

“We are at the primary stages at our cop-per prospect in Cevizlidere and plan-ning to carry out a drilling program. As it is well known, it takes years of years to clarify the investment and employment after a number of surveys and studies. Accordingly, it is very early and indefi-nite to announce “$1 billion investment” and “employement about 500 to 1000 people” as it has been mentioned in the

news about our project and company. We hope that the necessary works will end positively to invest and new em-ployment opportunities will develop. Only then it would be possible to men-tion some numbers.”

Re-edited version of the news after the statement is as follows:

EXPLORATION GOES ON AT CEVİZLİDERE PROSPECTTunçpınar Madencilik authorities stated to our magazine that the exploration program continues at the company’s as-set and one of the Turkey’s most prom-ising copper deposit Cevizlidere pros-pect at Ovacık - Tunceli. According to Tunçpınar’s PR Manager Hacı Karakuş’s statement to Hport, there are still nu-merous works to be accomplished to clarify the edges of the mineralization. Following this work, some drilling pro-grams have to be done to reveal the mining site and then a feasibility study has to be accomplished. Karakuş con-tinued “We are not planning to produce gold in this prospect because the gold

mineralization is low grade. Our com-pany informed its legal liability about the subject to the relevant institutions, organizations and representations. Hu-man health, environment and protect-ing sentimental values are very impor-tant for us. Due to moral responsibility, environmental and community values will be protected along with a success-ful practice of actual laws, legislations, international standards for a sustain-able mining activity.” and show the company’s sensibility.

Tunçpınar Madencilik is a joint-venture of Çalık Group and Alacer Gold. Accord-ing to an equal shares agreement, which comprise this prospect along with 15 projects in 2011, Çalık Group and Alacer Gold gave a start to Tunçpınar Madencilik at Cevizlidere prospect. At the prospect, it is estimated to be 450 million tonnes copper reserve with % 0.4 Cu along with 0.11 g/t Au. 5,000 meters drilling has been accomplished at the prospect so far and the mineralization shows signs of extensions along the mineralization and to the deep.

Hema Kicks Off for Construction in AmasraThe first swing of pickax under 710 me-ters below ground for the hard coal mine in Bartın - Amasra owned by Hema Ener-gy Inc., an affiliate of Hattat Holding, was performed before the company and state officials. During the ceremony where the Minister of Energy and Natural Resources Taner Yıldız and the Minister of Envi-ronment and Urban Planning Erdoğan Bayraktar as well as Hattat Holding’s CEO Mehmet Hattat and Hema Industry’s CEO

İbrahim Hattat were present, the minis-ters upon being briefed by Hattat Hold-ing’s Corporate Communication Director Tolga Tonguç about the production shaft and Hema Energy Thermal Power Plant Project, extracted the first hard coal of the mine by striking the pickax for the first time 710 meters below ground. The mine which has been officially opened upon the ceremony will produce the coal for the thermal power plant needs being

part of Hema Energy’s Western Black Sea Mega Energy Base. It is suggested that the coal extracted from the mine with a re-ported reserve of 573 million tons, has up to 6,000 calories. Mining Turkey has been informed that there are about 400 under-ground workers half of which have Chi-nese origins and that the Chinese team started digging from Amasra - Kazpınar location with a view to interlinking the three shafts of the mine underground.

29.5 Tons of Gold produced in 20121.7 billion USD worth of 29.5 tonnes gold have been produced in 2012 in Turkey. In his statement, Chairman of Gold Miners Association Ümit Akdur suggested that Turkey is expected to increase its total

gold production up to 30 tons in the year 2013. Whereas in 2001 gold production in Turkey amounted merely to 1.4 tonnes, the total volume of gold produced be-tween 2001 and the end of 2012 is over

136 tonnes. In 2011, the venture capital deposited for prospecting non-ferrous metals in Turkey was around 160 million USD and 75% of this number was spent by gold miners.

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Pozitif Mining Exports from Pınarbaşı to ChinaPozitif Mining, an affiliate of Tosmur Group of Adana enriches and exports the chrome produced in its site near Altıparmak village in Kayseri’s Pınarbaşı district to China. Annually producing 15,000 tonnes of chrome within the mine located on the skirts of Köşger Mountains, Pozitif Mining has been re-introducing low grade chrome to the country’s economy by enriching it in its facility on the site.

The company, in addition to making a huge contribution to the economy of Pınarbaşı district, has been process-ing 15,000 tonnes of ore each year in the facility since 2008 and importing it to China. Aiming to achieve 18,000 tonnes of annual production at the end of the year upon new investments, the company received 45% investment aid in 2012 from Central Anatolia De-velopment Agency with a view to im-

proving employment, production and exportation. It is reported that the company has managed to lower its en-ergy costs, been using the time more efficiently, hired 11 more people and increased its production and importa-tion by 20% thanks to the aid received. Further increase in the production is planned and therefore in the number of staff working in the mine where the employment is 60 currently.

Record Rise in Koza Gold’s ReservesKoza Gold Inc. has announced a record rise in its country-wide reserves for the year 2012. In the statement made to İstanbul Stock Exchange (ISE), as of 31.12.2012, their resources had reached up to 12.6 million ounces while the re-serves had hit 3.7 million ounces.

As of the end of 2011, company had 11 million ounces resources and 2.3 mil-lion ounces reserves. Considering the

338,000 ounces of production in 2012, the annual rate of increase in the re-serves of the company reached up to 76% whereas the annual rate of increase in the resources (visible and potential resources) turned out to be 20%. In ad-dition to the current resources indicated, the international independent audit or-ganization reported a potential increase of about 50%.

Moreover, in its statement to İstanbul Stock Exchange (ISE), the company an-nounced to have initiated construction activities for Kayseri - Himmetdede Proj-ect as of 5 November. According to July 2012 estimation, Himmetdede Project has 25 million tonnes reserves with an average grade of 0.71 g/t Au. Upon the completion of construction in the deposit planned as open-pit, production will be initiated as of the second half of 2013.

Alkim Introduced its Çayırhan Sodium Sulfate FacilityAlkim Alkali Kimya introduced to the me-dia its mine in Çayırhan that Alkim estab-lished with a view to producing sodium sulfate, an substantial raw material for sectors such as glass, paper and textile; and the manufacturing facility therein, which altogether are worth an invest-ment of 50 million TL. Anadolu News Agency (AA) reported in September that Alkim Chemistry established the facility in Ankara Çayırhan which has been op-erating for the past 8 months on account of having the 195 million tonnes of “glau-berite” reserve, equivalent to 65 million

tonnes of pure sodium, processed. The facility has an annual sodium sulfate pro-duction capacity of 150,000 tonnes.

In his statement, company’s CEO Reha Kora indicated that the facility which em-bodies a number of international precur-sors in technical and many other aspects, currently has a daily production capac-ity of 400 tonnes. Kora emphasized that ‘’glauberite’’, the raw material for sodium sulfate, is produced in facility via solution mining without harming any land forms, whatsoever. Indicating that the facility

has been constructed and operated in line with the principle of environmental awareness, Kora noted ‘’We produce 99% pure sodium sulfate in our full automat-ed, contemporary and integrated facility capable of generating its own electric-ity.’’ Kora reported that the facility is the second largest sodium sulfate producer in Europe and the fifth in the world. He also indicated that among their notable clients are Romania, Bulgaria, Greece, Libya, Egypt, Tunisia and suggested that Syria had been one of them up until the domestic turmoil it experienced.

Stratex and Lodos Agreement for Muratdere Has Been Completed Stratex International Plc., the AIM-quot-ed, owner of İnlice and Altıntepe devel-opment projects in Turkey apart from its several exploration stage projects, announced that the transaction of 51% of Muratdere project to Lodos Maden Yatırım Sanayii ve Ticaret AŞ, a wholly-

owned mining investment company of Pragma Finansal Danışmanlık AŞ has been completed at the end of November 2012. After the approval of the permit, Stratex will receive 1.7 million USD in return for 51% of Muratdere Madencilik Sanayi ve Ticaret AŞ.

The Muratdere copper-molybdenum-gold porphyry deposit has a JORC-com-pliant Inferred Resource of 51 million tonnes grading 0.36% copper, 0.12 g/t gold, 2.40 g/t silver, 0.0125% molybde-num and 0.34 ppm rhenium.

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EVALUATION OF 2012Sandvik is a global industrial group with advanced products and world-leading positions in selected areas - tools for metal cutting, equipment and tools for the mining and construction industries, stainless materials, special alloys, metal-lic and ceramic resistance materials as well as process systems. Sandvik Mining and Construction was one of Business Areas within Sandvik Group providing solutions especially to underground and surface mining and construction (quar-rying, projects and recycling) customers. Sandvik Mining and Construction was restructured in 2011. The two business areas have been working separately since 1st of January 2012, as Sandvik Mining and Sandvik Construction. In line with this global strategy, Sandvik Mining and Construction in Turkey also restruc-tured. Sandvik Mining Turkey moved to their new office and has been operating as a separate Business Area.

Here are the outstanding activities of Sandvik Mining Turkey in 2012.

TÜPRAG METAL MINING (ELDORADO GOLD) CG850 - GYRATORY CRUSHER ORDERCG850 Gyratory Crusher order - given by Tüprag Metal Madencilik AŞ, an af-fliation of Eldorado Gold Co. operating in Kışladağ, Uşak - is the fourth order for Sandvik worldwide and the first one in Turkey. The crusher will be delivered to the mine site in Q2, 2013.

Design features include the spider bear-ing, hydraulic adjustment, secured con-cave liners, hydraulic tank instrumenta-tion system and the unique Automatic Setting Regulation System. Sandvik’s CG series of primary gyratory crushers complements its well established cone

crushers for secondary and tertiary crushing.

ÇAYELİ BAKIR İŞLETMELERİ (INMET MINING) TORO1400 REBUILD With this TORO1400 rebuild, Sandvik proved that the scrap machines could be returned to operation after these kind of detailed rebuild works.

KOZA GOLD - HİMMETDEDE HEAP LEACH CRUSHING AND SCREENING PLANTKoza Gold, one of the key gold produc-ers of Turkey, purchased a crushing and screening plant, including 1 unit of CJ815 jaw crusher and 3 units of CH870 cone crushers for their mine site in Him-metdede, Kayseri.

CJ815 is in operation for heavy duty ap-plications with its strong structure and unique design, easy repair and mainte-nance and installation features. CJ815 is the biggest jaw crusher within Sandvik product range and this will be the first application in Turkey for this model.

The CH series are unique with thier ASRi and special designs, which enables the

machine to protect itself against the un-crushable tramp materials. Sandvik cone

Sandvik Mining Turkey - Evaluation of 2012 and Expectations from 2013

Profilewww.miningturkeymag.com

01 March 2013 15

crushers are competitive with their com-pact design, free of any hydraulic and mechanical units on the outer body of the crusher .

The CH870 cone crusher order given by Koza Gold will be the first application for this model in Turkey.

In addition to CJ815 and CH870, Him-metdede Project includes also one unit of CJ411, two units of CH660 and re-quired screens and feeders to prepare leach pad liner material.

İSDEMİR - AUBEMA HAMMER MILL REBUILDThe biggest hammer mill supplied by Sandvik is in operation in İsdemir AŞ since 2006. The rebuild work for the ro-tor (11 tons) and discs include the re-placement of the main shaft. The main shaft will be manufactured in Sandvik Aubema factory in Germany and will be delivered in Q1, 2013.

SARGIN AŞ - RAISEBORING MACHINESandvik Rhino 1088DC Raiseboring ma-chine was purchased by Sargın AŞ in 2012, which is the first sale of this ma-chine in Turkey.

The machine is operating at Balya, lead - zinc mine owned by Esan - Eczacıbaşı.

The machine is capable of drilling a hole of 2.5m diameter and a depth of 250m.

EXPECTATIONS FROM 2013Sandvik Mining Turkey will be support-ing the mining industry by focusing on the following outstanding products in 2013.

VIBROCONE - A CRUSHER WITH GRINDING PERFORMANCEThe Vibrocone crusher is the next gener-ation of crushing technology, combining the best of conventional crushing and grinding principals. Thanks to its unique design, which enables to crush down to 7 mm with a product size distribution of P50 = 3mm. That results in saving upto 30% energy in the downstream of the milling process.

The Vibrocone crusher is in operation at copper, gold and iron ore mine sites and provides highly increased efficiency in the comminution process.

SANDVIK STANDARD PLANTS (MODULAR)Sandvik Mining offers standard plants for green-field projects. The flexible, well optimized and versatile design of Sand-vik standard plants shortens the erec-tion and commissioning time which

01 March 201316

results in quicker return of investment even up to 5 months!

The idea behind the Sandvik standard plants is enjoying the advantage of per-fectly pre-designed modules with Sandvik engineering quality. Primary jaw crushers, secondary and tertiary cone crushers and several feeders and screens in different ca-pacities, within the Sandvik product range are applicable for this approach.

Sandvik Mining will be your first choice with standard plants when you count on your time!

HYBRID CRUSHERSSandvik Hybrids are perfectly designed for primary and secondary crushing of soft and medium-hard materials that also have the tendency to be wet and sticky.

The feed material will be crushed be-tween the counter-rotating rolls us-ing the principal of compression. The crushing rolls are driven individually by electric motors with couplings and gears. The hybrids are equipped with an advanced hydraulic gap adjustment sys-tem with integrated overload protection

to realize different product sizes. Having one of the rolls as moveable also pro-tects the machine against tramp materi-als together with the smart automation system.

CONTACTS

Sandvik Mining TurkeyAddress: Ivedik OSB, Arı Sanayi Sitesi 1122 Cad. 1417 Sok. No: 60 Yenimahalle, Ankara - TurkeyPhone: +90 (0312) 551 49 00 Email: [email protected] Website: mining.sandvik.com

01 March 2013 17

Australian listed company Invictus Gold Limited is the “new kid on the block” for gold and copper exploration in Turkey and the company is proving to be a fast mover. The Turkish subsidiary, Invictus Madencilik San. ve Tic. AŞ was set up in June 2012, it acquired its first project, the Himmetdede South Gold Project in July and is now waiting for assay results from its first drill programme there.

Invictus Gold’s Managing Director, Dr Mike Jones, has been very impressed with the exploration potential of the country and this has been enhanced by the relative lack of exploration in recent decades. Prior to Invictus Gold’s arrival in Turkey the company had been focussed on its exploration projects in eastern Australia. However increasing difficulties of operating in Australia and the lack of good quality, poorly explored projects led Invictus to consider a number of overseas countries in which to expand. It only took one trip by Mike to decide that Invictus should come to Turkey and follow in the footsteps of not only other successful foreign exploration compa-nies such as Chesser Resources Limited and Stratex Limited but in the older foot-steps of the ancient gold miners such as the Lydians. Perhaps it should not be said that other reasons such as Turkey’s fabu-lous history, scenery and food as well as the friendly welcoming people were also

part of the reasons for setting up in the country.

The Managing Director of Invictus Ma-dencilik is Mr Tamer Gezbul, a geologist from Istanbul who worked for Cominco in the 1980’s. Tamer has introduced In-victus to many projects and companies and has been the main driving force behind the rapid set up and commence-ment of operations for the company. To-gether with Operations Manager Mehm-et Gokceer, and Mike when he has been in the country, many thousands of kilo-metres have been covered in the past 12 months searching for exciting projects. The Himmetdede South Gold Project, in the shadow of Mt Erciyes and also not far from Cappadocia, was one of the proj-ects visited and its location immediately next to Koza Gold’s Himmetdede Mine was a key factor in the acquisition. The Himmetdede Mine is in development and earthworks are in progress for what will be a significant heap leach project. Similar rocks and alteration to those at the mine occur extensively on Invictus Gold’s property and after the rapid com-pletion of soil geochemistry and ground geophysical surveys, several key targets for drill testing were identified. The first target has now been tested and results are awaited as we go to press. Invictus is also in discussions to farm into several other very exciting projects.

Invictus is constantly looking for new opportunities across Turkey, not just for projects but also for local partners that wish to work with the company to rapidly advance their projects. Invictus Gold has a unique set of exploration skills, experience and methods designed to rapidly evaluate projects and move them towards production. Invictus ac-tively encourages you to contact Tamer Gezbul at Invictus Madencilik’s office in Ankara if you have projects that may be of interest.

Invictus Gold Ltd


CONTACTS Tamer GezbulManaging Director, TurkeyInvictus Madencilik San. ve Tic. AŞAddress: Mustafa Kemal Mah. Dumlupınar Blv.Tepe Prime B Blok No: 266 / 130 Çankaya - Ankara - TurkeyMobile: +90 (530) 113 32 20E-mail: [email protected]: www.invictusgold.com.au

Dr. Mike Jones and Mr. Tamer Gezbul celebrating the one of the delights of Turkey

Drilling at the Himmetdede South Project

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Ortadoğu Sondaj San. Tic. Ltd. Şti. was established in 1995 with the purpose of furnishing drilling services in the field of mining industry by performing deep-drill holes. Over the years, with its experi-enced drill crew and own manufactured drill rigs, our company has positioned it-self as one of the largest specialized and leading drilling companies in Turkey.

With its drill fleet capable of drilling deep holes, specialized drill crew and well-qualified equipment, our company performs all kinds of drilling services;

including surface and underground cor-ing, multipurpose, directional, RC, slim hole and geotechnical drilling in order to meet our clients’ demands. Moreover, performing engineering operations in the drill holes, such as; geophysical tests, single shot / multi shot surveying, core orientation, well development and geo-thermal tests are among our company’s services.

In the year of 2010 Ortadoğu Sondaj has established its own group company called; ‘Geo Makine İmalat Ltd. Şti.’, which

manufactures full hydraulic and high performance, deep-hole drill rigs and drilling equipment. These equipments are also being used in our own drilling

Ortadoğu Drilling Ltd


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projects. Especially with our own manu-factured deep hole drill rigs, Ortadoğu Sondaj is capable of drilling deep slim holes in the exploration phase of geo-thermal and oil / gas industry.

Our target is to complete all of our proj-ects in economical manner; acceptable with the international standards; at high quality and sensitive to environment, health and safety laws.

CONTACTS

Ortadoğu Sondaj Ltd. Şti.Address: Ehlibeyt Mahallesi 5. Cadde No : 36/13Balgat 06540 Ankara - Turkey Phone: +90 (312) 472 21 04E-mail: [email protected]: www.ortadogusondaj.com

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Turkey has very diverse mineral deposits due to its extremely complex geology and tectonic setting. A wide variety of primary metallic minerals and a signifi-cant amount of lignite are produced in the country along with its world leading boron production from its world class boron deposits. Turkey has a long mining history going back over 9,000 years but only recently has its mineral existence and sustainability been properly appre-ciated by both international and non-governmental local investors. Changes in Turkish Mining law during the past decade have stimulated investment in the mining sector and provide an op-portunity for Turkey to become a leading producer of gold and an emerging pro-

ducer of base metals. In this article, we will examine the copper mining indus-try of Turkey and you will find the latest updates and information about Turkey’s most important copper producers and most important copper projects.

There is excellent potential for both Cyprus-type and Kuroko-type VMS deposits in Turkey, especially in the productive north-eastern Black Sea coast area (the Pontide Belt). Exceptionally, Siirt - Madenköy Cop-per Mine which is to date one of the most important VMS deposits of the country, is located at the south-east of Turkey on the border folds. A detailed Project summary of Park Elektrik’s Siirt - Madenköy Copper Mine can be found later in this article.

On the other hand, there are some im-portant porphyry Cu-Au-Mo deposits recently found and these advanced level projects are planning to start produc-tion in a couple of years. Turkey also has a variety of skarn deposits following the general trend of the porphyry belts, yet most of the known deposits do not ap-pear to have sufficient tonnage in-situ to be mined economically, but exploration to date has been simple and inadequate. Only the Fe skarns appear to immedi-ately exhibit obvious mineability. Divriği with its 133.8 million tons of 56% Fe and 0.5% Cu reserves is a good example of economical skarn deposits and there is rising interest in sedimentary-rock host-ed Cu in central Turkey (Figure 1).

A Complete Overview of Turkey’sCopper Production and Advanced Stage Projects

Articlewww.miningturkeymag.com

Figure 1. Distribution of mineral deposits and prospects of Turkey with emphasis on host-rock lithology with tectonic features. (by Özcan Yiğit)

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Copper production of Turkey covers just 20% of the country’s copper needs cur-rently and is losing ground due to the rapid economic growth and demand for refined Copper which contributed in excess of 5 billion USD negative to a current account deficit in Base metals in 2012. There is only one copper smelter in the country and most of the companies involved in copper mining produce con-centrate to be exported and imported back as final refined copper products. In order to overcome this deficit the coun-try needs more copper smelters along with higher production.

Eti Bakır’s (Cengiz Holding) Kastamonu situated - Küre mine and Artvin situtated - Murgul copper mine produce enough concentrates to keep Eti Bakır’s copper smelter at full capacity. Eti Bakır’s cop-per smelter which is located at Samsun, a coastal city at Black Sea Region, produc-es 40,000 tons/year of blister copper and 220,000 tons/year sulfuric acid.

The 2012 Turkish copper ore exporta-tion realized 457.4 million USD with an increase of 23.06% in value while 2012 monthly average copper prices were around 1 - 10% higher than 2011 month-ly copper prices so the export volume also increased. Turkey definitely needs more copper smelter projects in order to meet country’s copper needs, which continue to grow.

Focusing on Turkey’s most important copper mines and their production lev-els and starting from Park Elektrik’s (Cin-er Group) Siirt - Madenköy Copper Mine which is one of the most important cop-per projects today. Some brief produc-tion numbers of Eti Bakır’s Kastamonu - Küre and Artvin - Murgul mines can be found later in the article. Subsequently Inmet Mining’s Çayeli Bakır project,

Demir Export’s (Koç Holding) Giresun - Lahanos mine, Nesko’s (Yıldızlar SSS Holding) Yenice mine introductions will take place.

The important advanced stage copper - polymetallic projects are; Columbus Copper Corp.’s (formerly Empire Mining Corp.) Karapınar and Demirtepe proj-ects, Aldridge Minerals’ Yenipazar poly-metallic project, Özdoğu İnşaat Ltd.’s Balıkesir - Havran Cu-Mo project, RCR’s (Red Crescent Resources) Sivas and Hak-kari copper projects, Pilot Gold and Teck Resources joint venture İzmir - Halilağa porphyry Cu-Au project, Alacer Gold’s Cevizlidere Cu-Au-Mo and Karakartal Cu-Au porphyry projects, Mediterranean’s Taç - Çorak Cu-Au deposit, Özaltın Hold-ing’s Cerrattepe Cu-Au porphyry project. Summaries follow the mine updates hereunder.

PARK ELEKTRIK’S SİİRT - MADENKÖY COPPER MINECiner Group’s Park Elektrik AŞ operates Siirt Madenköy copper mine since last quarter of 2006, after the privatization of the project from Eti Bank. With the ca-pacity of 1,000,000 tonnes/year produc-tion from underground, Siirt Madenkoy becomes Turkey’s largest producing me-tallic mine. The mine life of the project is more than 20 years and the company is on the transition process from under-ground to open-pit mining. According to a JORC compliant report, the reserv of the project is 40 million tonnes (31 million tonnes measured). Please find a more detailed summary of the project at page 28.

ETİ BAKIR’S KASTAMONU - KÜRE AND ARTVİN - MURGUL MINESPurchased by Cengiz Holding via the Turkish privatization of the production assets of Eti Bank, the company under-takes copper mining at Kastamonu Küre and Artvin Murgul facilities and oper-ates the copper smelting factories at Samsun. Production of copper and py-rite concentrate at the Kastamonu Küre facilities are realized with an annual capacity of 1,000,000 tons ore, 90,000 tons copper concentrate and 400,000 tons pyrite concentrate and the Mur-gul plant extracts raw copper ore over 2,700,000 tonnes per year through 3 open-pit mines, and processes to pro-duce 75,000 tonnes of copper concen-trate per year for supply of Concentrate Copper to Samsun Smelting Facilities. The Küre Mine and Samsun Smelter plants launched in 1973 for processing the copper ore deposits at the Black Sea region, joined into Cengiz Holding’s structure in 2004, the Murgul facilities were acquired in 2006. Today the Sam-sun Smelter is the sole facility that pro-duces copper metal from ore in Turkey and the facilities consist of Smelting, Sulfuric Acid and Concentrator facili-ties. In addition, a Hydro-electric Power Plant with an installed capacity of 2 x 2.35 MW at Murgul mine, has been built and operated to generate power within the frame of production license.

Kastamonu Küre Mine:

3 open-pit and 1 underground mine; 1,000,000 tonnes/year run-of-mine cop-per production; 90,000 tonnes/year copper concentrate. The company is still working for improvement on the ca-pacity of production and percentage of copper tenor and a cobalt leaching facil-ity is under design together with BRGM/France technology (Bio Leach Plant).

01 March 201322

Artvin Murgul Mine:

3 open-pit mine; 2,660,000 tonnes/year run-of-mine copper production; 75,000 tonnes/year copper concentrate. The company is still working for improve-ment on the capacity of production and percentage of copper tenor. A Hydro-electric Power Plant with the capacity of 2 x 2.35 MW operates at the site.

INMET MINING’S ÇAYELİ BAKIR MINEÇayeli is an underground copper and zinc mine wholly owned by Inmet Min-ing. The mine is located east of the town and port of Rize, approximately 7.5 km from the Black Sea and development began in early 1990 and commercial pro-duction commenced in November 1994. Çayeli Bakır İşletmeleri AŞ (CBI), a wholly owned subsidiary of Inmet, has the sur-face rights to operate on the immediate mine property and the deposit is a VMS Kuroko type with the mining method be-ing transverse sublevel retreat with paste and waste filling. The mine is expected to operate until at least 2019 and the min-eral reserves of the mine from a NI43-101 report dated back 2006 are as follows:

It produces three types of concentrates: copper concentrate, copper and zinc bulk concentrate and zinc concentrate and these concentrates are sold to a number of international and domestic smelters and traders.

At Çayeli, Inmet produced 31,400 tonnes of copper and 40,700 tonnes of zinc in 2012. For 2013 the company plans to produce 27,800 - 30,900 tonnes of cop-per and 35,900 - 39,900 tonnes of zinc with 1.02 - 1.09 USD cash cost per pound of copper.

DEMİR EXPORT’S GİRESUN - LAHANOS MINEDemir Export AŞ started mining activi-ties at Lahanos (Giresun) Underground Copper Mine in 1990. Mining activities ceased several times between 1994 and

2006 because of fluctuations of metal prices in the global market. Copper con-centrate production continues at La-hanos without production break since 2006.

Total number of workforce employed at Lahanos Copper Mine is around 130. Cut and fill underground mining method is the principal mining method for ore production at Lahanos. Production is di-vided into five sublevels according to the geometrical layout of the ore body. Pro-duction levels are designed to start from the bottom of the ore body and advance in upward direction. Cemented rockfill is used to backfill the depleted under-ground stopes.

Run of mine ore is then milled at the onsite flotation plant. Processing plant established in 1992, runs at 500 tonnes per day capacity. Annual run of mine production from the underground mine is nearly 130,000 tons and 15,000 tons per annum of copper concentrate is pro-duced from the processing plant.

800,000 tons of run of mine ore and 100,000 tons of copper concentrate had been produced since 2006. Produced copper concentrate is being exported to overseas smelters in Europe and China.

NESKO’S YENİCE MINEYenice mine is located at north-east of Yenice county of Çanakkale Province. Within the licence area, Triassic aged

units like quartzite-meta arcosis, meta-siltstone, meta-diabase, gabbro, and towards west, neogene aged dasitic ig-neous rocks are seen. The deposit has a hydrothermal type polymetallic (Pb, Cu, Zn, Au, and Ag) ore formation which is located within a diabase massive.

Proven and possible reserve amounts are as follows (dates back 2007): Proven re-serve amount: 713,006 tonnes. Possible reserve amount: 210,469 tonnes. Total reserve amount: 923,475 tonnes @ 1.36% Cu, 7.38% Pb, 2.85% Zn.

Production of 306,000 tons of ore since the beginning of the year 2001 to the end of year 2007 has been realised. Pro-duction values of the last three years are given as follows.

TURKEY’S IMPORTANT ADVANCED STAGE COPPER PROJECTS

ALDRIDGE MINERALS’ YENİPAZAR POLYMETALLIC PROJECTThe Yenipazar polymetallic VMS deposit (Ag, Cu, Pb, Zn) is the Aldridge Minerals’ most advanced property and is located at the geographic center of Turkey, ap-proximately 220 km east-southeast of the capital of Turkey, Ankara. The Yeni-pazar Project has a currently deter-

Category MTonnes Cu% Zn%

Proven 4.70 3.77 5.85

Probable 6.90 3.57 5.8

Total 11.60 3.65 5.87

Years Amount (t) Grade (%)

2004 65,000 4.79 Pb 0.70 Cu 2.37 Zn

2005 60,000 6.69 Pb 1.58 Cu 2.64 Zn

2006 - - - -

2007 72,000 5.85 Pb 1.35 Cu 2.62 Zn

Demir Export’s Giresun - Lahanos Mine

01 March 201324

mined strike length of at least 1,700 me-tres averaging 200 metres in width and approximately 20 metres in thickness at depths between 30 and 190 metres. During 2012, Aldridge successfully com-pleted a 10,000 m diamond drilling pro-gram, which confirmed the continuity of the resource and resulted in a better un-derstanding of the geology of the Yeni-pazar deposit and its mineralized zones. Aldridge is currently building on its De-cember 2010 Preliminary Economic As-sessment with a feasibility study that it is expect to complete in March 2013.

(Please find Aldridge Minerals’ news re-lease dated 11/26/2012 for detailed in-formation)

COLUMBUS COPPER’S KARAPINAR AND DEMİRTEPE PROJECTSPlease find detailed information about the projects at the page 23.

ÖZDOĞU İNŞAAT LTD.’S BALIKESİR - HAVRAN CU-MO PROJECTÖzdoğu İnşaat Ltd. won the govern-ment tender of the rights for the cop-per - molybdenum mine located at the Balıkesir Province Tapioca village region on 17.11.2007 by the General Directorate of Mining Affairs (MİGEM). The company obtained its “Operating License” from MİGEM at 06.03.2008, the positive cer-tificate of “Environmental Impact Assess-ment (ÇED)” from “Ministry of Environ-ment and Urbanization” on 20.11.2009, the “Business and Work Permits” from Balıkesir Province Special Administra-tion Directorate in 20.08.2010 and finally “Forest Permits” from “Ministry of Forest and Water Affairs”.

According to MTA’s (Mineral Research & Exploration General Directorate) drilling reports related to the licence area which covers 1439 hectares, the resource of the Havran deposit revealed as 17.5 mil-lion tonnes @ 0.32% Cu and 0.04% Mo. After the positive results of subsequent

drillings driven by Özdoğu, the resource increased to 26 million tonnes and the company is planning an open pit mine in line with the new drilling results and exploration, while a feasibility study has begun for the underground production. During the mine life time which is esti-mated at 13 years, the company will pro-duce Cu and Mo concentrates with the ROM tonnage for ore and waste mined running at around 3 million tonnes/year indicating a low stripping ratio. On 30.10.2012 the company announced that 6,650 tonnes of 22 - 25% Cu and 150 tonnes of 46 - 48% Mo have been pro-duced and the company is conducting a research - development project to reach 28% grade for Cu and 55% for Mo in its concentrates.

RCR’S (RED CRESCENT RESOURCES LTD TSX-RCB, FFX-7RC) SİVAS COPPER PROJECT (SCP) AND HAKKARİ COPPER PROSPECTS The SCP development belongs to the Tethyan Orogenic Belt of Turkey and the activity that was associated with its formation. The geological setting and al-teration patterns at the Kapılı Tepe prop-erty at Kızılmezra are very similar in their orogeny and genesis to several large economic deposits being mined and de-veloped elsewhere in Turkey, e.g. Cevizli-dere Copper Project in Ovacık county of Tunceli by Tunçpınar Madencilik a JV be-tween Alacer Gold and Çalik Group; and Muratdere Copper/Molybdenum/Gold project also in Tunceli recently bought by Lodos Maden AŞ a wholly owned sub-sidiary of Pragma Financial Consulting AŞ Notably both of these deposits are smaller and lower grade than the SCP with no apparent upside potential.

The most important observations are; • There are now more than twenty sur-

face locations recorded with grades of over 1% copper showing, mainly oxides but some disseminated sulphi-des also appear;

• All of these sulphides indicate Volca-nic Massive Sulphide origin and the latter two; chalcocite and covellite are interesting as strong indicators for a significant zone of secondary enrich-ment (supergene) of a major copper sulphide deposit. Generally though we are looking at a broadly dissemi-nated copper deposit with secondary nickel and gold within an extensively altered shear zone;

• The “silicified carbonate zone” is in-terpreted as a “listvenite”. Listvenite is an original Russian term, however these rocks (carbonate-rich alterati-on products of ultramafic rocks) are found in the lower ultramafic parts of many greenstone belts worldwide where it is often referred to as quartz-carbonate-fuchsite schist (e.g. Bar-berton greenstone belt in the Mpu-malanga province of South Africa). As such Listvenites have a common spatial and temporal association with orogenic-type gold deposits.

The physical structural confinement that defines the SCP mineralised zones, i.e. the Main Zone (“MZ”) and the South-East Zone (“SEZ”), along with the detailed geochemical and deep IP (“Induced Po-larisation”) geophysical profiles that have been generated, initially by Falconbridge and subsequently independently veri-fied by consultants to RCR, the surface mapping and chip sampling, the struc-tural geological review and lastly the drilling and core sampling, collectively define a number of clear physically mea-sureable blocks of potential resources.

The actual measured physical dimen-sions of the shear hosted mineralisation, and the dip orientation which is aligned to the clearly visible and mapped struc-

Contained Metal

Category TonnesAu (g/t)

Ag (g/t)

Cu (%)

Pb (%)

Zn (%)

Au Eq (g/t)

Au (M oz)

Ag (M oz)

Cu (M lbs)

Pb(M lbs)

Zn (M lbs)

Au Eq(M oz)

Indicated 29,669,000 0.95 31.3 0.31 1.01 1.47 2.42 0.90 29.85 204.8 660.2 961.2 2.30

Inferred 369,000 0.47 25.5 0.18 0.94 1.89 1.88 0.01 0.30 1.5 7.7 15.4 0.02

Total Mineral Resources of Yenipazar Project

01 March 2013 25

ture of approximately 40° degrees to the south-east, enable a purely volumetric calculation of the listvenite mineralised MZ. This equates to approximately 240 million cubic metres in-situ which, when discounted conservatively for geological (-35%), mining (-15%) and other (-15%) losses represents at least 260Mt of po-tential mineralised material as resource. Falconbridge estimated, within the wide outcrop target area only, some 200Mt for the MZ and therefore with all the evidence and independent assessment, one can say that it is a high probability to confirm a reserve of between 150Mt and 250Mt. Such a body at a grade of 0.8% Cu, 0.25% Ni and 0.12g/t Au could contain approximately 5 billion pounds (2.27Mt) of copper, 1.1 billion pounds (499kt) of nickel and 1.1 million ounces of gold.

Collectively the SEZ blocks display high-er grade mineralisation both at surface and in the buried material than the MZ and which appears on average, to be 75% higher grade both for primary cop-per and the by-product nickel and gold values.

This could be attributed to localised en-richment and/or less time exposure to the oxidizing process.

Through the utilisation of the measured dimensions of the blocks and account-ing for losses in the same way as the MZ, but with higher attributable geologi-cal losses of up to 50% due to the later faulting, with a measured average dip of +30°, the estimated total tonnage in the SEZ area is approximately 130Mt of min-eralised material.

Falconbridge estimated a target of 100Mt for the SEZ in the same area and therefore with all the evidence and inde-pendent assessment it is possible to say that it is a high probability to confirm a reserve of between 80Mt and 130Mt. Such a reserve at a grade of 1.2% Cu, 0.5% Ni and 0.25 g/t Au could contain ap-proximately 2.5 billion pounds (1.13Mt) of copper, 1.1 billion pounds (499kt) of nickel and 800 thousand ounces of gold. In total then the SCP represents in-situ potential for 7.5 billion pounds (3.4Mt) of

copper and up to 1.8 Million ounces of gold, with an upside by product of nickel potentially between 0.5 and 2 billion pounds (0.23 to 0.91Mt) subject to the degree of silicification of the sulphides.With no current NI43-101 Independent Technical Report and/or Resource State-ment RCR has not as yet engaged any-one to complete any independent Min-ing studies. However with the fact that there is sufficient data and information with respect to the spatial nature and overall dimensions of the targeted min-eralised zones for extraction, this makes it possible for a concept mine design to be executed in house.

Falconbridge did exactly this during their term of project ownership and produced a concept mine design for an open pit with a twenty (20) year life. What was unclear though is whether they planned a single pit or multi-pit operation, al-though the study was certainly serious and classed at least as an OME (“Order of Magnitude Estimate”).

Any mine design at the SCP is ofcourse clearly to be premised on a multiple open pit design in the potentially fore-seeable years of the life of mine which will be at least 20 to 25 years. This will deliver large flexibility in the operational ability to sustainably deliver ROM ore either within a specified grade range, al-low high grading if required to take ad-vantage of price peaks in the commodi-ties cycle and allow blending to optimise Leach pad delivery and process manage-ment as a whole.

Within the confines of the future confir-mation of the mineralised zones being open at depth, underground designs for extension of mine life may be contem-plated at that time.

It is envisaged that the MZ will be mined by one large pit centred in the wide out-cropping zone. This main pit would be ramped up to produce 4Mtpa or 20,000 tonnes per day (“tpd”) for the first five years, then 6Mtpa or 30,000 tpd for a second five year period, then 8Mtpa or 40,000 tpd for a third five year period and finally 10Mtpa or 50,000 tpd for the bal-ance of the life of the mine which will be

at least another five years.

As far as the SEZ is concerned this will be mined via a number of smaller pits, at least four in number over the life of mine and these may at some stage inter-connect with each other in some areas. These pits would be ramped up sequen-tially to produce 2Mtpa or 10,000 tonnes per day (“tpd”) for the first five years, then 3Mtpa or 15,000 tpd for a second five year period, then 4Mtpa or 20,000 tpd for a third five year period and finally 5Mtpa or 25,000 tpd for the balance of the life of the mine which will be at least another five years.

Collectively then the SCP is to be de-signed for expansion over four phases in fifteen years after an initial two year resource confirmation, mine and pilot plant establishment and operation. This design is planned to deliver 360t of Cu equivalent (Cu and Ni) from the pilot plant process and followed by a total of 36ktpa Cu in Phase 1 (years three to seven), 72ktpa Cu in Phase 2 (years eight to twelve), 108ktpa Cu in Phase 3 (years thirteen to seventeen) and 144ktpa Cu in Phase 4 (years eighteen to twenty two).

Cumulatively the SCP could be expected deliver in its life more than 2Mt of Cu and significant by-products of nickel (300kt to 900kt dependant on silicification ef-fects) and gold (750,000 oz to 1 Moz).

It was announced in late 2012 by RCR (TSX-RCB) that it was looking to mon-etize (sell) the SCP as its size and require-ments for development capital are be-yond the capability and capacity of the Junior company. No announcements have been made since but it is believed that strong interest has been shown by a number of companies and that talks are ongoing for its transfer to a new owner and Turkey is looking forward to the de-velopment of this potentially very signifi-cant project.

Hakkari Copper Projects

RCR undertook a significant satellite im-agery survey of the overall project area and extensions in Hakkari very early on in its tenure and work in the province

01 March 201326

in 2008. The results identified a number of significant anomalies within its area of control and in its licences already held by the company.

Further ground truthing was done dur-ing 2009 by its geological teams and this confirmed Gossans of significant size and with strong potential for economic mine development. Grab samples taken at the time delivered significant mea-sured polymetallic grades for Copper, Gold, Zinc, etc.

These deposits offer the company sig-nificant developmental upside although to date the lack of capital availability has forced focus on its high grade (greater than 25% Zn) oxide Zinc deposits which outcrop strongly over a strike in excess of 80km. The strong progression to be-ing cash positive from Zinc Mining & Concentration sales in 2013 is expected to give the company a greater ability to invest in the development of the Hakkari Copper deposits from 2014 onwards.

PILOT GOLD AND TECK RESOURCES JOINT-VENTURE İZMİR - HALİLAĞA PORPHYRY CU-AU PROJECTHalilağa is development-track copper-gold porphyry located in northwest Turkey, dis-covered by Fronteer Gold. The project is lo-cated in a regional industrialized zone that includes large open pits, a major power plant, and tile factories. Power lines from a nearby coal-fired generating station run through the property. The project is inter-preted to be a single widespread mineral-ized system containing porphyry-related high-sulphidation style gold and copper-gold mineralization.

Since its discovery in 2007, Halilağa has

grown rapidly with significant widths of copper-gold mineralization extend-ing over a strike length of 1,200 m and a width of up to 850 m, with thicknesses ranging over 600 m. Metallurgical work has also been undertaken with excel-lent initial results and a final concentrate grade of 35 - 40% copper with 85-90% overall copper recovery was achievable. Gold grades in the final concentrate were approximately 25 grams per tonne with overall gold recovery in the range of 65 - 70%.

Pilot Gold’s 60% joint venture partner, Teck Resources Limited’s Turkish subsid-iary is the project operator.

18,000 m of drilling was completed in 2011, culminating in a project-first re-source estimate that returned an Indi-cated resource of 1.665 million oz Au at 0.31 g/t Au, 1.112 billion lbs Cu at 0.30% Cu (168,167,000 tonnes); and an Inferred resource of 1.661 million oz Au at 0.26 g/t Au, and 1.007 billion pounds of copper at 0.23% copper (198,668,000 tonnes).

ALACER GOLD’S CEVİZLİDERE CU-AU-MO AND KARAKARTAL CU-AU PORPHYRY PROJECTS

Cevizlidere Project

Cevizlidere is located in Ovacık Town-ship, Tunceli Province within the moun-tainous east-central Anatolian region of Turkey 600 km east-southeast of An-kara. The project is 80 km by road to the northwest of the provincial capital of Tunceli (pop. 26,000) and 20 km south-west of the town of Ovacık (pop. 5,800), the project’s logistical base.

Alacer Gold picked up the Cevizlidere tenements in 2000 and conducted a stream sediment sampling campaign to identify anomalous mineralization. This work was followed up in 2002 with a soil and rock geochemical sampling program designed to identify drill tar-gets. Based on this work, a highly suc-cessful drill campaign was conducted in 2003 which led to the discovery of the Cevizlidere deposit in the very first hole drilled: 580m at 0.39% Cu, 0.14g/t Au and 52ppm Mo. Further drilling was under-taken in 2004 and 2005, leading to a de-clared mineral resource which remains open to the southeast and at depth.

The rock types at Cevizlidere include Mesozoic limestones overlain by Tertiary andesitic flows and pyroclastic rocks. These units are cut by multiple intrusive phases, varying from the early “crowded” feldspar porphyry to massive dacite porphyry to narrow, late-stage, pheno-cryst-poor, feldspar porphyry dikes, all of which combine to make up a NW-SE elongate composite porphyry stock.

Cevizlidere falls in the copper-gold-mo-lybdenum class of porphyry copper de-posits. The mineralization is associated with multiple porphyry intrusions and zoned alteration and mineralization.

Alacer Gold is the operator of Cevizlidere, which is a 50/50 joint venture with Turk-ish partner Lidya Madencilik San. ve Tic. AŞ and is currently undertaking prepara-tory work prior to recommencing drilling at Cevizlidere.

Karakartal Project

Karakartal is located roughly 550 km east of Ankara, Turkey. The project is 115 km by road from Erzincan, Turkey and about 15 km south-southeast from the town of ĺliç (population 2,500). Karakartal is roughly 10 km from by road from the Çö-pler mine.

Alacer Gold picked up the Karakartal tenements in 1998 and conducted a targeting exercise, culminating in an ini-tial eight-hole diamond drill program in 2001. This work was followed up in 2008 with a campaign involving 22 holes for a

Tonnes (x1000)

Grade Contained Metal

Cu Au Mo Cu Au Mo

(%) (g/t) (%) (lb) (oz) (lb)

Sulphide resource (1)

indicated 168,167 0.30 0.31 0.006 1,112,223 1,665 20,391

inferred 198,668 0.23 0.26 0.007 1,007,361 1,661 29,783

Oxide resource (2)

inferred 4,914 0.08 0.60 0.004 95

Halilağa Resource EstimateStrip Ratio: 2.5: 1 (1) At a 0.2% copper equivalent cut-off grade. (2) At a 0.2 g/t gold cut-off grade

01 March 2013 27

total of nearly 7,800m of diamond drill-ing. The information from these drilling programs was used to estimate an initial mineral resource for Karakartal.

Karakartal is a copper-gold porphyry system hosted in variably altered diorite that has intruded a sequence of carbon-ates and metasedimentary units. Copper mineralization as primary sulphides is seen as chalcopyrite with rare secondary covellite and chalcosite. Oxide copper is malachite, with azurite and neotocite. The copper mineralization is commonly developed as part of a weak quartz stockwork with the quartz veins being less than 1cm in width. The best copper mineralization is associated with the po-tassic alteration zone.

Drilling at Karakartal during 2012 has been aimed at better defining and ex-tending the current resource as well as testing nearby targets. Alacer Gold is the operator of Karakartal, which is a 50/50 joint venture with our Turkish partners Lidya Madencilik San. ve Tic AŞ (“Lidya Mining”).

MEDITERRANEAN’S TAÇ - ÇORAK CU-AU DEPOSITMediterranean Resources Ltd. is actively working on its two 100% owned proper-ties which were in Teck Cominco’s pos-session during 90’s and they spent more than 4 million USD for the development of the projects. During 2006 Mediter-ranean spent 3.1 million USD more for the exploration activities on Taç, after which it earned an undivided interest in the properties, and during 2007 Mediter-ranean spent 4.5 million USD of explora-tion on Taç and Çorak. On March 2008, Mediterranean announced new NI 43-101 compliant resource estimates for Taç and Çorak. Highlights of the study are as follows:

• Indicated resource of 1,598,417 ozs of gold at both Taç and Çorak on a gold-equivalent basis with a threshold of 13 USD/tonne contained metal value (and inferred resource of 730,889 ozs);

• Indicated resource of 1,335,249 ozs of gold at both Taç and Çorak on a cap-ped basis with a threshold of 13 USD/

tonne contained metal value (and in-ferred resource of 484,276 ozs);

• At Taç, indicated resource of approxi-mately 58.0 million lbs of contained copper; (and inferred resource of approximately 8.0 million lbs of con-tained copper);

• Also at Çorak, indicated resource of approximately 654,334 ozs of silver on a capped basis with a threshold of 13 USD/tonne contained metal value (and inferred resource of 887,627 oz of silver);

• Also at Çorak, indicated resource of approximately 340 million lbs. of zinc, (and inferred resource of 82 million lbs. of zinc); and indicated resource of approximately 141million lbs. of lead, (and inferred resource of 34.7 million lbs. of lead);

• Metallurgical testing has clearly in-dicated flotation to be the most app-ropriate method of metal recovery and concentration.

ÖZALTIN HOLDING’S CERRATTEPE CU-AU PORPHYRY PROJECTÖzaltın Holding, originally works for construction and energy sector, took a big step to the mining industry after the company won the tender for around 95.7 million TRY (54 million USD) in Feb-ruary 2012. According to the agreement, Özaltın Holding should start the produc-tion in three years after the operation license has been granted. The company should produce minimum 500,000 tonnes of run-of-mine and 10,000 tonnes blister copper annually, in the borders of Turkey. If Özaltın Holding could not meet

the requirements, all the exclusive rights will be transferred to the second highest bidder, Eti Bakır (Cengiz Holding) accord-ing to the tender agreement. According to the report prepared by Inmet Mining Corp., the previous owner of the project on 2007, during the expected mine life from 2009 to 2014, the company was planning to produce total 1.4 million tonnes at a grade of 8.7% copper.

REFERENCES1- “THE MINING INDUSTRY OF TURKEY” Anac, S., Tamzok, N., 2nd Balkan Mining Congress Book of Proceedings, 2007, p. 37-432- “MINERAL EXPLORATION: WHAT, WHERE AND WHY IN TURKEY” Yigit, O., 2011, Mining Turkey, vol.1, p.12-193- “MINING IN TURKEY” GBR Reports, 2012, Mining Turkey, vol.2, p.35-634- www.gentorresources.com/s/Turkish-Copper.asp?ReportID=526928

CONTACTS

Mining Turkey MagazineHead Office: A.Öveçler Mah. 1042 Cd. (Eski 4. Cd.) 1335. Sk. Vadi Köşk Apt. 6/8 Ankara - Turkey

Phone: +90 (312) 482 18 60

Fax: +90 (312) 482 18 61 Email: [email protected]

“All the project summaries in this article are collected from com-panies and/or press releases and up-to-date websites of the com-panies. Outdated or unconfirmed information about projects are excluded from the article.”

Mediterranean’s Taç Project

01 March 201328

Despite being said to be a city where Arabic origined Turkish citizens live, Siirt is a city which hosted many religions and whose history goes back to 3000 B.C. On these lands, where many civilizations, in-cluding the Hitites, the Urartu, Persians and the Ummayyad have ruled, farm-ing culture of fertile Mesopotamia at the South and the livestock feeding culture of the mountainous areas at the North have created a different blend. While travelling from Siirt to Maden Village (Madenköy) of Şirvan District, we notice herds of goats which provide the meat for Siirts famous “büryan kebab” and we noticed some Siirt peanut trees. The Siirt centrum is domi-nated by old valleys despite deeper and younger valleys in East and South East Anatolia, allowing for topography where agricultural activities and livestock feed-ing can be performed.

Although not as significant as in the neighboring city of Batman, Siirt’s most important underground resource is oil. This place is the 7th most important prov-ince of Turkey in terms of oil considering the exploration and production drillings. Also, another significant resource which

contributes to the region’s economy and development is Madenköy copper field; the 2nd largest copper deposit of Turkey run by Ciner Group, which lies within the borders of Şirvan town. Maden village is an Anatolian village with a population of 300 where it is thought that the exis-tence of ore is a lottery. The village can be reached with a 45 minute car drive. As you get closer to Madenköy, you start to see the occurance pillow lava near the road, and recognize that you are entering the units containing the mine geology.

THE HISTORY OF THE ESTABLISHMENTIt is known that Madenköy copper field has been operated since the ancient times. The historical mining equipment discovered with the new drilled galleries and the slag material found next to the village prove that the mine has been op-erated in the past.

It is known that the first prospection stud-ies at the field were realized in years 1947, 1958 and 1962. The first study conducted in detail was undertaken in 1970, the first reserve was discovered with 18,500 me-

ters of drilling conducted in 66 locations. In 1981, Outokumpu and MTA have pre-pared a joint feasibility study, revealing 24 million tons of reserve with a grade of 2.03%.

In 1985, the field was transferred to Etibank and mining preparations started under a commission including Preussag, Alarko and Etibank. However, this com-mission was dismantled in 1989 and it was tender by Etibank in the following years. Park Elektrik Üretim Madencilik AŞ has provided the highest bid with 7,929,000 TL in the tender and has acquired the site on 28.01.2004. The exploitation license of the field belongs to Park Elektrik Üretim Madencilik AŞ till 2037.

GEOLOGICAL PROPERTIES OF THE MINE AND ORE GENESISSiirt Madenköy Copper field is located on a fault zone between South-eastern Ana-tolia Side Folds tectonic units and Bitlis Metamorphic Massive. This zone, which is 30 - 60 km wide, elongates from west to east along a distance of 500 km. Along the belt, Sivrice (Helezür) - Elazığ, Maden - Ergani - Elazığ, Lice Mizak, Karadere -

Park Elektrik’s Siirt Madenköy Copper Field


01 March 2013 29

Diyarbakır and Madenköy - Siirt copper fields are found.

Siirt Madenköy copper mine starts with pyrite-chalcopyrite scattered claying and chloritization. From top to bottom, pyrite, pyrite + chalcopyrite, pyrite + chalcopy-rite + sphalerite, pyrite + chalcopyrite + magnetite or only magnetite diffused claying - chloritization and ends with oc-casional crack filling mineralization. The mineral mass dips 50° - 60° north. Miner-alization fully occurs within pillow lavas. 0.46% - 0.60% Cu is discovered during the analysis of decayed rock samples which contain scattered pyrite and chalcopyrite. The samples of Siirt Madenköy copper field analyzed with mineral microscopy reveal that main ore minerals are pyrite, chalcopyrite, magnetite, sphalerite, mar-casite, galenite, pyrrhotite, bornite, cov-ellite, chalcocite, valerit, bravoit, linneit, fahlerz, gold and silver while the main gangue minerals are quartz, chlorite, bar-ite, siderite and carbonate.

The ratio of the minerals in the mine bed vary between 0 - 2.75% zinc, 0 - 0.3% lead, 0.3 - 8.55% copper, 0.005 - 0.014% cadmi-um. Average grades are around 0.67% Zn, 0.059% Pb and 2.33% Cu.

The recent studies conducted on the mineralization at Southeastern Anatolia ophiolite belt have labeled Siirt Maden-köy Copper Bed as “Cyprus Type Massive Sulphite” bed.

RESERVE AMOUNT ESTIMATED ACCORDING TO JORC STANDARTSSince 2006, approximately 5 MT of identi-fied reserve is mined from underground to produce copper concentrate. It is esti-mated that 34 MT of reserve is left.

Current yearly raw ore production ca-pacity of the plant is approximately 1.5 - 1.8 MT. Considering the current reserve amount and production capacity, it is ex-pected that the site is operated for more than 20 years. Although the mine has been operated with underground mining methods since 2006, it is planned to con-vert to open pit mining in early 2013, fully

stopping underground mining.

UNDERGROUND DEPLETES, OPEN PIT PRODUCTION COMMENCES WITH INCREASED CAPACITYWithin the second quarter of 2013, the company plans to continue the mining activities with open pit mining. For the first phase studies of open pit mining project, comprising the five years, re-quired studies have been made, and the contractor companies have started over-burden removal. It is planned to cease underground mine production with the commencement of open pit produc-tion. Till then, all the ore which cannot be mined with open pit and left under-ground is tried to be mined. 1.5 MT - 1.8 MT of open pit production is targeted. General details of 5 year open pit project are as follows: The overall slope angle will be 45 degrees. Slope height is 10 meters, bench width is 7 - 8 meters and the bench slope is planned as 75 degrees. Depend-ing on the structure of the pit, these data can partially be changed. The current depth of the pit is +1,290 meters and at

the end of 5 years, it is planned to reach +1,115 meters. At the end of this 5 year open pit project, it is aimed to expand the project further. After the open pit, the ore left is anticipated to be mined with under-ground until +770 meter levels. To clarify long term mine planning geotechnical drillings are being conducted at site and for this purposes 10,000 meter geotechni-cal drilling was proposed. Data gathered from geotechnical studies and samples collected from drillings will be fed to mine planning and finally long term mine planning will be created. All these studies are being done by SRK Consulting and İstanbul Technical University.

Some of the mineralization in the field remains under a neighborhood of Maden village. At this point, it was required to remove the neighborhood. The company has applied to Ministry of Energy and Natural Resources for expropriation. The Ministry has declared a “Public Benefit Decision”, approving the expropriation, however, the company, later on, has cho-sen to sign agreements with the villagers without implementation the decision, and has purchased almost all of the re-quired parcels (86 parcels, 32 houses and 140,000 m2). By considering the long term mine planning, expropriation studies for 119 parcels, 58 houses and 466,839 m2 are ongoing and aimed to be completed in 2013.

The stripping ratio, whose calculations

Reserve Category

Tonnage (t)Cu

(%)Specific Gra-vity (t/m3)

Measured 31,182,000 2.26

4.05

Indicated 6,433,000 2.79

Measured +Indicated

37,615,000 2.34

Inferred 2,206,000 3.38

Total Reserve of the Project

39,821,000 2.40

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are made according to +1,000 meter open pit basis, is calculated as 1:7 - 1:7.5. For 2013, 15 Mm3 OB excavation is planned. For the following years after 2013, 10Mm3 OB excavation against 1.8 MT ore produc-tion will follow.

Since the commencement of mining at site, Company increased its production every year as sated below. With the de-cision of to continue mining with open cast, company revised raw copper ore production capacity and copper con-centrate production capacity accord-ingly. The Company have initiated the necessary investment in early 2012 both at raw ore production and concentrate production sites. The Company propose to produce 1.5 - 1.8 MT raw copper ore from open cast and fed to the concentra-tion plant, whose capacity has already increased to 1.8 MT. For 2013; 1.5 - 1.6 MT of ore to be fed to concentration plant and 105,000 tons copper concentrate will be produced.

PRODUCTION CAPACITY AND SALESAccording to the information provided, yearly raw ore processing and Cu con-centrate amounts until end of 2013 are given below;

With the capacity of 1,000,000 tons of ore per annum is produced from under-ground Siirt Madenköy becomes Tur-key’s largest producing metallic mine. The underground production costs are satisfactory for the Company at the mo-ment. Despite working in decayed zone in which the surrounding rock is clay and requires support, it is important that the Company is satisfied with the produc-tion costs considering that steel support is occasionally required every 1 meter.

In spite of these hard conditions, we are also informed that the production costs decrease every year.

1.8 - 2.0% Cu grade raw ore which is fed into the Processing Plant in Madenköy is processed into 20 - 22% copper con-centrate following crushing, screening, grinding and floatation operations. The processing plant is under operation since 2006. From 2006 to end of 2012, 400,000 tons of concentrate has been produced in the Processing Plant. Park Elektrik Üre-tim AŞ, which entered copper mining business in 2006, has produced solely concentrate copper till 2011. With a new decision, starting with 2011, the compa-ny has started to produce cathode cop-per. In line with the agreement between Karadeniz Bakır İşletmeleri and the Com-pany, when needed, concentrate copper is sent to the processing plant in Samsun for cathode copper production. All of the produced concentrate and the cathode copper are sold to abroad. The products are sent to İskenderun harbor, and later shipped to abroad. 105,000 tons of cop-per concentrate production is scheduled for 2013 as concentration plant capacity increased at the end of 2013.

UNDERGROUND MINING METHOD This mine is regarded as the toughest underground mine of Turkey since bar-ren rock is clay. When the company drill for blasting, the rock releases itself and the hole collapses after interacting with air and water. Hence, the company use world’s most advanced shotcrete ma-chines here. They performed the blast-ing, cleared the waste, and immediately they need to strengthen the gallery with shotcrete. Therefore, the most advanced technologies and mine equipment in Tur-key is utilized here. Production in the mine is achieved by fully mechanized system. Currently, the underground activity where mining continues is mostly carried out at the west wing of the mine. While along the main gallery and depending on the formation, steel support is used every 1 - 2 meters, again depending on the forma-tion steel mesh, shotcrete and rock bolts can be used. As production method, sub-level caving is applied. The gallery sections

are 25 m2 and the ore is approached with 10% inclination. The length of the tunnel is approximately 2,000 meters. The level distances are chosen as 20 meters at ap-proximately 200 meter ramp length. Be-tween the levels, 5 to 12 holes are drilled in a fan pattern into the ore using simba. The lengths of these holes vary between 15 - 20 meters, depending on the height of the level. The production panels are blasted by blasting the explosives in these holes, and production is achieved with collapsing hanging wall. In terms of gal-lery advancement, advance occurs as 3 - 4 meters depending on the formation. The ore mass accumulated as a result of blast-ing is removed with remotely controlled underground shovels (since the barren rock is clay, loading is remotely performed without any operator or worker entering into production panel), and loaded into remotely controlled underground trucks, and hauled to jaw crusher floor.

The ore, which is fed with underground trucks into the 350 t/h capacity jaw crusher located underground, after be-ing crushed, is sent to plant stockpile via band conveyors. Before the construction of underground crushing and band con-veyor system, trucks were used to trans-fer the ore to the stockpile. Increasing costs of underground truck haulage and the incurred losses in the past has played an important role in the decision to con-struct a band conveyor system. Today, with the jaw crusher system located 135 meter under the surface and a band con-veyor system of 650 meters, the prob-lems have been eliminated, and a more profitable production is achieved.

Madenköy underground mine con-tinues to work underground with 5 underground trucks, 5 underground shovels, 2 simbas, 3 jumbos, 5 under-ground cement mixers and 4 shotcrete machines.

Processed Copper Ore (Tons, wet)

Produced Cu Concentrate (Tons, wet)

2006 149,975 13,439.47

2007 574,204 52,586.65

2008 677,150 64,370.83

2009 733,615 63,137.96

2010 476,912 37,426.17

2011 949,731 77,510.04

2012 1,138,232 89,253.16

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PROCESSING PLANTThe ore, recovered as a result of mining activities are carried with belt convey-ors to the stock area (belts carry ore for 600 - 650 meters underground and 170 meters at the surface) while the ore pro-duced from underground is hauled with trucks. As of start of 2013, in the stock area, there are approximately 400,000 tonnes of ore ready to be processed. Daily processing capacity of the process-ing plant increased to 5,000 tonnes fol-lowing the capacity expansion studies. New crushers and belts are included in the system within the scope new capac-ity expansion work. Previously 80 cm conveyor belts were used in the plant, however, at the moment 120 cm capac-ity new plants are being used. With new cells and mills which have been added to the system, 5,000 tonnes of daily capac-ity has been achieved.

The ore in the stock area on the other hand is being fed into jaw crusher with the help of a shovel, and 80% of the ore crushed in the jaw crusher is grinded un-der 15 mm with cone crusher and closed screening circuit. The ore fed into the crusher from the stock area always has to meet an average 1,8% inlet grade. To achieve this condition, the feeder blends the different grade ore piled at different locations in the stock area. The remaining process is as follows:

The ore from the stock pile, which are fed into the crusher, are fed to two thin ore silos after being grinded under 15 mm. These ore are fed into 9 x 12 feet rod mills to be re-grinded to achieve a size of -1 mm in 80% of the ore. These ore pumped to cyclone tanks with pumps. The product pumped into the cyclones, sub cyclone (+1 mm) is sent into 2 differ-ent 8 x 10 feet rod mills, above cyclone (-1 mm) are sent into flotation. Parallel to the capacity expansion, new mills will be included in the system. For this expan-sion, a 100 m3 new mill is ordered. The ore, which is grinded into liberation size, is sent to flotation. Firstly, pH is arranged for the ore. In order to increase pH to 12 limestone and 3418 (as collector) is used. The reason for basic environment is to press the gangue mineral (pyrite) and to

float the copper mineral (chalcopyrite). This allows for the separation of chal-copyrite from pyrite and floats chalco-pyrite, resulting in copper concentrate. In the plant also slime distributor and sodium silicate is used to press the sili-cates. Sodium silicate is prepared as 10% solutions in the reactive tanks.

The ore, which are grinded into libera-tion point, arrive at the product con-ditioner at upper cyclone. In the con-ditioner, the ore is subject to flotation by the addition of limestone, collector, sodium silicate and foaming agent in 10 - 20 m3 cells. During flotation, copper particles sticking to air bubbles come up to the surface, spill from the cells and sent to other cells to be subject to same operations. The products which does not wanted to floated remain in the cells. These unwanted products are pumped to waste storage plant. The products which float in 20 m3 cells are sent to 10 m3 cells in other words 3 stage cleaning circuit. The products which float during first cleaning, are sent to second and third cleaning, respectively. After the third cleaning circuit, the floating prod-uct is sent to copper concentrate thick-ener. Meanwhile, the waste from 10 m3 cells is generally united particles. At this stage, regrinding scavenger circuit en-ters into the circuit. The waste from 10 m3 cells is pumped to regrinding mill to be grinded. The aim here is to liberate

the united particles and include them in the system. As a result of regrinding circuit, the floated materials are sent to 3 stage cleaning circuit, the possible losses are recovered, and the united particles are included in the system. The floating products are sent to 25 meter diameter copper concentrate thickener following the 3 stage cleaning circuit. The required concentrate copper ratio in this thick-ener is 20 - 22%. The wet concentrate copper in thickener is dewatered in press filter as a final stage and is stored in the concentrate copper stock pile in a dry manner. The copper concentrate which is sent to İskenderun Harbour for export is loaded to the trucks in 2 ton big-bags. The non-floating wastes in the cells are sent to waste thickener. The accumulat-ed material in the thickener is pumped to waste storage area, located 1 km from the plant. The material sent to waste storage area settles in time and the wa-ter contained within remains at the top. The water accumulated in the waste storage area is pumped to the plant for reutilization. Hence, the plant meets its daily water demand of 450 m3 using the treated water coming from waste stor-age area. One of the other important properties of the Madenköy Copper Plant is that it realizes fully mechanized production. Other than production unit, the data coming from every can simulta-neously monitored from the computers at the automation center. Using the

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installed Courier device, it is possible to reflect and monitor the analysis of in-let, concentrate, waste samples and the monitoring of the reactives. The elec-tronic weigh-bridge in the system allows for the calculation and automatic screen-ing of daily amount of production.

While Courier device gives approximate results, more precise results are obtained the laboratory in the Plant. In the labora-tory, copper, iron, lead, mercury, zinc and sulphur analysis can be precisely per-formed. Here, crushing, grinding, floata-tion experiments can be performed for raw ore, and also technological tests can be conducted. Also, screen analyses and limestone quality analyses can be per-formed in the laboratory in the Plant

II. CLASS WASTE STORAGE AREA AND ENVIRONMENTAccording to the information the com-pany received, the volume of waste storage area is 2,500,000 m3. A reha-bilitation program has been planned by Park Elektrik Üretim Madencilik AŞ and the project has been approved by Ministry of Environment an Urban Af-fairs. Following the rehabilitation stud-ies within the scope of the project, the capacity of the Waste Storage Area will be increased to 2,970,000 m3.

Also the company has acquired a posi-tive EIA for a new waste storage area with a storage capacity of 3,105,590 m3, which is to be commissioned with the capacity increase investments. The appli-cation projects are approved by Ministry of Environment and Urban Affairs. A ten-

der for the construction of Waste Storage Area has been made and the evaluations are still ongoing. The construction of the new Waste Storage Area is expected to be complete in year 2013.

In general, all permits regarding the en-vironmental issue in the mine area are taken and no permit related problematic conditions have occurred till now. We are also informed that, positive reports on studies made are received from Pub-lic Establishments. The civil works of the waste storage area in compliance with the specified criteria will be completed in 2013 and at the end of 2013 the new waste storage area will be taken into op-eration.

CURRENT STATE OF PRODUCTION AND INVESTMENT PLANSIn line with the increase in reserves and the positive global conjuncture in cop-per markets, the Company has expanded its capacity in 2011, increasing the raw ore processing capacity of the process-ing plant from 750,000 tons to 1,200,000 tons. Influenced by the capacity expan-sion that took place in October 2011, the production in 2011 has increased 107% compared to production in 2010.

As of October 2011, the company has reached a processing capacity of 1,200,000 tons of ore with an investment of 3,5 million EUR. The second phase of this investment has been completed at the end of 2012 and annual ore processing capacity increased to 1,800,000 tons. The mentioned capacity expansion of the Company takes place with the addition

of new mill and crushers to the process-ing plant.

Total budget of 2013 is around 236.5 MTL (app. 100 million EUR). 145 MTL of the to-tal budget will be spent for investment which covers box-cut excavation, expro-priation, waste storage area, equipment to transfer waste to storage area, river rerouting tunnel and new road building.

According to the statement made to the Stock Exchange by the company, in the first 6 months of 2012, the Company has achieved sales of 132 million TL. In this re-gard, in the first semester of 2012, 46,852 wmt copper production was achieved while 38,488 wmt of concentrate cop-per was sold. Park Elektrik Üretim AŞ has invested 125.5 million TL in Madenköy Project starting from the taking over the project till 30.06.2012. Other than that, approximately 3 million TL was spent for social responsibility projects.

SOCIAL RESPONSIBILITYTwo doctors and four health officers pro-vide health services to all villages in the area including Şirvan town as well as all villagers who contact the company via phone, with a fully equipped ambulance. The villagers can receive medical atten-tion from the medics at any time during the day. Since the region where the plant is located is at high elevation, the roads to the plant and Şirvan town may close during winter months. At this point, the working machines owned by the Com-pany work towards opening the closed roads, next to the Highway teams. The company machinery also helps the bus-ses and other vehicles stuck in the road. The reeves of the villages in the vicinity of the mine can ask for help to meet their demands. Our company prioritizes the needs of the people in the first place, and

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the mining activities in the second.

Other than these direct services pro-vided to the villagers, Park Elektrik have observed the healthcare center, primary school (Turgay Ciner Primary School), housings for gendarme stations, all con-structed by Park Elektrik Üretim Maden-cilik AŞ in place. Another important social responsibility project of the Company is to construct a vocational highschool in Şirvan in 2013. The company will con-struct the biggest vocational school in the region, including the workshops, in-frastructure and housing facilities. Park Elektrik Üretim Madencilik AŞ gives great importance to the employment of the people in the region. In this regard, almost all of the Madenköy people are employed in the mine. Also, the Company provides direct support to Madenköy Ltd. Şti., play-ing an important role in the capacity de-velopment of the people in the region. 22 of 28 construction equipment used in the mine are leased from the Madenköy Ltd. Şti. while 4 of them are leased from vil-lagers and only 2 of them are leased from outside of Siirt. Also, the Company sup-ports the employment of Madenköy Ltd. Şti. within the subcontractor companies.

CONCLUSION474 employees work in Madenköy Mine of Park Elektrik Üretim Madencilik AŞ, a company which is 452th among the 500 biggest industrial establishments of Tur-key and which is listed in İstanbul Stock

Exchange with 30% free floating. Such establishments generally work 300 days per year, and spend the remaining days for repair. However, in this plant, the re-pair work is done with spare units and therefore the activities continue non-stop 365 days. The efficiency of the plant work-ing non-stop reaches up to 96%. Accord-ing to the authorities loss of 4% is caused by unwanted blackouts and experienced seasonal problems.

Madenköy villagers’ opinion towards the mine is very hopeful. 120 people from Madenköy village work in the company. Park Elektrik Üretim Madencilik AŞ also pays attention to lease the some of the construction machines from the villagers and the company constituted by the vil-lagers, providing the villager further em-ployment opportunities. The employees other than those from Madenköy village are from the villages in the vicinity, Şirvan and Siirt. The transportation of these workers to the mine is provided by the Company, the workers work 24 hours per day in 3 shifts of 8 hours.

The only industrial establishment in Si-irt region is Madenköy Copper Mine. The establishment provides an employ-ment opportunity to approximately 1000 people, 500 of which work directly in the Company while the remaining 450 work in the subcontractor companies like OB excavation, security, etc. Considering that each household contains 7 - 8 people due

to the structure of the region, it turns out that the Company creates added value to 7,000 - 8,000 people. Siirt is another important issue to be considered. An in-dispensable capacity for Siirt is created considering the spare parts, food and transportation.

When you need to get a job done, the availability to choose is very low since there are a little number of companies providing the service. This situation is au-tomatically reflects in the prices. With the support of Siirt Governorship and Şirvan District, various courses are being opened in Public Training Centers. Since, this is the only establishment in the region; these courses given in Public Training Centers are aimed towards this establishment.

Despite the difficulties encountered in production, maximum attention is paid to occupational health and safety. It is men-tioned that no significant accidents have occurred in the Company, which has re-ceived the OHSAS 18001 certificate from an internationally accredited company. It is really interesting that no significant accidents have occurred in such a mine which is geologically very hard to exca-vate. The Company pays similar attention to worker wages. By this way, it is estimat-ed that the added value in the region is significant.

The company also gets consultant sup-port from national and international experts to achieve safe and sustainable mining. For processing, Outokumpu, for mine plan SRK and İstanbul Technical Uni-versity, for reserve reporting Micromine, for waste recovery Hacettepe University are among some of the establishments that the Company receive consultancy services from.

CONTACTS

Ramazan YönGeneral Manager Ciner GroupAddress: Sim Söğütözü İş Merkezi Söğütözü Cad. No: 14/D Beştepeler - Ankara - Turkey Phone: +90 (312) 287 65 55

Email: [email protected]

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Prime Ministry Investment Support and Promotion Agency of Turkey (ISPAT) is in charge of promoting Turkey’s investment opportunities to the global business com-munity and attracting FDI. ISPAT President Mr. M. Ilker Aycı reports directly to the Prime Minister. With its global network of advisors and a multilingual team com-posed of country and sector experts who have extensive experience in the private and public sectors, ISPAT serves as a refer-ence point for international investors and as a point of contact for all institutions engaged in promoting and attracting in-vestments at national, regional and local levels.

Mr. Aycı answered the questions of “Min-ing Turkey” on Turkey’s investment envi-ronment and provided an overview of the Turkish mining industry.

Turkey is promoting foreign di-rect investment (FDI), but what makes Turkey a desirable invest-ment destination for foreign companies?

(İA:) Turkey has plenty of advantages

as an investment destination for inter-national companies, which include its outstanding economic performance, dy-namic population and geo-strategically important position.

To begin with, Turkey has been growing remarkably with an average annual real GDP growth rate of more than 5 percent over the past decade, thus standing out as one of the fastest growing economies in the world. As the GDP levels more than tripled to USD 772 billion in 2011, up from USD 231 billion in 2002, GDP per capita soared to USD 10,444, up from USD 3,500 in the given period. Such a ro-bust economic performance has enabled Turkey to attract a tremendous amount of FDI, totaling more than USD 120 bil-lion over the past decade. Moreover, Tur-key’s impressive economic performance is expected to continue into the future. According to a recent report issued by the OECD, the Turkish economy is ex-pected to grow with an average real GDP growth rate of 5.2 percent between 2013 and 2017. As such, Turkey will be the fast-est growing economy among the OECD countries.

Turkey also has a population of 76 million people, the second largest as compared with the EU countries. Moreover, Turkey’s population is increasing by 1 million peo-ple every year, which of course makes it the fastest growing population in Europe. Most importantly, half of Turkey’s popula-tion is under the age of 30, making Turkey the country with the largest youth popu-lation in Europe, both in proportion and absolute figures. Considering the increas-ing rate of per capita income, as well as domestic demand, these figures are of high significance. As investors are faced with considerable challenges such as weak domestic demand and labor force in Europe due to ageing and shrinking

Turkey: The Rising Star in Global Mining

Interviewwww.miningturkeymag.com

01 March 2013 35

populations, Turkey offers excellent op-portunities with its growing, young and dynamic population.Last but not least, Turkey’s geo-strategic position allows investors to access lucra-tive markets around Turkey including Eu-rope, Russia and the MENA region with a combined population of one and a half billion people, a GDP of more than USD 25 trillion and a trade volume of more than USD 8 trillion, accounting for around half of the global trade. The geo-strategic position of Turkey provides a logistic ad-vantage, as well as access to diverse and rich markets, allowing investors to spread their risk.

What is ISPAT’s role in fostering FDI and increasing Turkey’s ove-rall competiveness and being a point of reference for internatio-nal investors?

(İA:) Prime Ministry Investment Support and Promotion Agency of Turkey (ISPAT) is the official organization for promoting Turkey’s investment opportunities to the global business community and provi-ding assistance to investors before, during

and after their entry into Turkey. ISPAT ser-ves as a reference point for international investors and as a point of contact for all institutions engaged in promoting and attracting investments at national, regio-nal and local levels.

Active on a global scale, ISPAT operates with a network of local consultants in Bel-gium, Canada, China, France, Germany, India, Italy, Japan, Luxembourg, Saudi Arabia, Spain, the Gulf states (Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates), the Russian Federation, the UK, the USA, and South Korea offering an extensive range of services to investors through a one-stop-shop approach, and assists them in obtaining optimum results from their operations in Turkey.

Working on a fully confidential basis, as well as combining the private sector ap-proach with the backing of all govern-mental bodies, ISPAT’s services include but are not limited to, providing market information, site selection, B2B meetings, coordination with relevant governmental institutions, facilitating legal procedures and applications, such as establishing

companies, incentive applications, and obtaining licenses and work permits. We consider investors as clients and client satisfaction is a top priority for us. Since we do also work under the auspices of the Turkish Prime Ministry, the Agency has a comparative operational freedom and flexibility.

The Agency was established with the aim of attracting investments required for Turkey’s economic development and growth. Our government sees FDI as one of the main components of eco-nomic development; to this end, ISPAT is relentlessly working to attract qualified investments, which boost employment, increase exports whilst decreasing im-ports, transfer technology to Turkey and bring added-value to the Turkish econo-my. ISPAT is also one of the most impor-tant stakeholders to improve Turkey’s competitiveness. As a point of reference for global investors, ISPAT is interacting with investors on a daily basis to facili-tate their business. Meanwhile, ISPAT is also working closely with the regulatory bodies to make Turkey more competi-tive.

01 March 201336

Does ISPAT charge for the servi-ces it provides to investors?

(İA:) No, our services are absolutely free-of-charge.

What is the current state of de-velopment of the Turkish mining sector?

(İA:) The Turkish mining sector’s total value of production stood at USD 11.3 billion in 2011, whereas it was USD 2.6 billion in 2003. Between 2008, the year of the economic downturn, and 2011, Turkey attracted around USD 144 million of FDI to its mining industry, while it saw USD 201 million of FDI in the same sector during the first 11 months of 2012 alone. There are more than 650 foreign mining companies in Turkey, while that number was 138 in 2004. Global companies such as Teck Resources, Inmet Mining and El-dorado Gold are continuing their opera-tions in Turkey.

Why is mining important for Tur-key?

(İA:) The mining sector provides the ne-cessary raw materials to industries such as automotive and construction, which are the backbones of our economic growth.The automotive industry produces 1 mil-lion cars annually and exports 730,000 units, mainly to Europe. The FDI stock rose

from USD 2.3 billion in 2002 to USD 9.2 billion in 2010. Meanwhile, the produc-tion capacity doubled from 800,000 cars in 1997 to 1.6 million in 2011. Ford, Toy-ota, Renault and Hyundai are increasing their capacity with new models; this cor-responds to an average yearly investment amount of USD 800 million between 2007 and 2011.

Similarly, the construction industry is also growing at a fast pace. The Turkish construction industry was valued at USD 35 billion in 2012, and 31 of the largest 225 construction companies are Turkish (Turkey is second only to China). The sec-tor is being fuelled by a number of large public-private sector partnership projects targeted at improving Turkey’s transport, healthcare and residential infrastructure. In particular, USD 400 billion of invest-ment is to be injected into urban renewal projects over the next ten years.

The mining sector also contributes to the development of rural areas through new investments in infrastructure and job opportunities. Although Turkey is rich in many minerals, it is still dependent on imports, particularly in value-added min-erals such as gold, copper and aluminum. Turkey is ranked 28th in the world in terms of total mining production, and 10th in terms of the diversity of mines produced. Only 13 out of the 90 types of minerals traded throughout the world have not so far been explored in Turkey. Turkey has sufficient unexploited resources in terms of 50 types of minerals out of 90; therefore it is thirsty for the unearthing and pro-cessing of its own mineral reserves.

Most of Turkey’s mineral reserves are buried underground. What is the country doing to uncover these reserves?

(İA:) Exploration activities can be divi-ded into governmental and private ope-rations. The governmental exploration activities are carried out by the General Directorate of Mineral Research and Exp-loration (MTA) under the auspices of the Ministry of Energy and Natural Resources. Meanwhile, private companies are also intensifying their exploration activities. In addition to several reforms made for the enhancement of the investment environ-ment in Turkey over the past decade, the government has recently amended the country’s mining regulations in order to facilitate the operations of national and international companies. Furthermore, the government has recently launched a new incentives regime that contains generous privileges for investors in

01 March 201338

the mining sector. Finally, ISPAT has set mining as a high priority sector and has been working to attract further FDI to the exploration and exploitation of the existing, as well as undiscovered, reser-ves in Turkey. Thanks to investor interest and the efforts of the governmental and bureaucratic bodies, we have observed a robust increase in drilling operations. In 2012, public and private ventures drilled 1.5 million meters -- 15 times that in 2002.

How is ISPAT aiding in the deve-lopment of the Turkish mining sector?

(İA:) As I mentioned before, mining is a sector of top priority for the Turkish go-vernment and my Agency. In addition to energy, machinery, automotive, petroc-hemicals and agriculture, ISPAT sees mi-ning as a strategically and economically

important sector, where we would like to see more investments. In this regard, we provide investors with sectoral informati-on and market analyses, facilitate license and incentive applications, and carry out promotional activities specifically desig-ned for mining companies, including bri-efings on the new incentives regime and regulations. We will be attending PDAC 2013 and hosting a “Turkey day” in Toron-to with the participation of relevant go-vernmental bodies, as well as companies operating in Turkey.

The mission of the Prime Ministry Invest-ment Support and Promotion Agency of Turkey (ISPAT) is to build up a network that would put Turkey on the agenda of the world mining community and shift focus to Turkish reserves for new projects, and consequently increase the produc-tion and wealth created in the mining in-

dustry. We also want to uncover the coun-try’s mineral reserves with new explora-tion projects and increase our raw mate-rial production in particular. Through this increase in production, the mining sector will be able to support the domestic in-dustry’s demand for low-cost and high-quality input.

What do you expect from PDAC 2013?

(İA:) We expect to reach as many in-vestors as possible and promote the Turkish mining industry and investment environment. We also want to give de-tailed information about the business opportunities in the mining sector, inc-luding the new incentives regime and the new mining law. To this end, ISPAT is organizing a Turkey Ex Po day at PDAC to provide information on mineral exp-lorations and geology of Turkey, Turkish Mining Law, licensing procedures and their implementation. In addition to rare earth minerals, the program will also fo-cus on success stories and opportunities in gold mining in Turkey. During the ses-sion, we would like to feature the Gene-ral Directorate of Mineral Research and Exploration (MTA), the General Directo-rate of Mining Affairs (MİGEM), and Eti Mine Works General Management (ETİ MADEN). In the afternoon session, pri-vate companies will make presentati- ons on their operations and share their success stories.

What incentives does Turkey of-fer for the mining industry?

(İA:) With a robustly growing economy and a young and dynamic population, Turkey offers lucrative investment op-portunities for global investors. While international investors can find a secure and favorable investment climate in Tur-key, they can also equally benefit from all incentives offered to local investors. Once an international company has been established in Turkey, then that company is considered a local company since it has a legal entity in Turkey. The new law gu-arantees equal treatment to all investors without differentiating between local and

01 March 2013 39

international investors. With the latest incentives regime, companies can now benefit from many incentives including favorable tax deductions, special invest-ments zones, land allocation, exclusive R&D and innovation support, training of workers and so on. The new incentives regime aims to reduce the current acco-unt deficit, boost production, and reduce dependency on imported intermediate goods. This entails increasing investment support to Turkey’s lesser developed regi-ons, improving efficiency in industry and logistics, and investing in mid and high technologies.

Effective as of January 1, 2012, the pro-gram offers investors VAT exemption and corporate tax reduction, as well as social security premium support, interest pay-ment support and land allocation. The in-centives regime comprises four different schemes: general, regional, large-scale and strategic investment incentives. The government has redefined the regions across Turkey, decreased the minimum fixed investment amount for large-scale investments and introduced incentives for strategic investments in sectors with a poor balance of trade. As for the incen-tives for strategic investments, the main goal is to support sectors where there is considerable trade deficit, offering strong support regardless of region, and so re-duce the current account deficit. The min-ing sector is also one of the prioritized sectors under the new incentives regime, and as such, mining sector investments can benefit from additional incentives over and above what is available for other sectors.

Are there any particular advanta-ges that make Turkey more com-petitive than other countries, in particular with regards to the le-gal framework?

(İA:) As I said, Turkey has recently amen-ded its mining regulations in order to att-ract more domestic and foreign private investors to the industry. According to Policy Potential Index ,which done by the Frasier Institute and measures the effects of government policies on the investment

attractiveness, Turkey considered third most investment friendly destination for mining companies after Canada in 2010. The Turkish mining law divides minerals into six groups including precious me-tals. The exploration period is currently 7 years, and after this, the mining acti-vities can begin following the issuance of an operational permit. Over the past decade, Turkey has embarked on a comp-rehensive structural reform program in order to improve its investment climate. A new FDI law was introduced in 2003, the corporate tax rate was decreased to 20 percent down from 33 percent, and all bureaucratic hurdles were removed, thus the legal framework was reformulated in favor of investment. The reform process has yielded results, making Turkey the second biggest reformer of its restrictions on FDI among the OECD countries. Today Turkey is a safe haven for investors and a unique investment destination in its regi-on, thanks to the harmonization of regu-lations with the European Union, a single party government that has launched significant structural reforms since the banking crisis in 2001, and a distinguis-hed economic performance and political stability.

Turkey is the 8th largest steel producer in the world. Which are Turkey’s main export markets for steel?

(İA:) One of the key areas of investment in Turkey is certainly the iron and steel industry. As the world’s 8th largest steel-maker, Turkey has produced more than 35.5 million tons of crude steel in 2012. That also makes Turkey the 2nd largest steelmaker in comparison with the 27-EU countries. Turkey’s total iron and steel exports, including the articles of steel and steel pipes, reached USD 10.8 billion in 2011, up 28.85 percent year-on-year from USD 8.44 billion. EU is the main export

market, followed by the Middle East.

What is your final message to potential partners, visitors and investors?

(İA:) I believe that the opportunities in Turkey’s mining industry are not fully known by global investors as they are not well informed about Turkey, its invest-ment environment and rich mineral reso-urces. Nonetheless, the recent increase in FDI in mining, numerous projects carried out by domestic and foreign investors are indicative of Turkey’s success as a rising star in global mining. As president of the Prime Ministry Investment Support and Promotion Agency of Turkey, I invite in-vestors to join Turkey’s rise.

The global economy is undergoing a profound transformation; the center of the world economy is shifting towards emerging economies like Turkey. And Turkey is differentiating itself with its rich resources, stable economic growth and liberal economic policies embracing in-vestors from around the world. So this is the right time to invest in Turkey to seize the opportunities in mining, as well as in other industries.

I and my team will be available during PDAC 2013 in Toronto and you may con-tact us during the conference or anytime you wish. ISPAT is as close to you as the enter key on your computer or smart phones. For any questions and informa-tion requests on investment issues, you may reach ISPAT via e-mail at [email protected]. You may also access our industry reports and information on Turkey’s in-vestment environment and incentives through our official website at www.in-vest.gov.tr.

CONTACTS

M. İlker AycıPresidentRebuplic of Turkey, Prime Ministry Investment Support & Promotion Agency (ISPAT)

Phone: + 90 (312) 413 89 00

Website: www.invest.gov.tr

01 March 201340

Turkey Takes a Leading Role in Natural Stone ReservesINTRODUCTIONSince early times, people have shown desire to use natural stone in their build-ings and places of residence. The improv-ing standards of living over time have driven people to use natural stone for its style and durability. This material gradu-ally has become a symbol of wealth and prosperity. The contemporary admira-tion for natural stone at an age of ma-chines and technology is an attribute to this fact.

As nations of the Alp-Himalayan Belt; Turkey, Portugal, Spain, Italy, Greece, Iran and Pakistan possess large calcareous stone reserves (marble, limestone, trav-ertine and onyx). Due to its geographical position on the Alpine Belt, Turkey has many assorted types and large volumes of marble reserves. Furthermore, Tur-key’s developing industry and produc-tion technology has placed the country amongst the leading stone processing nations. The fact that the natural stone sector in Turkey has managed to indus-trialize in a relatively short period has helped the sector raise to the level of the leading sectors in terms of exports, industrialization and employment.

Turkish marble has been widely used in world famous places due to its rich color scales, different patterns and excellent texture quality. Famous places where Turkish marble is used are shown below.

a) In the church of St. Peters entrance hall, which is one of the most important churches in Vatican, marble from Afyon-İscehisar has been used in columns and coverings.

b) In the White House, the USA, Elazığ cherry has been used in the place where the press statements are made. Elazığ

Cherry marble has also been used in France Parliament Building, the US House of Representatives.

c) The Olympic Village in China is covered with Diyarbakır marbles.

d) The German and French Statehouses and the United States Congress Building. In Disneyland, the most famous amuse-ment park in the world, 18,000 m2 of Turkish marble was used.

e) In addition to these, many luxury ho-tels, airports, schools, hospitals, cultural and business centers preferably used Turkish marble in their floor coverings.

COMMON CHARACTERISTIC PROPERTIES OF TURKISH MARBLESTurkey has one of the world’s largest nat-ural stone reserves, which is considered to be excellent quality and exclusive due to great variety of colors and textures patterns. Turkey is among the world’s most important natural stone manufac-turers with its huge reserves and well de-veloped processing industry. The prop-erties of Turkish marble are seen below.

• Free from any cracks or other defects • There is a wide range of colors, which

allows a wide range of choice. About 400 different color and texture quali-ties are available.

• Homogenuity of the resources allows the yield of big blocks.

• Uniformity and consistency in quality • Pattern decorative arrangements of

colors and crystal composition are possible

• Good technical properties result in natural resistance to air pollution, wear and dirt.

NATURAL STONE EXPORT FROM TURKEY Natural stone exports have developed rapidly in the last ten years. Turkish stone can be found in the buildings and side-walks of 173 different countries. Since 2000 Turkey’s natural stone exports in-creased significantly. According to the statistics seen in Table 1 below received from the Istanbul Exporters Association, the total value of natural stone exports reached $1.9 billion in 2012. More than one third of Turkish natural stone exports go to the China. The increase in demands in the world market and the fast pace of the export has played a very important


Countries

2009 Value

(USD x million)

2010 Value

(USD x million)

2011 Value

(USD x million)

Change (%)

China 352.6 595.0 635.4 38.2

The USA 207.7 218.8 236.3 8.0

Iraq 33.0 71.2 81.7 14.7

Saudi Arabia 43.2 45.8 62.5 36.3

United Kingdom

51.1 47.9 45.7 -4.5

Canada 33.1 44.8 43.2 -3.5

France 26.2 32.4 42.3 30.6

India 34.7 44.2 37.5 -15.2

Israel 26.3 31.0 35.2 13.7

Arab Emirates

26.0 22.2 29.3 32.1

Russia federation

11.8 17.9 28.2 58.1

Germany 21.4 21.8 27.0 23.6

Syria 19.4 23.9 25.1 5.1

Azerbaijan 20.5 17.7 24.7 39.7

Australia 15.9 16.8 22.2 31.8

Italy 19.4 18.9 18.4 -3.0

Taiwan 13.1 12.1 17.7 46.2

Spain 18.4 17.4 16.7 -3.7

Turkmenistan 17.1 20.7 15.3 -26.2

Singapore 7.2 6.8 10.5 53.1

Other 20 countries

998.2 1,327.4 1,455.0 9.6

Total 1,232.4 1,560.2 1,663.7 6.6

Table 1: Country wide distribution of the exported natural stones of Turkey

01 March 2013 41

role in this sense. The export and pro-duction of natural stone products have an important share in the mining sector that has improved in parallel to the in-vestments in recent years (Figure 1).

The most value-added-product in ex-ports is processed marble which is cut and polished marble. Processed marble ranks first with a 813 million USD export value in 2011. Block marble is in the sec-ond place with 688 million USD.

NATURAL STONE POTENTIAL OF TURKEYIn terms of natural stones and especially marble, Turkey has rich resources since it is located in the Alpine orogenic belt. Turkey has been one of the oldest mar-ble producers in the world with its 4.000 years of production history starting from the Marmara Island. Turkey has a signifi-cant place in terms of world natural stone reserves and is increasing its share in the international markets every year with a variety of products. Turkey is producing various kinds of stones like granite, onyx, limestone, basalt, andesite, conglomer-ate, breccia, magmatic rocks, slate stone, diabase and travertine that are with a

special emphasis on marble. Turkey mar-ble reserves are shown Figure 2.

Turkey’s total natural stone reserves including proven, likely and possible reserves are about 5.2 billion m3¬ 13.9 billion Tonnes. According to some esti-mates, Turkey has 33% of the world total natural stone reserves (Table 2). In accor-dance with some sources, this resource is estimated to be able to meet the world’s natural stone need for 80 years.

NATURAL STONE POTENTIAL OF REGIONS As a result of its geological location, Tur-key possesses very rich, natural stone reserves in various colors and patterns. There are approximately 3,872,000,000 m3 of workable natural stone, (Table 3) and 2,720,000 m3 workable limestone and 995,300 m3 workable travertine (Table 4) and 1,307 m3 onyx reserves in Turkey.

244

0

200

400

600

800

1000

2006 2007 2008 2009 2010 2011

739

339

844

439 425

700

888

49 73 107

643

772688

814

146 161

39

Blok Marble Processed Marble Others

Figure 1: Export of the Turkish natural stone

Figure 2: Natural stone reserves in Turkey

Table 2: Turkey’s natural stone reserves and share Turkey’s natural stone reserves in the world

Table 3: Workable natural stone reserves in Turkey and distribution of the regions

Reserves Reserve Quantity (m3) x 106 Reserve Quantity (Ton) x 106

Proven 589 1,590

Likely 1,545 4,171

Possible 3,027 8,172

Total Potential 5,161 13,934

Turkey33%

World 67%

Region LocationWorkable Reserve

(x1000 m3)

Marmara Balıkesir 1,300,000

Bursa 135,000

Kırklareli 33,500

Aegean Afyon 135,000

Aydın 9,000

Izmir 1,500

Muğla 181,000

Kütahya 200,000

Uşak 500,000

Central AnatoliaAnkara 2,000

Eskişehir 960,000

Kırşahir 165,000

Niğde 250,000

Grand Total 3,872,000

Marmara38%

Aegean26%

01 March 201342

Region LocationLimestone Reserve

(x1000 m3)Region Location

Travertine Reserve (x1000 m3)

Marmara

Adapazarı 3,500 Marmara Bursa 1,200

Balıkesir 7,500

Bilecik 640,000

Bursa 240,000

Aegean

İzmir 175,000

Aegean

Afyon 120,000

Manisa 500DenizliBurdur

500,00075,000

Mediterranean

Adana 7,000

Central Anatolia

Çankırı 210,000

Burdur 2,000 Nevşehir 100

Hatay 60,000 Sivas 75,000

Central Anatolia

Ankara 16,000Black Sea Bolu-Karabük 10,000

Eskişehir 475,000

Kayseri 3,000

Konya 70,000

Black Sea Bartın 1,000,000

East Anatolia Elazığ 20,000

Southern East Anatolia

Diyarbakır 9,000

Total 2,720,000 Total 995,300

Table 4: Workable limestone and travertine reserves of Turkey

It’s known that there are over 250 kinds of stones with different colors, tex-tures and designs in Tur-key. The natural stones sector today, with its high production, export potential and domestic market consumption, makes an important contribution to the Turk-ish economy. There are more than 2000 quar-ries, small and medium sized 2,000 factories and 9,000 workshops and also 300,000 workers in the natural stone sector. 27% of the quarries are situated in the city of Balıkesir, 24% in Afyon, and 11% in Bilecik as summarized in Table 5. Around 90% of quarries are located in the west of Anatolia, mainly in the Aegean and Marmara Regions. The distributions of the companies which have got marble licenses according to the regions are shown in Figure 3. The

Aegean region takes the first place in the list of the marble production licenses. There are three important regions for marble resource in the Turkey, the first is south and west of the Marmara sea, the second is in the south-central Turkey and the third is in south west Turkey, espe-cially around Yatağan in the Muğla and Aydın provinces.

NATURAL STONE POTENTIAL OF AEGEAN REGION The Aegean Region has very rich natural stone re-serves and approximately 70% of the total natural stone reserves of Turkey are in this region. Turkey’s is known to have a total of 5 billion m3 natural stone reserves and approximately 3.5 billion m3 of this reserve

exists in the Aegean region. The natural stone quarries are located especially in Balıkesir, Afyon, Denizli and Muğla prov-inces (Table 6).

NATURAL STONE POTENTIAL IN AFYONThe Afyon place is known as one of the most important natural stone produc-tion and processing centres in Turkey. Afyon-Iscehisar’s natural stone originate from limestone rocks that metamor-phosed under heat and pressure. The main mineral component of Afyon Isce-hisar marble is calcite (more than 90%). The sizes of calcite crystals are 0.2 - 0.5 mm, and between 1,000 and 1,700 crys-tals per cm2 area.

Afyon province has 135,000,000 m3 of workable resources and this means 3.5% of workable natural stone resources of Turkey. Most of the Afyon province natu-ral stone and processing plants are locat-ed three areas, these areas are Iscehisar, Susuz Boğazı, and the Afyon industrial region. There are over 400 marble pro-cessing plants of different sizes operate in Afyon and these companies are pro-cessing a great variety of marbles from the Afyon quarries and also from other parts of Turkey. Many of these plants are equipped for slab production with sim-ple machinery, like splitting machines and 1/3 of the block marble production of Turkey is made in Afyon-Iscehisar. Ac-cording to an MTA report, Afyon white marble reserves are 2,500,000 m3 and Afyon Tigerskin marble reserves are 3,600,000 m3.

In Afyon-Iscehisar, over 200 marble pro-cessing plants are operating with at least one marble gang saw or one S/T (disc-cutter). The plaque marble production of Afyon-Iscehisar region consists of

Provinces Quarries (%)

Balıkesir 27.00

Afyon 23.60

Bilecik 11.14

Denizli 7.58

Bursa 6.92

Muğla 6.40

Eskişehir 4.03

Uşak 2.37

Kırklareli 1.90

Kırşehir 1.18

Others11%

Table 5: Distribution of the natural stone quarries in Turkey

Figure 3: According to the regions the distribution of the companies

Province Reserves (million m3) %

Balıkesir 1.850 35.8

Denizli 652 12.6

Afyon 629 12.2

Tokat 410 7.9

Çanakkale 252 4.9

Muğla 200 3.9

İzmir 120 2.3

Other 1,054 20.4

Total 5,167 100

Table 6: Natural stone reserves of Aegean Region

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01 March 201344

19% of the Turkish plaque marble pro-duction. These plants employ totally 1,678 personnel and breaking down of them is 31 engineers, 33 technicians, 60 foreman and 1,552 workers. Moreover, at these quarries there exist 40 gang saw, 89 S/T disc-cutter, 47 polishing machines, and 26 tile line in the Afyon region.

NATURAL STONE POTENTIAL IN DENİZLİDenizli province is located in western of the Turkey. Denizli is the second prov-ince in line after Balikesir in terms of the total visible marble reserves of Turkey, but it is third after Balikesir and Afyon in total marble reserves of Turkey. The region of the Denizli has the richest and excellent travertine reserves. These travertines are known in the world as Denizli travertine. There exist 52 trav-ertine quarries and 90 factories which are located about 10 - 20 km away from the Denizli. Travertines are main export products for Denizli. Produced traver-tine has been used for cladding of side-wall and other internal and external us-age in modern building, structures, wa-ter pools, other accessories for modern civil constructions. Both their colors and physical properties vary from location to location in the study area. The Deni-zli has widespread travertine reserves one of the famous one is Pamukkale-Karahayıt and the second is Ballık area travertines since Late Quaternary. The total area occupied by modern and old travertines is more than 100 km2 and its thickness can reach up to 60 m.

Turkey has a big share of the travertine production in the world. The United States comes first among exporting countries. Turkey provides about 50% of travertine consumption of the United States. The richest travertine reserves of Turkey in Karacasu, Kocabaş and Sa-rayköy within the borders of Denizli prov-ince. There are a large number of quarries which had been operated in the antique ages around Pamukkale, Yeniceköy and Kocabaş (Table 7). The large travertine quarries of Denizli are Hayrettin Noce, Bianco Rosaa and in Kaklık place which are Kömürcüoğlu’s quarry and Alimoğlu’s quarry.

NATURAL STONE POTENTIAL IN BALIKESİRBalıkesir province is located in western of the Turkey. Balıkesir is the first province in terms of the total visible natural stone reserves of Turkey. There are large num-ber of quarries and plants which are op-erated by some companies in Balıkesir. Marble quarries and reserves in Balıkesir (Table 8).

NATURAL STONE POTENTIAL IN UŞAKUşak province is located in western of the Turkey. The potential of the marble beds in Uşak are Karahallı Country-Duraklı Village and Hacı Hüseyin Village. Uşak province’s workable reserves are 500,000 m3. The best natural stone products of the Uşak province are Uşak Yellow, Uşak White and Uşak Green. These natural stone areas are shown in Table 9.

NATURAL STONE POTENTIAL IN EASTERN BLACK SEA REGIONThe Eastern Black Sea region has rich potential in terms of a variety of mines, mainly metallic mines. The region has approximately 435 million Tonnes natu-ral stone reserves. The most of these reserves is particularly granite and the approximate value of this marble reserve is 90 billion USD. Giresun, Ordu, Rize and Trabzon take the first places as in the number of the marble quarries and the marble production. Giresun is first with 116 million m3 probable reserve and fol-lowing Ordu, Rize and Trabzon province (Table 10).

NATURAL STONE POTENTIAL IN THE SOUTH EAST

NATURAL STONE POTENTIAL IN DİYARBAKIRDiyarbakır province is located in the south east of the Turkey. Natural stone of the Diyarbakır layers, which originate from limestone, are geologically indicat-ed by different colors, particle sizes and mineral compositions. Diyarbakır lime-stone is becoming increasingly popular for both interior and exterior building ap-plications in the local area in south east Turkey, being easy to cut and shape and suitable for many purpose. Besides lime-stone formation, Diyarbakır - Karacadağ has 10,000 m2 basalt areas. In Diyarbakır, the major source rocks are Hazro, Hani, Çermik and Çüngüs tows. In Diyarbakır, there are over 20 marble quarries. These quarries produced 82,390 m3 block mar-ble and 36% (30,390 m3) of their produc-tion is exported.

Table 7: Marble quarries and reserves in Denizli

Region TypeReserves x1000m3

Tavas - Vakıfköy - Çamova Tepe Marble 72,000

Kocabaş Villiage Travertine 25,000

Kocabaş - Etence Tepe Travertine 7,500

Kocatepe - Acadere -Zeytinlieğrek

Travertine 10,000

Region Product nameReserves x1000m3

Marmara Island Marmara White 1,200,000

Çayüstü Village Kumru Tuyu 40,000

Manyas-Koçoğlu Village Manyas White 40,000

Ayvalık-Bağyüzü Village Ayvalık Granite 300

Bigadiç-Çayüstü Village Onyx Marble 7

Table 8: Marble quarries and reserves in Balıkesir

Table 9: Marble quarries and reserves in Uşak

Region Product name Geological Reserves m3

Karahallı, Duraklı village

Uşak Green Marble 600,000

Hacı Hüseyin Village Yellow Marble 600,000

Hacı Hüseyin Village Uşak White Marble 400,000

Akhisar - Efkafteke Village

Aegean Brown Marble

25,000

Table 10: Probable Reserves in Eastern Black Sea

Province Probable reserves (x103 m3)

Giresun 115,965

Ordu 64,025

Rize 32,100

Trabzon 14,760

Bayburt 9,840

Gümüşhane 9,300

Total 245,990

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01 March 201346

a) Elazığ Cherry b ) Akşehir Black c) Afyon White d) Denizli Travertine

Figure 4: Elazığ cherry, Akşehir black, Afyon white and Denizli travertine

NATURAL STONE VARIETIES IN TURKEYTurkey, due to its location in the Alpine-Himalayan orogenic belt, has numerous natural stone deposits. Turkish natural stone industry has proved its consisten-cy and continuity in the commercial are-na by supplying more than 250 kinds of stones with different colors and patterns. Approximately one hundred of these natural stone are well known in the in-ternational market and are regularly de-manded. The best marble reserves are lo-cated in Afyon, Eskişehir, Elazığ, Balıkesir, Denizli, Muğla and Çanakkale. The best known varieties of Turkish marble are shown in Figure 4.

I) Elazığ Cherry: Elazığ cherry is made of serpentinized and carbonated ultra-basic rocks. It is found as tectonic brec-cia and located around Elazığ - Güleman / Altınoluk village. Red green pebbles are attached with the same colored ce-ment. Recommended usage of area can be used in interior exterior plating, wall cladding and decoration.

II) Akşehir Black Marble: This marble is showing catalastic texture in general and has white calcite veins and brown styo-liths. Calcite crystals of sizes between 0.9-1.9mm and also found as bands. It can be used in interior exterior cladding and decorative arrangements. It is suit-able to make block and plate and can be easily cut and polished. It is located around Konya - Akşehir in Turkey.

III) Afyon White: This marble is a classical metamorphic and consists of calcite crys-tals texture and also contains occasional yellow veins. Its suitability for making blocks, plates, cutting sides and corners,

polishing and the shaping and the cut-ting rate are all excellent. There isn’t any risk of rusting. It can be utilized in inte-rior, exterior plating, statues, decorations and monuments. Block dimensions vary between 50 x 1.20 x 0.80 m and 3.0 x 2.0 x 1.2 m. There are quarries which can pro-vide larger blocks if desired.

IV) Denizli travertine may be white, light yellow and dark yellow colored. It is usually found over clayey, sandy and alluviums. Denizli Travertine consists of 30 - 100 micron grain sizes and micritic calcite grains of 1 - 4 microns. It has a porous texture. The Denizli travertine can be used in interior and exterior clad-ding, floor covering and decoration. The travertine is suitable to be processed in blocks and plates and offers good shape-ability. The marble is normally polishable. There is no rusting risk. Block dimensions vary between 1.50 × 1.50 × 0.80 m and 2.40 × 2.40 × 2.00 m. Larger blocks can be obtained from the portions where the fissure intervals are very wide.

REFERENCES1- Ayhan, M,. Topal, E,. Akkoyun, Ö,. 2005. Diyarbakır Mermer Sektörünün Türkiye Mermer Endüstrisindeki Yeri ve Çözüm Önerileri. Dicle University Mining Engi-neering Department.2- Çapik, M., 2010, Natural Stone Produc-tion with Emphasize on Turkey. Technical Project Work, Montanuniversitat Leoben, Austria,3- Çapik, M., Yılmaz A.O., Karaca, Z,. 2012. An Overview on Natural Stone Produc-ing Companies in Turkey, Mersem2012, Proceedings of the Eighth International Marble and Natural Stone Congress of Turkey.13-15 December 2012 Aftonkara-

hisar, Turkey, pp. 249-258.4- Çelik, M.Y., Sabah, E., 2008. Geologi-cal and Technical Characterization of Is-cehisar (Afyon -Turkey) Marble Deposits and the Impact of Marble waste on envi-ronmental pollution. Journal of Environ-mental Management 87 pp, 106 - 1165- DPT, 2006 Dokuzuncu Kalkınma Planı 2007-2013, “Madencilik Özel İhtisas Komisyonu Raporu”6- Kuşçu, M., and Bağcı, M., 2003. Afyon Mermer Sektörü ve Türkiye Mermer Sek-töründeki Yeri. Türkiye IV. Mermer Sem-pozyumu (Mersem’2003) Bildiriler Kitabı 18-19 Aralık 2003 Afyon, pp 126 - 138. 7- Ozkul, M., Varol, B., Alçiçek, M. C,. 2002. Depositional environments and petrog-raphy of Denizli travertines. Bulletin of the Mineral Research and Exploration, 125, pp, 13-29. 8- RTME; 2012 Republic of Turkey – Min-istry of Economy, Natural Stone Sector. www.economy.gov.tr 9- Stone 2006 Stone Sector, The Interna-tional Stone Industry and the Standing of Turkey, p,78.10- www.immib.org.tr2013 11- www.stoneinturkey.com/2013 12-www.cbi.eu/download/mid_pre-view/3909.pdf CBI market survey: The Natural Stone and Stone Products 13- Market in the EU. 19/02/2010.14- www.tummer.org.tr/15- www.stonecontact.com/Main.aspx?pid=ProductSearch&countryID=209/201316- www.turkishstones.org/ts/2013 17- www.migem.gov.tr/2013 18- Uyanık, 2009 Natural Stone, İGEME-Export Promotion of Turkey19- Yagız, S., 2006. Overview on geo-mechanical assessments of Denizli trav-ertines in Turkey. The Geological Society of London, pp 384-391.

CONTACTS Mehmet Çapik Karadeniz Teknik Üniversitesi, Müh. Fak, Maden Müh. Böl., 61080, Trabzon - TurkeyPhone: +90 (462) 377 40 57 Fax: +90 (462) 377 35 33 E-mail: [email protected]

01 March 201348

INTRODUCTIONAntimony is a silvery, white, brittle, crys-talline solid that exhibits poor conduc-tivity of electricity and heat. It has an atomic number of 51, an atomic weight of 122 and a density of 6,697 kg/m3 at 26 oC. Antimony metal, also known as ‘regulus’, melts at 630oC and boils at 1380 oC. Antimony is technically classified as a metalloid, or semi-metal, meaning that it possesses both some properties of met-als and some of non-metals. Antimony has four allotropes; a stable metallic form, and three meta-stable forms which are: explosive, black and yellow. Yellow antimony, which only occurs at tempera-tures below -80°C, is extremely explosive. Antimony has an abundance of 0.2 to 0.5 ppm in the Earth’s crust. It is sometimes found free in nature but its main source from the many minerals of antimony is black stibnite (Sb2S3). The element also occurs as white valentinite (Sb2O3), as well as antimonides and sulpho-anti-monides of metals like lead, copper and silver. Primary antimony minerals can be separated into three categories - sulfides, oxides, and mixed sulfides-oxides as fol-lows ;

More than 70% of antimony mine pro-duction is converted to antimony tri-oxide (some used as feed for metal and other product output), which is used

principally in flame retardant formula-tions for textiles, plastics and rubber, and in catalysts for production of polyethyl-ene terephthalate (PET).

The principal use of antimony metal is as an ingredient in alloys where it imparts hardness, strength, anticorrosion and other properties. Antimonial lead is used chiefly for automotive and stand-by bat-teries. Other uses are in solders, ammuni-tion, corrosion resistant pipes and cable sheathing .

CONSUMPTIONAntimony consumptions by end uses and main marked drivers are given in the below table. This table shows us anti-

mony trioxide and antimony metal con-sumptions. When we are reading below table we have to consider that these are the consumptions of antimony products with minimum 99% Sb content and over. When we carefully analyze the table, it shows us that antimony consumption increased average 3.1% in last decades, and within this period we experienced a world finance crises that affected all the markets.

PRODUCTION AND PRICESAccording to the U.S. Geological Survey China is by far the biggest antimony pro-ducer in the world and is likely to domi-nate the market for more than 100 years. In 2011 China produced 150,000 metric tons Sb equivalent antimony ore, by ac-counting for almost 90% of world total production.

The important question here is how Chi-nese dominance is affecting the market? It is obvious that changes in Chinese government policy are the most impor-tant factor affecting the market espe-cially prices. The Chinese government is also trying to improve the environmen-

Minor, Critical and Strategic: Antimony


Sulfides Chemical Formula %Sb

Stibnite Sb2S3 71.7

Tetrahedrite 3 Cu2S. Sb2S3 29.8

Jamesonite 2 PbS. Sb2S3 29.8

Oxides Chemical Formula %Sb

Senarmontite Sb2O3 83.5

Valentinite Sb2O3 83.5

Cervantite Sb2O3. Sb2O5 79.2

Stibiconite H2 Sb2O5 74.8

Mixed Oxides-Sulfides Chemical Formula %Sb

Kermasite 2 Sb2S3. Sb2O3 83.5

2000 2010Compound Annual

Growth Rate (%)Main Market Driver

Non metalllurgical

Flame Retardants 70,000.0 103,500.0 4.0 Polymer Demand

Plastic Catalyst 6,000.0 11,400.0 6.6 PET Demand

Heat Stabilizer 1,400.0 2,600.0 6.4 PVC Demand

Glass 16,000.0 1,700.0 -20.1 CRT and Solar Glass

Ceramics 1,700.0 2,500.0 3.9 Construction

Others 1,500.0 1,840.0 2.1 General Economic Growth

Sub Total 96,600.0 123,540.0 2.5

Metallurgical

Lead-Acid Batteries 40,000.0 53,000.0 2.9 Automotive Production, replacement

Lead Alloys 11,000.0 23,000.0 7.7 Construction

Sub Total 51,000.0 76,000.0 4.1

Total 147,600.0 199,540.0 3.1

Source : Roskill

Flame Retardands

( for Plastics) 72 %

Glass 9 %

Batteries 19 %

01 March 2013 49

tal impact of the industry, when we add the concerns over diminishing reserves in China; this leads them to suspensions and closures at mines and smelters. In 2010 China closed some of the mines and smelters, this caused a supply prob-lem and peak in the prices as shown in above graph.

The Chinese government not only closes the mines and smelters but also puts some export restrictions and quotas. It is unlikely that this will change in the near future, and no substantial new produc-tion will be added to global supply.

CONCERNS ON ANTIMONYChinese dominance in the market and dependency on raw materials has been creating serious concerns globally. Se-curing raw materials which are impor-tant for the countries is one of the main issues. Countries like USA, Britain and the European Union work on defining the importance of raw materials, and de-veloping supply strategies. In a recent EU prepared Critical Raw Materials report, antimony was one of the 14 Critical raw materials for the EU. Besides the British Geological Survey is preparing a Risk list for critical raw materials, and antimony

was one of the top three critically high risk elements.

Besides this most important concern on antimony is exhaustion of reserves. Ac-cording to the U.S. Geological Survey, the Chinese Government continues to shut down antimony mines and smelt-ers in an effort to control environmental issues and resolve safety problems. The Local Government in Lengshuijan, Hu-nan Province, which accounts for about 60% of the world antimony supply, shut-tered almost all of its mines and smelt-ers. But the most important news is of-ficials in Lengshuiang announced that after more than 110 years of continuous mining, the area now had only 5 years of mining life left. It seems, this is the real problem that the market could be facing very soon.

NEW DEVELOPMENTSOne of the biggest problem in today’s world is energy, but because of the in-creasing concerns on nuclear energy and fossil fuels, we are forced to find al-ternatives, for that reason the world tries to develop renewable energies like so-lar, wind etc. But the biggest issue with energy, especially for electricity is that demand should be in constant balance with electricity supply. Any shortages of supply would normally have to be made up from other sources immediately. We need electricity even when the wind

World Mine Production (Sb Equivalent) tons

2010 2011

Bolivia 5,000.0 5,000.0

China 150,000.0 150,000.0

Russia (Recoverable) 3,000.0 3,000.0

South Africa 3,000.0 3,000.0

Tajikistan 2,000.0 2,000.0

Other Countries 4,000.0 6,000.0

World Total (Rounded) 167,000.0 169,000.0

World Mind Production 2011

China 89 %

Bolivia 3%Tajikistan 1%

South Africa 2%

Other Countries 3%

Russia (Recoverable)

2%

METAL PRICES BULLETIN AVERAGE ANNUAL METAL PRICE PER METRIC TON CIF USA

Year Price per ton

2000 $1,429.00

2001 $1,286.00

2002 $1,950.00

2003 $2,405.00

2004 $2,907.00

2005 $3,808.00

2006 $5,727.00

2007 $5,985.00

2008 $6,346.00

2009 $5,459.00

2010 $9,495.00

2011 $15,360.00

2012 $12,963.00

Source: United States Antimony Corporation

Risk List 2012

Element SymbolRelative

Supply Risk index

Leading Producer

Rare Earth elements REE 9.5 China

Tungsten W 9.5 China

Antimony Sb 9.0 China

Bismuth Bi 9.0 China

Molybdenum Mo 8.6 China

Source: British Geological Survey

$20,000.00

$15,000.00

$10,000.00

$5,000.00

$0.00

2000 2002 2004 2006 2008 2010 2012

01 March 201350

is not blowing, sun is not shining, and weather is not raining enough. On the other hand when you have more than enough of these sources, you currently cannot store the electricity of oversup-ply. The missing thing here is a storage device Professor Donald Sadoway from MIT thought on this problem, but in solving this problem the most important criteria for him when he was doing this, is to build this device using simple man-ufacturing techniques and factories that are not so capital intensive. At the end the Professor and his team developed new battery technology called “liquid metal batteries” that has the capacity for grid level storage. The technology was very simple, he put low density liquid metal at the top, put a high density liq-uid metal at the bottom and molten salt in between. Magnesium and antimony are two perfect elements for them be-cause the current passing between elec-trodes generates enough heat to keep it at temperature for liquidity of metals, so that they could store the electricity with grid level. But these batteries are giant, a giant battery that fits in a 40 foot ship-ping container, has a nameplate capacity of two megawatt hours. You can make it as big as you want and it has grid level storage, silent, emission free, no moving parts, remotely controlled, designed to the market price point without subsidy.

TURKEYTurkey has roughly 200 known anti-mony mineralization’s. The majority of these are in Western Anatolia; in Kütah-ya, Balıkesir, İzmir, Manisa, Aydın, Uşak, Bilecik. Turkey’s antimony potential is roughly around 6,672,000 tonnes with changing grades between 1% to 38% Sb content. Sb Metal equivalent of ore reserve is 330,000 tons .

These data and reserve table are taken from 8th Quinquennialy report, and one of the most important sentences in this 8th Quinquennialy report is, “11% per-cent of our antimony reserves is in visible resource category”. Actually this means that we don’t know the real potential of Turkey with regard to antimony resourc-es, even known mineralization’s with lim-ited exploration on them, resulted with 330,000 tons metal equivalent, which is one of the most important resources in the world.

With having this world scale resource, it doesn’t seem that we have same scale of production of antimony.

According to Migem data, Turkey in-creased its antimony ore production up to 50,000 tons in 2008; it was the high-est production level of antimony. I think the best part related to antimony is that, we are not just only producing ore or concentrate, we also have capability and capacity to produce end products like antimony trioxide and antimony metals.

Known antimony miners and producers in Turkey are as follow;

• Cengiz Holding: (www.cengiz.com.tr/maden.asp) They are operating Öde-miş - İzmir antimony mine and they had a flotation facility. It was formerly Eti Mining property but was privati-zed. They have very low quantities of production.

• Özdemir Antimony: (www.antimuan.com/en/) Oldest antimony producer. They are operating antimony mine in Turhal - Tokat. They have flotation plant, smelter and trioxide producti-on facility. It is a subsidiary of one of the Turkey’s biggest gold producer Koza Gold.

• Tri-Star Resources: (www.tri-starresources.com) They are explo-ring the antimony mine in Göynük - Gediz - Kütahya. They also had a pilot plant for ore enrichment.

• Suda Maden (SudaMin): (www.suda-

Antimony Reserves in Turkey

Reserves (Metric Tonnes)

Location Grade (%Sb) Measured Indicated Inferred Total

Balıkesir Susurluk - Demirparı 1.16 - - 11,250 11,250

Balıkesir İvrindi - Korucu - Taşdibi 6 47,850 235,600 283,450

Balıkesir İvrindi - Korucu - B.Yenice 6.2 1,370 17,850 26,000 45,175

Balıkesir - İvrindi - Kayapa - K.Yenice 6.0 5,120 8,000 91,350 104,470

Bilecik - Söğüt - Dudaş 2.0 - - 10,000 10,000

Bursa - İnegöl - Sulukluköy 6.5 - 15,000 - 15,000

İzmir - Ödemiş - Emirli 4.8 575,331 1,015,291 - 1,596,622

Kütahya - Gediz - Dereköy 2.0 - - 364,000 364,000

Kütahya - Gediz - Göynük 1.2 - - 924,000 924,000

Kütahya - Simav - Dağardı 6.4 - - 2,584,440 2,584,440

Niğde - Gümüşler - Canyarığı 38 - 2,530 - 2,530

Niğde - Gümüşler - Örendere 4.5 - - 100,000 100,000

Tokat - Turhal - Çamlıca 4 200,000 - - 200,000

Tokat - Turhal - Özdemir 4 43,000 111,000 150,000 304,000

Antimony Ore Production By Years

YEARS QUANTITY (TONNES)

2003 650.00

2004 8,711.00

2005 28,377.00

2006 25,316.00

2007 28,211.00

2008 50,357.00

2009 24,917.00

2010 25,974.00

Source: http://www.migem.gov.tr/links/istatistikler/2003_2009_URETIM_%20

BILGILERI.mht Migem = Turkish Republic Ministry of

Energy and Natural Resources - General Directorate of Mining Affairs

01 March 2013 51

min.com/company.htm) A subsidiary of AMG group. They have the biggest antimony mine in Turkey, Mine co-vering more than 65 km², formerly known as Metsan Antimony Mine. They also have a smelter and trioxide production facility in Gediz-Cebrail.

• ADK Mining: They have a mine in-Zorkun - Hatay. They only have ore production. But this mine is a new discovery and wasn’t known before. Company has 3 licenses covering ro-ughly 60 km².

• Zirve Mining: (www.zirvemaden.com.tr) they started to operate mine as manganese mine but they dis-cover antimony pockets inside the manganese ore and discover new antimony veins in different part of the mine. They are producing some small quantities of antimony ore.

• BS Investment Holding: (www.bsyati-rim.com.tr/) They are producing anti-mony ore from their Niğde - Çamardı antimony mine. It was historically known old mine.

• Tempo Teknik: (tempoteknik.com/antimont.html) They have mining operation, beneficiation, smelter and trioxide production facilities in Kütah-ya - Tavşanlı.

There is also some other producers and small miners that we couldn’t list here as we don’t know too much details about

them. But when we consider all of these we are still not benefiting enough from Turkey’s potential.

CONCLUSIONAntimony classified as “Minor Metal”, and with current supply problems, and ex-pected exhaustion of Chinese mines will increase the minority of the antimony together with the prices.

New developments on grid level energy storage, currently shows that antimony doesn’t have a substitute in this appli-cation. We are talking about the giant batteries and giant batteries need huge amount of antimony.

Even just by considering 3% annual in-crease in consumption without adding new driven demands by new applica-tions, world need 4 - 5,000 mt of addi-tional Sb equivalent material per year. Market may currently have oversupply and price decreases but it doesn’t seem possible that even the new projects that are known in the market, start produc-tion, supply gap will be closed, especially when the Chinese producers stop pro-duction because of exhaustion of their resource.

Turkey with its known but undiscovered resources of antimony, could even have the potential to substitute the China in the future. We may have an “elephant” but we have to discover it. Even we didn’t find out an “elephant”, with different small mining operations we could be the

biggest producer of the antimony. But producing this type of “Critical Raw Ma-terial” is not just for trade advantages, it will also enable us “Strategic” advantages especially in Energy Industry. Because with the antimony, we could have a giant battery, that could supply enough elec-tricity for Istanbul, from the solar panels when the sun is not shining. This is the most important advantages for Turkey, especially nowadays, when we are look-ing to stop our energy dependency.

REFERENCES1- Anderson, Gorby G, “The metallurgy of antimony”, Chemie der Erde - Geochem-istry, V. 72, Issue 4, P.3, July 20122- Bell Terrence, Metal Profile: Antimony, www.about.com3- www.myanmar-sb.com/aboutanti-mony.html4- “Antimony: A Metal?”, www.HardAsset-sInvestor.com5- Antimony, Metal Bulletin Montly, May Issue, p.44, 20076- www.usantimony.com/7-Ancoa Ltd Study of the antimony market, Roskill Consulting Group Ltd., 17.10.20118- Annex V to the Report of the Ad-hoc Working Group on defining critical raw materials, European Commission, 30.07.20109- Mineral Commodity Summaries 2012, U.S. Geological Survey, January 201210- www.miningfeeds.com11- www.ted.com12- TBMM (Turkish Parliement) Minute Bulletin, Period:20, Volume:46, Year:3, Page:52, 03.03.199813- Turkey State Planning Institute, 8th Quinquennially Development Plan ,Min-ing Experts Commission Report, Metalic Mines SubGroup, Other Metals, Antimo-ny, Tungsten, Nickel, Vanadium, Molyb-denum, Tin, Manganese WorkingGroup Report, 2001, DPT:2629-ÖİK:640

CONTACTS

Sait UysalMining ProfessionalE-mail: [email protected]: www.saituysal.com.tr

01 March 201352

The last decade has experienced an unprecedented rise in the mining and mining-related exploration activities in Turkey. Mining industries revenue increased 5-fold during this period amounting nearly 10% of the country’s GDP (MIGEM, 2012). This increase is par-allel to a positive outlook of the mining sector in the country and a large number of international companies taking part in the exploration and mining activities leveraged by a robust mining legislation adopted recently. As the modern-era explorations discover new mines, some of ready to mine historical mining pros-pects wait unnoticed in this ancient land. The purpose of this article is to highlight the re-discovery of some of these histori-cal mines (Fe, Mn, Cu, Au, Ag, Sn) dating as far back as Urartian era (860 - 640 BC) in Eastern Anatolia. Several such mining locations are described and illustrated. One of these sites, a medieval mining site which may have been operated by Urar-tians as well, was discovered by chance only in 2007 on northwest of the city of Van. The discoveries and description of these mines are important in a wide multidisciplinary scientific community including historical mining, metallurgy, archeology, and for investment commu-nities.

INTRODUCTIONIn the last fifteen years, Turkey’s min-ing industry has gone through major changes; being transformed from a state controlled industry to a privately owned and controlled industry. Today, 85% of the industry is owned and controlled by the private sector (E&MJ, 2012). Accord-ing to a report issued by the office of the prime minister (ISPAT, 2010), the com-bination of regulatory changes, incen-tives offered, and reduced bureaucratic processes for obtaining mining licenses, caused a steady increase in local and

foreign investments each passing year (Figure 1) and are expected to continue growing in coming years. With respect to regulations, the country’s latest mining code was adopted in 2004 (Mining Law, 2004) and updated in 2010 to streamline the processes. The latest modification in 2010 involved an amendment that pre-vented someone from obtaining many mining licences, not for establishing a mining business, but preventing other mine businesses and hoping that one of these licenses may worth substan-tial amounts in some future. As a result of these and other amendments, such as improvements regarding health and safety conditions, liability conditions and streamlining the exploration process, to-day’s mining code is much more attrac-tive for investors and operators. Begin-ning in 2002, the number of companies with foreign capital in their investment portfolio is rising significantly each year (Figure 2). There are further signs that indicate the global mining community is taking a keener interest in Turkey. For an example, the three countries which are traditionally known as the mining power houses - USA, Australia, and Canada - had more than 50 participants in the latest world mining congress held in Istanbul in 2011. The growth in mining industry in Turkey is likely to continue in coming

years; because the government targets to be the world’s tenth largest economy by 2023, with the mining sector as one of contributors in achieving this goal. Min-ing industry has been evaluating these conditions and responding by increased investment in exploration activities, largely in the western part of the country. The potential in eastern Anatolia is also huge, and realization of this potential is expected to follow the trends in other parts of the country in near future. In this regard, there are some easy targets that have been overlooked; namely historical mines which have been idle long time, some dating as back as Urartian times. The ore in these historical mines is close to surface and offers an easily mineable resource-thus more likely profitable- prospects in these mining locations. Sur-prisingly, most of these mines have been re-discovered only recently and some by chance. Meanwhile, there is a very little information in common literature regarding these mines. In this article, three of such historical mining locations are described and illustrated in terms of their historical backgrounds, the current site conditions and minerals present. The discovery and description of the mines and review-analyses their minerals are important in a wide multidisciplinary scientific community including historical

Historical Mining and Processing Centers

in the Van Province of Eastern Anatolia: Rediscovered


12,000

2000 2002 2004 2006 2008 2010 2012 2014Years

10,00010,51110,172

9,2168,105

6,2145,166

3,6132,587

1,916

11,480

1.1 1.1 1.2 1.4 1.41.5 1.51.41.2 1.2

8,000

6,000

4,000

2,000

0

12.00

10.00

8.00

6.00

4.00

2.00

0.00

Figure 1: Mining Industry Revenues (Data from: MIGEM, 2012)

01 March 2013 53

mining, metallurgy, archeology, and for investment communities.

HISTORICAL MINES IN THE PROVINCE OF VAN - DESCRIPTIONS AND ANALYSESBalaban, Bahçesaray, Zilan are three important historical mining and pro-cessing centers in the eastern Anatolia where once the ancient Urartian King-dom flourished on the basis of wealth obtained from their mines. According to Belli (2004) the Urartian kingdom was ‘the biggest mining society of their time in both Anatolia and the old Eastern World’. They managed to sustain their kingdom, which they have established on a large territory around their capital Tuşba (Figure 3), by engaging in ample amount of mining activities and mining products. It is reported that on one oc-casion, Urartians gave Assyrians, their rivals, tons of gold and silver, and items made of these, as war reparations (Akçil, 2006). They also built a sophisticated road system (Sevin, 1988) which helped the transfer of these products to desired destinations within the Kingdom. Fur-

ther evidence of their mastery in mining and metallurgical areas is gathered from inspection of unearthed metallic works and tablets describing manufacture of weaponry. Urartians also had good knowledge of local geology, and inten-tionally used chemical fluxes (Pb, Rb, and Li) to attain desired firing temperatures (Akça et al., 2010). It is believed that their craftsmanship had been passed from Lake Van area to the neighboring central Anatolia first, and then Etruscans carried it from there to Aegean and as far as Italy (Günaltay, 1987). Today, the Urartian me-tallic art objects are spread all over the world in the hands of collectors, traders and museums (Musceralla, 2006).

Archeological work in the area has been going on since late 1970’s, but not a single mining site was found until the discovery of the Balaban site in 1990 (Kaptan, 1990). The Balaban site, near the Tatvan-Van state highway running along the east side of Lake Van, and a location near Bahçesaray remained the only his-torical sites which appeared in the local mining/geological literature (Şener et al.,

2007) until the discovery of the Zilan site in 2007.

Balaban The village of Balaban is located at about 92 km of Van - Tatvan state highway. The iron ore body and the smelting center is at the “Mağara Tepe” locality, and is identified as a the oldest known iron ore mining operations belonging to the Urartian period (Belli 2004, Sener et al., 2007). There are two mining tunnels (Figure 4a) in Mağara Tepe which are ex-cavated vertically to each other. The ore consists of hematite and specularite. The ore is melted at the closest stream val-ley to the mine. All of the ceramic pieces (Figure 4b) were found on the east side of the area known as the Pero Field, and are remnants of the Urartu Operations. It is believed that there were no mining operations after 6AD, because no pieces belonging to younger age have been found in the area (Sener et. al., 2007). The ventilators found in the operations have a rectangular cross-section. Rectangu-lar-shaped ancient ventilators have not been found elsewhere in Anatolia (Belli, 1991). The ventilators, found are 3 - 5 cm long, but they must have been lon-ger as originals. They are man-made

Figure 3: Locations of the historical mines (Balaban, Bahçesaray and Zilan)

Figure 2: Number of companies with Foreign Capital in Mining (Undersecretariat of Treasury)

2004

138188

236

318

409

478

2006 2007 2008 200920050

100

200

300

400

500

600

5048

82

91

69

01 March 201354

and have 8cm of surface width. The air channel passes through the middle and the diameter of the air channels is about 3 - 5 cm.

BahçesarayThe ancient mining remnants in Bahçe-saray include a single horizontal tun-nel (Figure 5) which is located in an area known as Guvercin Tepe (Peagent Inns) and Kırmızıköprü smelting site. At Bahçesaray Kırmızıköprü, slag piles and ruins of stone miner’s houses from the old ‘pürneşe (happy-lively)’ mining op-erations’ are visible today. The main ore is sphalerite. Limonite, hematite, and py-rite, are also present as minor minerals. The ore was transported to the shores of the Bahçesaray River and was smelted there using forests of the time as the re-quired fuel source. The main gang min-erals are calcite and quartz. This mining operation must have had significant im-portance for Rusahinili (Toprakkale) and Sardurihinili (Çavuştepe) Urartian king-doms (Belli, 1991).

ZilanThe site in Zilan valley contains mining structures such as shafts and galleries, and heaves of stone chips indicating some ore enrichment activities taking

place there (Figure 6). The site was first described in the mining/metallurgical literature by Ates and Kılıç (2012). Acco-ordingly, there is a paved highway con-necting the village and the town of Erciş near northern shores of Lake Van. This valley is intruded into by several creeks forming the Zilan (Ilıca) River and it is one of the largest drainage channels in the basin of Lake Van. One of the oldest settlements known around Erciş, called “Zernişan Kale” by local people (“Zer-naki Tepe” by Burney 1958) is situated at the entrance of Zilan Valley. The word “zern-” in its name, in Persian, means “golden” and “kale” means fortress. The establishment of the settlement was dated to the Urartian era by Burney (1958), but Sevin (1997) concluded that it should rather belong to the times of Shapur the Great (241 - 272 AD) of Sas-sanid dynasty.

In 2007 during a trip to the valley a for-mer mining area was discovered by chance. The mining complex is accessed by leaving the paved highway and turn-ing west from the hot springs facilities near Hasanabdal Village to an unpaved seasonal road. This road runs through the north flank of a small valley with a creek running approximately in a west to east direction and joining the Zilan River. The remnants of the historical mining fa-cilities are located on both sides of this small valley.

Mining and processing evi-dence at the siteThe specific mining and processing de-scriptions of the facilities found at these locations are given by Ateş and Kılıç, 2013. There is a rectangular well, in fact

mining shafts, in this location with 1.4 x 2.5m cross-sectional dimensions that narrows down to a 1x1m square dimen-sion at about 2m-depth. One of the rect-angular shafts, sunk from a steep rock slope to follow a near vertical ore vein, gently spirals down with its bottom in-visible. Its total depth could not be deter-mined at this time but, from the sound of falling debris on water, is estimated to be at least 10 m.

In another location, there is a stone-chip yard. The chips are hand-sized and cover an area of about 100m2. These are likely to be rejects from the larger ore-bearing pieces from which the valuable ore was recovered. In the center of the yard, there is a vertical shaft (2.4 x 2.4m) filled with similar stone chips. Moving away from the site at a vertical angle to the creek-line and to a higher elevation, there is another smaller chip-yard area with no shaft. This could be an area where the master craftsmen worked, or/and an area where a secondary ore recovery took place.

Four samples are analyzed for their mineralogy and chemical composition. Two of these samples are from an ore vein, and the other two are from heaps of what appears to be the processing rejects and the hill on upstream; re-spectively. Chemical analyses are done using Inducted Coupled Plasma Opti-cal Emission Spectroscopy (ICP-OES). The mineralogy is determined by using oriented powder samples by means of X-ray diffraction (XRD) analysis; using a Panalytical X PERT PRO MD x-ray dif-fractometer (40 kV, 20 mA) Ni filtered CuK radiation.

The XRD and chemical analyses show the samples taken from the ore vein are rich in Manganese (Mn) and Barium (Ba). At the same time the samples taken from outside the vein are poor in terms of Mn and Ba; confirming them as re-jects. The chemical analyses show the ore vein being rich (14.6 and 15.4%) in MnO in both samples taken from there. One of these samples is also rich in bar-ite (BaSO4, 14.9%), a mineral of barium. Thus, it is concluded that the Zilan Val-ley Mining and Processing Complex

a) Balaban (Photo: Y.Ates)

Figure 4. a) Balaban Site, b) Evidence Processing

Figure 5: Tunnel entrance at Bahçesaray (Photo: S. Şener)

b) Evidence Processing (Photo: S. Şener)

01 March 2013 55

Figure 6: Tunnels and stone chips evidence of primary level ore processing at the site (Ates and Kılıç, 2012).

was mining and processing Pyrolusite (MnO2), Barium or both.

More details and discussions about the Zilan site can be found in Ates and Kılıc, 2012.

Other sites in Eastern AnatoliaAlthough only three important mining sites are discussed and illustrated here, there are several other ancient sites in Eastern Anatolia (Belli, 2004) with similar mining and archeological characteristics and require a second look under the cur-rent mining environment.

DISCUSSIONThe mining activities in the province of Van in Eastern Anatolia are very mini-mal today. This is not because the mines run-out of the ores, but because there has been a disruption in operations of mines (Ates and Kılıç 2013). Urartians, who were effective kingdoms in a wide region centered around Lake Van includ-ing Eastern Anatolia, Tans-Caucasses and North Eastern Iran during 9 AD -6 AD, are known to be a skilled mining society of ancient Asia. It has been determined that a number of mining operations were car-ried out around the Lake Van by Urar-tians. Until recently, Balaban-Pürneşe and Bahçesaray iron mines in the Van area were known to be the most signifi-

cant mines operated by Urartians in the region (Belli, 1992). However, the discov-ery of the Zilan site in 2007 demonstrates the high potential for other equally im-portant historic mines in the region. Modern exploration techniques of to-day should air more of the mines which were the source of the wealth for many historic civilizations of the region. Beside adding to debates concerning historical cultural activities, the mining in these locations will have ample economical benefit to operators and the communi-ties involved.

CONCLUSIONSThe current mining environment in Tur-key is very attractive for entrepreneurial and corporate investments due to recent changes in the mining Law and supports given by the state. This is evident from the increased number of companies tak-ing part in exploration and operation of mines and from the new discoveries in the western part of the country. At the same time there exist relatively un-touched ancient mining regions in the country that once were the cause of the glory for some civilizations such as Urar-tians. Three of these sites are described in this study. The ores in these known locations are close to surface, easily ac-cessible, and have high ore grade. There-fore they have a high potential of being mined profitably today. Considering that one of some of these historical mines have been recently rediscovered only by surface reconnaissance studies, the po-tential for other discoveries in the region remains high.

REFERENCES1- Akcil, A. (2006) Mining History in Ana-tolia-PART 1, CIM Magazine 1 (1), 90-92.2- Akça, E., Arocena, J., Kılıç, S., Dingil, M., Kapur S. (2010). Preliminary chemi-cal and micromorphological observa-tions on Urartu (800-600 B.C.) ceramics, Eastern Turkey. Geoarchaeology 25/2, 233-244.3- Ateş Y. And Kiliç S., 2012. A report on the medieval mining and ore processing complex: Zilan Valley, Van, Turkey. Medi-terranean Archaeology & Archaeometry, Vol. 12, No. 2, pp. 105-115.4- Belli, O. (1991) Ore deposits and min-ing in Eastern Anatolia in the Urartian pe-

riod: silver, copper and iron”, In Urartu, A Metalworking center in the first milleni-um BC, R. Merhav (ed.), Jerusalem, 16-41.5- Belli, O., 2004. Anadolu’da kalay ve bronzun tarihçesi. Istanbul, Turkey: Vehbi Koç Vakfı.6- Burney, C. (1958) Eastern Anatolia in the Chalcolithic and Early Bronze Age. Anatolian Studies, vol. 8, 157-209.7- E&MJ, 2010. Mining in Turkey, a coun-try thirsty for its own mineral reserves. Engineering and Mining Journal, January 2012. Pp. 41-67.8- Günaltay, Ş.M. (1987). Yakın Şark II, Anadolu, en eski çağlardan Ahameniş’ler istilasına kadar. Türk Tarih Kurumu Yayınları No VIII. Türk Tarih Kurumu Basımevi, Ankara. 2. Baskı.9- Kaptan, E. (1990). Findings related to the history of mining in Turkey. Mineral Res. Expl. Bull.. 111. 75-84.10- MIGEM, 2012. MIGEM (General Di-rectorate of Mining Affairs). Distribution GDP over the years. www.migem.gov.tr/links/istatistikler/GSMH_DAG.mht (last accessed: 10.08.2012)11- Mining Law, 2004. Maden Kanunu (Mining Law). Chamber of Mininig Engi-neers’ publication, Ankara, XXX p.12- Muscarella, O.W. (2006) Urartian met-al artifacts: an archaeological review. An-cient Civilizations vol. 12 no 1-2, 147-177.13- ISPAT, 2010. Turkish Mining Industry Report. Investment Support and Promo-tion Agency of Turkey (ISPAT). July 2010. 14p.14- Şener, S., Şenol, M., Çolakoğlu, A.A., Şener, E. (2007) The Urartu Civilization Era Iron Mining in Bitlis Metamorphics Belt,: Bahçesaray and Balaban (Van) Ex-ample, 60th Turkish Geological Congress, 16-22 April Ankara, p.163-165.15- Sevin, 1988. The oldest highway: be-tween the regions of Van and Elazığ in eastern Anatolia. Antiquity, Vol. 62, No.: 236, pp. 547–551.

CONTACTS

Yusuf AteşDepartment of Civil Works, Süleyman Demirel University, Isparta, 32260 - TurkeyEmail: [email protected] [email protected]

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Over 100 years ago a short paper entitled ‘The lixiviation of gold deposits by veg-etation’ reported that the wood of the Baromalli tree (Catostemma fragrans) in Guyana contained gold. This was the first suggestion that the analysis of trees to determine their gold content might as-sist the prospector in locating zones of mineralization concealed by soils or other types of overburden. Over the following 80 years a few publications appeared with new data on gold in vegetation, including a report of extraordinarily high levels (640 ppm Au) in the ash of horsetails (Equise-tum) from Czechoslovakia. Such concen-trations would make the horsetails mine-able by just cultivating crops, harvesting them, and extracting the gold from the ash! However, this potential ‘phytomining’ of gold has proved to be nothing more than an artifact of an inadequate analytical technique. Other than gravity separation of sediments in placer mining, there is still no mining substitute for physically remov-ing gold-bearing rocks from the ground and processing them to extract the small traces of gold that are typical of even a ‘rich’ gold deposit.

These early observations of gold in plants have piqued the imagination of subse-quent researchers and prospectors, and over the past 40 years the significant ad-vances in analytical chemistry have result-ed in a greatly enhanced database on the gold content of vegetation.

FACTORS TO BE CONSIDERED WHEN USING PLANTS FOR GOLD EXPLORATIONThe Siberian exploration biogeochemist Alexander Kovalevskii conducted exhaus-tive studies on the uptake of metals by different plant species, and categorized plants into four groups according to the degree of barrier to metal uptake that a particular plant exhibits. This barrier may

be at the interface between the root sys-tem and the soil, or between different tis-sues comprising the plant. For example, in black spruce (Picea mariana) uranium con-centrates in twigs whereas needles have much lower concentrations. In this case the twigs would be considered “practically non-barrier”, whereas the needles would fall into the next category of lower barrier. The perfect ‘non-barrier’ plant does not exist, because all plants have a threshold above which no more of an element can be absorbed. However, there are a number of plant tissues that are almost non-barrier.

Every field geologist is likely to have wit-nessed the extraordinary physical strength of plants. Roots can wedge apart cracks in rocks and locally penetrate deeply into the surface in their endeavour to sustain a firm support for the growing plant, and in their search for water and the nutrients that they need to survive.

In addition to the great physical strength of roots there is a powerful chemical micro-cosm in their immediate vicinity. The high-ly corrosive nature of the plant-substrate interface can be seen in Figure 1 where the roots have changed the oxidation state of the sediment as they have extended down into unoxidised material.

At this interface the roots can be very selective – absorbing those elements that they require for their survival and health, while excluding elements that may be harmful and tolerating others. Once absorbed by roots the elements are distributed within the plant accord-ing to growth requirements. The ‘toler-ated’ elements are mostly translocated to plant extremities where they are se-questered out of harm’s way. Gold can be considered as one of these ‘tolerated’ elements: the highest concentrations of gold within many species are in the out-er bark, twigs, and at the tips of leaves. Hydroponic studies at CSIRO in Australia have shown, too, that gold concentrates in the bark portion of twigs. This ‘acrop-etal’ tendency is, from the point of view of prospecting, fortuitous because the outer parts of trees and shrubs are the easiest to collect.

Gold can enter plants in various chemical compounds including a) chloride com-plexes, e.g. Au2Cl6, b) bromine complexes such as Au2Br6 in the presence of the sulphate ion which acts as an oxidant; c) some iodine complexes; d) thiosulphate; and e) organic complexes. Amongst the last are the cyanogenic glycosides that are produced by more than 1000 plant species. These compounds are formed by plants from one of four amino acids, and because of the high solubility of gold in the presence of cyanide com-pounds they provide an excellent path-way for the transfer of gold into plant structures. Some plants of the genus Prunus and others of the rose family con-tain cyanogenic glycosides. The scanning electron microscope (SEM) can be used to observe where elements nucleate within a plant. Studies of these phases are few, but there is evidence that common mineral phases occur as well as

The Power of Plants for Gold Prospecting


Fig. 1: The chemical power of plants. Oxidised till overlying unoxidised till from northern Vancouver Island. Roots have penetrated into the unoxidised material (pencil for scale) and the organic acids from the roots have caused local oxidation of the sediment

01 March 2013 57

some that are unknown in the geologi-cal world. For example by setting an SEM in back-scatter mode and analyzing the ‘bright spots’ (elements of high atomic number) using an X-Ray fluorescence attachment, unique phases (e.g. Au-Ni, which is unknown in rocks) have been observed. It appears that most of the heavy metal phases that occur in plant structures are less than 2µm in diameter. Figure 2 shows crystalline gold in the bark of a tree growing on a gold deposit on Vancouver Island, demonstrating the intimate association between the organ-ic and inorganic worlds. The crystal of gold shown in Fig. 2 is only 1 by 0.5µm. It is interesting to note that whereas plants grow in soils and rocks, once these com-ponents have been dissolved and trans-ferred through membranes into plant tissues, they can be transformed back into both amorphous mineral phases and crystalline minerals.

RELATIONSHIP OF GOLD IN PLANTS TO GOLD IN SOILS AND ROCKSIntuitively, it might be expected that there would be a strong relationship between the gold content of soils and the trees growing in those soils. The real world is rarely that simple. In attempting to determine the relationship between the chemistry of the soil and that of a tree or shrub the usual procedure is to collect a small bag of soil and a some-what larger bag of plant tissue. However, there arise some fundamental questions:

• which soil horizon should be collec-ted?

• which size fraction of the soil should be analysed?

• which type of tree tissue (and from which part of a tree, top or bottom, north or south) should be collected for comparison with the underlying soil?

• at what time of year should the com-parison be made, since there are se-asonal variations in plant chemistry?

Typically, each soil horizon has a different gold content, as does each size fraction of that soil. Similarly, each vegetation tis-sue type has a different ability to collect and store gold, and concentrations in liv-ing tissue change with the seasons. The problem is compounded by the fact that a soil sample is usually no more than a handful of material from a single horizon, and as such represents a minuscule sam-ple compared to the many cubic metres of all soil horizons accessible to the root of a large tree. In gold-bearing soils near the Nickel Plate mine in southern British Columbia, with increasing depth down the soil profile there is a progressively closer relationship between the gold and arsenic content of the trees (bark of Douglas-fir and Engelmann spruce)

and the gold content of the soil (Table 1). The conclusion is that in this environ-ment most of the gold extracted by the trees is from the basal C-horizon of the soil profile, and relatively little from the surface layer.

The analysis of rock samples for gold cannot be expected to give a good cor-relation with the gold content of a plant growing in that rock, for much the same reasons that there is not always a good relationship between the gold content of soils and plants. Typically gold in rocks is heterogeneously distributed so that a single hand specimen may con-

Table 1: Correlation coefficients (r) between the gold and arsenic contents of various soil horizons with bark of Douglas-fir (Pseudotsuga menziesii) and Engelmann spruce (Picea engelmannii). Increasing coefficients with depth (i.e. Forest Litter, A, B, C hori-zons) indicate that the root systems of these trees are absorbing most of these elements from the lowest soil horizon (C). The trees are ‘mining the ground’ by drawing the metals from depth.

a

b

Fig. 2: Gold in bark. Inside surface of the outer bark from a mountain hemlock tree (Tsuga mertensiana) at an undeveloped gold prospect on Mt. Washington, Vancouver Island. The arrow on Fig. 2a is magnified on Fig.2b to show, in back scatter mode, a tiny crystal of gold that has formed within the plant structure by nucleating dissolved gold in plant fluids.

Douglas-fir Bark (n=12)

Engelmann Spruce Bark (n=13)

Au (ppb) As (ppm) Au (ppb) As (ppm)

Forest Litter .13 .10 .48 .58

A- Horizon .63 .63 .65 .65

B- Horizon .60 .55 .79 .80

C- Horizon .76 .64 .90 .88

Table 2: Comparison of gold concentrations in rocks and twigs of Pacific Silver Fir (Abies amabilis) around a gold deposit in southern British Columbia. Each rock sample was collected from within the area penetrated by roots of each fir tree. Differences are attributable to heterogeneity of gold distribution in the rocks and the integration of the gold content of the rocks by the extensive root systems of the trees.

Site Rocks Fir Twigs - Ash Fir Twigs - dry

Au ppb Au ppb Au ppb

A 684 845 17

B 553 258 5

C 165 456 9

D 84 634 13

E 7 512 10

F <2 540 11

G <2 1820 36

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tain several grains of gold (perhaps suffi-cient to be considered a good prospect), whereas another piece of rock from only a few centimeters away may contain no detectable gold. The plant rooted in this substrate may succeed in integrating the geochemical signature of a substantial volume of rock and provide, therefore, a more representative assessment of the gold potential of an area than the litho-geochemical signature obtained from a few hand specimens (Table 2 - on the previous page).

COLLECTION OF PLANT TISSUESEach species of plant has a different re-quirement for, and tolerance to, the full periodic table of chemical elements. Al-though there are now useful guidelines in the literature as to which part of which plant might be the more informative for gold exploration, it is commonly useful to start a survey by undertaking an orienta-tion study. This will establish which species is the most common within a proposed survey area (mixing species is not a good idea because of their varying abilities to ac-cumulate metals), and provide an oppor-tunity to undertake a small multi-species, multi-tissue sampling programme from some strategic sites – e.g. close to zones of known or suspected mineralization and also some background sites in order to es-tablish levels present in areas remote from mineralization. However, if time and/or logistical constraints preclude this phase, then sample selection must rely on pub-lished information.

Within the northern (boreal) forests of the world the conifers predominate. Some species of conifer (e.g. Pinus brutia – Turk-ish pine) occur quite commonly through-out southern and western Turkey. Conifers have been evolving for some 350 mil-lion years, during which time they have become sophisticated in their selection of and tolerance to metals and other ele-ments. They can withstand great extremes of both physical and chemical environ-ments. For those species that develop scaly barks, gold tends to concentrate in the scales of the outer bark, with substantially lower concentrations occurring in the in-ner bark and trunk wood.

Twigs, especially the most recent several

years’ growth, also concentrate gold, along with some commonly associated ‘path-finder’ elements such as arsenic and anti-mony. Each sample of twigs should consist of a similar number of years of growth, be-cause the chemistry of a twig varies along its length. Most heavy and toxic metals occur toward the tips, because the ratio of twig bark (containing most of the metals) to twig wood increases as the twig diam-eter decreases. It is therefore important to maintain a consistent diameter of twig (and similar number of years of growth) in order to maintain a constant ratio of twig wood to twig bark.

A technique developed to collect bio-geochemical samples for gold surveys is to use a helicopter (Fig. 3). This is espe-cially appropriate in remote, rugged and heavily forested terrain. In northern con-tinental climates and at high altitudes it has the added advantage that samples can be collected while there is still a snow cover and after ‘break up’ when the snow has gone but the ground remains too frozen for collection of other surface sampling media.

SURVEY RESULTSAt many localities in the Amazon Basin ‘garimpo’ gold mining operations involve digging pits or hydraulic washing of the soft lateritic surface material in order to recover the contained gold. These opera-tions are disruptive to the environment, but vegetation grows back so quickly that the scars are soon obliterated. A pioneer species that soon takes root in seemingly barren terrain is the shrub Vassoura de

Botão (Borreria verticillata). A background concentration of gold in this species is <0.2 ppb Au in dry tissue. However, close to some of the garimpos the concentra-tions can be substantially higher, with a maximum of 542 ppb Au recorded. An ash equivalent concentration would be >10,000 ppb Au, or 10g/tonne gold – virtu-ally a mineable plant if sufficient biomass could be cultivated.

In the arid to semi-arid regions of the west-ern United States big sagebrush (Artemisia tridentata Nutt.) has been used in the ex-ploration for gold. Studies have concluded that mapping traces of gold in sagebrush can provide a cost-effective guide to assist in locating drill targets for both disseminat-ed and vein-hosted gold, because it is the relative enrichment of gold within a survey area that is the key factor, rather than the absolute concentration.

In Australia various species of eucalyptus and acacia have been used in the explora-tion for gold, and recently the tough spini-fex grass shrubs, with very deep root sys-tems, have been used with success in the Tanami desert.

Within the boreal and temperate forests of the world there are numerous examples of trees and shrubs highly enriched in gold. Some of these reports are from vegetation growing close to mine sites and the possi-bility of some airborne contamination can-not be entirely ruled out. However, there are many anomalously high concentra-tions of gold in vegetation reported from locations deep in pristine forest. Within

Fig. 3: Collection of tree tops from a helicopter. As the helicopter slows to hover at the top of a tree, the sampler (wearing a well-anchored harness) moves out onto the skid and gets into position to reach out for the crown or upper branches of the tree. One quick snip with garden pruning shears (or snapping off the top by hand) is all that is required. This technique is a fast and efficient way to cover large areas in a short period of time. Usually the time spent at the treetop is only a few seconds. A survey grid of one sample site every 500 m can be undertaken at a productivity rate of up to 50 sites per hour. The gold content of tree tops is commonly <5 ppb Au in ash (<0.2 ppb dry weight), yet concentrations of over 700 ppb Au (14 ppb dry weight) have been found near unexploited gold deposits.

01 March 2013 59

the La Ronge gold belt of northern Sas-katchewan in Canada there are numer-ous occurrences of gold, a few of which have been developed into small mines. Prior to development of these mines, in 1984 a gold-bearing quartz vein was discovered in an area quite densely wood-ed with black spruce (Picea mariana). Whereas the exploration geologist had in-terpreted the direction of this vein, he had no simple way of determining where that it was gold bearing, because its projected ex-tension was under a boggy area, beneath which there was a metre or more of glacial till on top of the bedrock. Black spruce are tolerant of such boggy conditions and so samples of outer bark were collected at a number of locations for 1 km along the projected strike of the quartz vein. Table 3 shows a summary of the analytical data obtained on anomalous samples, and subsequent information obtained when the biogeochemical gold anomalies were drilled. This site was subsequently devel-oped as the Jolu gold mine.

It seems that there are no published studies of the use of trees and shrubs for gold exploration in Turkey. Studies by Zeynep Özdemir have assessed the use of Pinus brutia as a biogeochemical me-

dium to detect iron and zinc at the chro-mite deposits near Mersin. Also, an ori-entation survey by M. Akçay et al. around the Kanköy Deposit near Trabzon using Corylus avellana (hazelnut tree) and Rho-dodendron luteum concluded that these species could be useful biogeochemical media in the exploration for massive sul-phide deposits.

In Turkey there are more than 9000 plant species recorded. Of these, there are only a few that need to be considered as possible media for biogeochemical exploration, because the technique re-quires plants that are sufficiently densely distributed over a survey area to be avail-able for collection at each (or most) of the planned sample stations. In addition to those species already studied, a com-mon genus in Turkey that would seem worth investigating is Astragalus (poison vetch).

FUTURE DIRECTIONSGold mineralization is one of the most difficult commodities to find using bio-geochemical methods, because of the very low concentrations present in plant tissues (usually <1 ppb Au) and the gen-erally poor precision of commercially-available analytical methods at these low levels. However, the application of biogeochemical methods to the explora-tion for gold has now been developing for over 100 years with increasing refine-ments. There have been numerous prob-lems to investigate, not least of which has been the need for cost-effective meth-ods to chemically analyze plant mate-rial. Within the last 30 years instrumental neutron activation analysis (INAA) has become commercially available for only a few dollars per sample. Not only can small traces of gold be detected (on dry tissue or ash), but analytical packages also include high quality data for more than 30 additional elements including such useful ‘pathfinder’ elements as arsenic and antimony. More recently inductively coupled plasma mass spectrometry (ICP-MS) has been developed to provide data for gold and approximately 60 other ele-ments in the analysis of dry plant tissues. Even better is the high-resolution ICP-MS. These methods are providing new insight into elemental distribution patterns that

could assist in providing a vector to zones of gold mineralization. It is commonly the interpretation of the spatial relationship of element distribution patterns of gold and elements associated with gold that is the key to locating concealed gold min-eralization. More emphasis needs to be placed on the multi-element distribution patterns.

There are many factors that control the fate of gold in plants. Plants are complex entities that, over the past 450 million years of evolution, have become extraor-dinarily sophisticated in their abilities to select those elements that they need for their metabolic function, while develop-ing ingenious methods to exclude other elements or tolerate their presence by sequestering them in tissues (commonly their extremities) out of harm’s way. Ju-dicious evaluation of biogeochemical data, along with all other geological and geophysical information available to the exploration geologist can assist in the se-lection of drill targets, and ultimately the discovery of gold.

SUGGESTED READING1- Brooks, R.R., (Editor) 1992. Noble Met-als and Biological Systems: Their role in medicine, mineral exploration and the environment. CRC Press, Boca Raton, Ann Arbor, London, Tokyo. 393 pp.2- Brooks, R.R., Dunn, C.E., and Hall, G.E.M., 1995. Biological Systems in Min-eral Exploration and Processing. Ellis Horwood (Division of Simon and Schus-ter), Hemel Hempstead (UK), Toronto, New York, 538 pp.3- Dunn, C.E., 2007. Biogeochemistry in Mineral Exploration, (Handbook of Ex-ploration and Environmental Geochem-istry 9, Series editor, M. Hale), Elsevier, Amsterdam , 462 pp.4- Kovalevskii, A.L., and Kovalevskaya, O.M., 1989. Biogeochemical haloes of gold in various species and parts of plants. Applied Geochemistry, 4, 369-374

Gold (ppb) in Outer Bark from Black Spruce

Overburden Thickness

Drill Results

In ashDry weight

230 3.7 1 m Near main trench.

120 2.4 1 m

Erratic mineralization: 1 m of 0.85 oz/t (29 ppm) Au at depth of 50 m.

690 14 2.5 mSubcropping minera-lization: 0.11 oz/t (3.8 ppm) Au over 60 cm.

450 11.3 1 m

Well mineralized shear zone: 0.3 to 0.7 oz/t (10-24 ppm) Au over 4 m.

200 3.5 3 mMineralization, locally over 1 oz/t (35 ppm), at shallow depth.

Table 3: Gold in outer bark from black spruce (Picea mariana) at a time that a gold prospect in the La Ronge belt of Saskatchewan, Canada, was in the early stages of exploration. After the gold in bark values had been established, these sites were drilled and revealed the thickness of the overburden and the grade of gold encountered at each site. The prospect was subsequently developed as the Jolu gold mine.

CONTACTS

Colin E. DunnPhD, P.Geo, Consulting GeochemistAddress: Colin Dunn Consulting Inc.British Columbia - CanadaEmail: [email protected]

01 March 201360

The challenge that faces resource com-panies is how to create sustainable value while operating within geographic and country boundaries, known and unknown constraints, and variable micro and macro environmental conditions in the market and global economic conditions.

Achievment and release of this value is attained by allowing the physical na-ture of the identified mineral or metal resource, to drive design of the optimal technical solution to mining and pro-cessing activity within the mining value chain. For most junior companies this is enough, however developing and re-sourcing a strategic portfolio of projects that is designed to create flexibility to short and long term business environ-ment shifts, i.e. a portfolio mix that al-lows distribution of capital to respond to short term cycle variation, within a long term context is often important.

The practical achievement of this is only possible through strategic long term planning.

For a resource development and min-ing company to create sustainable value from its assets, it is necessary to:

• Optimize the composition of the as-set portfolio to align with business objectives, i.e. the companies clearly defined ‘Strategic Business Imperati-ve’;

• Build and operate assets within an anticipated long term business en-vironment and maintain flexibility of short term tactical response to short term shifts in the business environ-ment.

STRATEGIC LONG TERM PLANNINGResource exploitation companies re-

quire assets to generate value and at-tract investment (financial and social) within the context of a time-based value of money equation. Value generation from the asset(s) can only be achieved through an appropriate business model where the conversion of the Mineral or Metal resources to reserves is achieved and which, are then extracted, processed and sold, timeously.

The physical characteristics of a mineral or metal resource are fixed and do not change over time, however they exist at a fixed location so defining a context (e.g. stakeholders, legal, social, environ-mental, infrastructural) that may change over time according to social and politi-cal evolution. This is the spatial context that encompasses location and associ-ated operating environment.

The selection of a mineral asset portfo-lio is affected, primarily by the perceived financial value (investment quantum, returns, and duration), arising from the mineral asset(s). This value construct is driven primarily by the physical nature of

the mineral resource (size, content, and depth, which drive exploitation technol-ogy selection), the anticipated market demand for products arising from the mineral asset(s), and an accepted level of business risk in realizing the perceived value. All of these, except the physical characteristics, are influenced by near term and forecast long term, economic and market variables. The complexity and extent of possible options that arise

Strategic Planning & Vision -the Key to Sustainability in Mining


Figure 1: Strategic long term planning - complexity and options relative to nature of operations

01 March 2013 61

Figure 2: Schematic representation of the relationship of key strategic long term planning elements

under these circumstances increases with movement from a single com-modity, single operation in one country business through to a multi-commodity, multi-operation, multinational enter-prise as represented schematically in Figure 1.

The combination of the spatial context, economic, market, and technical vari-ables can be defined in a range of possi-ble strategic scenarios or global views in which the value from the mineral asset(s) could be realized. The global view at-tempts to capture the interdependence and uncertainty associated with key ele-ments of the spatial and business con-texts across the long lead times associ-ated with financial returns from mining activities.

Strategic long term planning of mineral and metal companies must therefore in-corporate elements of:

Optimization of the mineral asset portfo-lio composition

A long term perspective of a possible business environment

Flexibility of exploitation options in the short term.

Within this context, strategic long term planning therefore requires a cyclical reassessment of exploitation options (and the composition of the mineral asset portfolio), in the context of an-ticipated changes in the near and long-term business operating environment. This results in a near term tactical re-sponse (typically in a budget period) and a longer-term strategic response (the long term plan), both of which are encapsulated in the company business plan.

The philosophy of strategic long term planning is simple - it is an integration of logic, process, and methodologies to facilitate long term planning of mineral asset exploitation, within a strategic and market context. Simply put, it creates the link between the market requirements, business strategy, and tactical planning activities. Strategic long term planning creates the basis for the development of a portfolio of operations, current and future, that ensures optimal resource exploitation and creates the flexibility to respond to changing economic and market conditions while operating with-in legislative and mandated strategic constraints. The nature of these compo-nents, and their inter-relationship in the strategic long term planning process, is schematically represented in Figure 2.

The global and national business en-vironments, in conjunction with the characteristics of the market for mining

product(s), create the context in which global views or scenarios are developed for application in planning.

Global views or scenarios (the centre link part of the diagram) are developed and used to develop long term planning parameters (global assumptions) that represent the relevant underlying as-sumptions for each scenario, e.g. metal prices, exchange rates, escalation, etc. These planning parameters inform the financial analysis and optimization of the business plan, and create the link be-tween mineral asset portfolio utilization and the market.

The annual cyclical business planning process is conducted utilizing the plan-ning parameters (global assumptions) associated with the preferred or most likely global view. The physical charac-teristics of the individual mineral assets within the portfolio determine the

01 March 201362

development of a mine extraction strat-egy, the mining right plan, the budget, and long term plan per asset and collec-tively for a multi-asset business.

The business plan then forms the ba-sis upon which the organization is structured and resourced. Supporting, aligned execution plans are developed for the necessary supporting activities in finance, human resources, projects, engineering and infrastructure, and sus-tainable development, all of which take place in an annual planning cycle. The composition of the mineral asset portfo-lio is then reviewed and optimized rela-tive to the most likely scenario, the cur-rent state of execution of projects, and company strategic intent.

The business plan, which is the core out-put of the strategic long term planning process, is then reassessed for a possible shift to the next most likely global view. Real options arising from evolving al-ternate trajectories are evaluated and a contingency plan is developed, based on planning parameters associated with the alternate scenario.

THE OPERATING CONTEXTThe global and national business envi-ronments, in conjunction with the char-acteristics of the market for minerals and metals (and products) create the context in which a mining and metals company should operate. Key elements of this context are;

Characteristics of the mineral re-sourceThe mineral resource is the primary asset underlying value creation through the mining, recovery, and sale of metals or minerals.

Characteristics of the metals/min-erals marketUnderstanding of the market and partici-pants informs value based decisions and influences strategic actions. Understand-ing of the market and the environment in which the business functions informs the building of global views or scenarios and the associated global assumptions that are used to develop and optimize the investment centres that comprise

the business plan.

The industry value chainThe objective is to describe the major elements within the value chain and highlight areas of strategic planning flexibility. The nature of the value chain is integral to the understanding of the characteristics of the market.

Global business environmentThe global business environment can be defined as the global environment that influences local decisionmaking on re-source use and capabilities. This includes the social, political, economic, regula-tory, tax, cultural, legal, and technologi-cal environments. As businesses have no control over the external environment, their success depends upon how well they adapt to the external environment. The nature of the global business envi-ronment will have an effect on the na-ture of demand and resultant selection of orebodies for mining.

National business environmentSimilar to the global business environ-ment, the national business environment considers the social, political, economic, regulatory, tax, cultural, legal, and tech-nological environments of the country in which the business is operating. Typically this tends to be focused on legislative and socio-political components.

The legislative environment is a key enabler of mining and business activi-ties. Acquisition and effective exploita-tion of mineral assets is predicated on a well-defined and effective system of legal tenure that will allow investment in long life assets. The exploration for and subsequent exploitation of minerals is subject to a wide range of legislation and regulation; however, mineral asset acquisition and exploitation is governed primarily by the Ministry of Energy and Mineral Resources and ultimately the Prime Ministry in Turkey. Understand-ing and operating within the context of the legislation applicable to the minerals industry is thus a requisite for effective business functioning and strategic long term planning. Each of these contextual elements contributes to, and influences, the global views or scenarios that create

the context in which business planning takes place.

ASSUMPTIONS ON THE FUTURE - GLOBAL VIEWS AND PLANNING PARAMETERSThe reality of the business environment is that it is increasingly complex and dy-namic. Developing an understanding of the uncertainty inherent in the external and future environments, and testing the robustness of strategic plans against a set of possible futures, is a critical com-ponent of strategic long term planning. Analysing key global trends and seek-ing to influence the possible business future(s) requires a widening of perspec-tive to a range of possibilities.

In the strategic evaluation of mineral asset exploitation options, a view must be taken of possible future(s) and as-sociated parameters that will influence investment decisions. This view, which is encapsulated in a set of common long term planning parameters (the global as-sumptions), can and does change in line with macroeconomic drivers.

The complexity of long term planning parameters (typically forecasts of ex-change rates, inflation rates, metal pric-es, cost escalations, capital escalations, working capital, etc.) and the relation-ships between them and events that occur in the global economy requires that inherent uncertainty in investment decision making and portfolio planning is communicated through scenario plan-ning.

The link between the operating context and the planning of exploitation of the mineral asset is that of global views or scenarios. These are constructed and used to develop long term planning pa-rameters (global assumptions) that rep-resent the relevant underlying assump-tions for each scenario, e.g. metal prices, exchange rates, escalation, etc. These planning parameters inform the financial analysis and optimization of the strategic long term plan and the business plan.

The key processes and tools to develop global views and the associated plan-ning parameters are:

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• Scenario planning or global view de-velopment

• The development of the long term planning parameters.

SCENARIO PLANNING (GLOBAL VIEWS)The scenarios or global views that are developed as part of the strategic long term planning process are integral to the optimization of the mineral asset portfo-lio; they inform the development of long term planning parameters (the global assumptions) and impact strongly on contingency planning and real options assessment. Critically, the global views or scenarios create the link between the market, the global and national business environments, and the utilization of the mineral asset portfolio. Developing an understanding of the uncertainty inher-ent in the external and future environ-ments, and testing the robustness of any strategic plans against a set of possible futures, is a critical component of long term and strategic planning.

KEY ELEMENTS OF THE PROCESS COMPRISEDetermination of the Strategic Business Imperative (“SBI”), i.e. definition of the desired result, for example; ‘To produce 50,000 ounces of Gold at US$750 per ounce sustainably for 15 years.’ The SBI to be achieved as a result of the plans must be simple but definitive!

Determination of the key variables and drivers specific to the industry e.g. demo-graphics; innovation, science and tech-nology; geopolitical relations and the role of major influencers such as China; the global economy and globalization; natural resources and the environment.

Exploring metal/mineral demand, soci-ety issues such as the social licence to operate, government issues, environ-mental issues, technology and alterna-tive applications, capital and operating cost escalators, competitor actions, etc., aimed at highlighting key drivers, key questions, and setting the context.

Developing scenario themes and sto-rylines, writing up the synthesis and scenarios and reviewing the outputs.

Typically, outputs are visually presented relative to two orthogonal axes repre-senting primary drivers of change e.g. global economic activity and metal/min-eral dependency, with descriptors of the global views in each quadrant.

Dependent on the number of scenarios developed (typically three, maximum four), alternative business options can then be developed with identification of suitable trajectories between scenarios, dependent on changing circumstances or progression between scenarios over time. The critical difference in this ap-proach is rational movement towards an identified and agreed global view (previ-ously introduced through the scenario development process), rather than an ad-hoc crisis-driven response. The orga-nization knows what trajectory to follow as the contingency positions have been previously defined.

LONG TERM PLANNING PARAM-ETERS (GLOBAL ASSUMPTIONS)Cash flow estimates used in discounted cash flow analyses are fundamentally derived from estimates of revenue, oper-ating cost, and capital cost. Extensive ef-fort is directed at estimating costs (both operating and capital) to accuracy levels of less than 10 per cent error during the feasibility studies. Similarly production, grade, and metallurgical recoveries are estimated at comparable levels of accu-racy to drive the revenue line. However, an area that is often not subject to the same rigour is the impact on plan vi-ability of assumptions regarding metal (commodity) prices, exchange rates, in-flation rates (domestic and foreign), and escalation factors (capital expenditure and operating expenditure).

On the assumption that these global parameters are usually rigorously deter-mined for a five-year period and then maintained at long term trend estimates, the adoption of an optimistic or pessi-mistic long term perspective can have a significant effect on projects with 15–30 year life spans. The risk of not undertak-ing viable projects because of a pes-simistic long term view, or conversely undertaking marginal projects because of an optimistic long term view, is miti-

gated through the use of scenarios or global views plus real option valuations. Estimation of these long term planning parameters in the context of anticipated business global views or scenarios is therefore critical.

The global assumptions are a set of long term planning and economic param-eters that best encapsulate the external drivers of value associated with a scenar-io or global view to be applied in busi-ness planning. The aggregated param-eters provide a descriptor of a current and future global view and transition between the two. Crucially, the global assumptions provide the link between the agreed global views or scenarios and the associated economic parameters for business planning purposes. The global assumptions create discipline and uni-formity of assumptions, as they are the only economic planning parameters permitted to be applied across the orga-nization for planning and valuation pur-poses. This facilitates comparison and ranking of options.

THE PLANNING AND DECISION MAKING PROCESS - BUSINESS PLANNINGThe annual cyclical business planning process is executed using the planning parameters or global assumptions asso-ciated with the preferred or most likely scenario/global view. The composition of the mineral asset portfolio is reviewed relative to the most likely scenario, the current state of execution of projects, and company strategic intent. The physi-cal characteristics of the individual min-eral assets within the portfolio deter-mine the development of a mine extrac-tion strategy, the mining right plan, the budget and long term plan per asset and collectively for a multi-asset business. Concurrently, value is optimized through application of value-based management principles during the development of the strategic long term plan -at mineral asset level and company level for a multi-asset organization.

The business plan, which is the core out-put of the strategic long term planning process, is then reassessed for a possible shift to the next most likely global view

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which then forms the basis upon which the organization is structured and re-sourced. Supporting, aligned execution plans are developed for the necessary supporting activities in finance, human resources, projects, engineering and infrastructure, and sustainable develop-ment.

All of these activities take place in an an-nual planning cycle and are not neces-sarily sequential, as feedback loops occur between different activities at different points in the planning cycle. This process is schematically represented in Figure 3.

BUSINESS STRATEGY DEFINITIONOverall company strategy, as defined and communicated by the Board, directs the execution of the business objectives and provides the framework for decision making. This is the starting point for stra-tegic long term planning for metals and minerals entities.

Typically, company strategic planning follows elements of: • Information gathering and analysis

(internal, external, market) • Identification of critical issues facing

the organization • Development of a strategic vision sta-

tement that sets future direction • Mission statement review/revision • Development of strategic goals • Formulation of strategies for each

goal • Preparation for operational planning

based on the strategic plan.

In the strategic long term planning ap-proach, the company strategy directs the objectives of value-based manage-ment and defines prioritization logic in the long term planning process, i.e. the overall mineral asset portfolio optimiza-tion process is directed by the company’s strategic intent.

LONG TERM PLANNING PROCESS AND PROCEDURESThe overall objectives of the long term planning process are to create align-ment of activities to a common company planning calendar; to ensure utilization of common logic and tools that allow comparison between operations and op-tions; and to generate a common busi-ness plan that drives execution of the company strategy. The business plan-ning activity creates a central process around which the business organizes planning activities to meet the needs of the Executive and the Board. It creates

an annual rhythm to activities, so that all parties are aware, through the ‘five Ps’ of the planning process (philosophy, programme, process, product, and peo-ple) of what must be done, by whom, by when, and to what standard to meet the company’s planning needs. Align-ment with support activities is ensured through use of the long term plan as the base plan for resourcing, capability, and infrastructure establishment. The long term planning process ensures optimisation at mining right area level, with strategically aligned constraints, before consolidation and optimization at a mineral asset portfolio (company) level.

CONTINGENCY PLANNINGContingency planning identifies a con-trolled trajectory toward reduced or increased output relative to that origi-nally planned in the long term plan and the business plan. Generation of contin-gency plans allows a rational, controlled shift between one operating state and

the next based on earlier analysis. It is a means of reducing the scale of crisis through anticipation and prior sensiti-zation. Contingency planning recreates the link between the business plan and the global views by creating an iterative loop based on a different set of global as-sumptions.

Contingency plan actions are a sequence of logical steps to move toward a lower future output profile from both cur-rent operations and future investments. These are evaluated by investment centre and downscaling options may include closure, delay, or mothballing. Three primary factors are used to drive the prioritisation of potential ‘Plan B’ ac-tions:

• The market price for the product at which each investment centre beco-mes NPV break-even

• The working cost to revenue ratio for each investment centre as a measure of cost efficiency

• The potential mine output over the following five years.

The development of these priorities re-quires input from multiple parties

Figure 3: Business planning – key elements and interrelationship

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including the operations, projects, pro-cessing, and planning. Annually a con-tingency plan is developed as part of the long term planning process.

EXECUTION PLANS FOR SUPPORTING CAPABILITYThe ability of a mining company to ef-fectively execute an integrated business plan is dependent on alignment of ac-tivities of all participants in the company value chain (mining, process, projects and engineering infrastructure, human resources, marketing, corporate affairs, and finance). One of the key objectives of the strategic long term planning framework is to create alignment of ac-tivities across functional groupings and along the company value chain. This is facilitated by the integrated process and dependencies created between the busi-ness plan and resourcing of the various support functions.

The business execution activities of an integrated minerals and metals compa-ny can be broadly sub-dividedalong the value chain into two groupings - operat-ing and support. The operating activities are mining and process, underpinned by project and engineering execution. These core operating activities are in

turn provided support services by the functions of human resources, opera-tional engineering, marketing, finance, and corporate affairs. This is schemati-cally represented in Figure 4.

Process: Alignment of the process value chain activity is primarily capacity-driven. Consideration is given to installed capacity for each of the key process ele-ments such as concentrators, smelters, and refineries. Based on this type of data, opportunities for scale and timing opti-mization are explored to ensure timing and capital efficiency.

Projects: The project portfolio for the company is defined by the project con-tent of the business plan. Each mineral asset has, by virtue of its long term plan, a sequence of projects that require ex-ecution, on a timeline, to deliver on the plan. The aggregated project require-ments across the company provide the projects portfolio.

Engineering and infrastructure: Engi-neering activities are focused primar-ily on maintenance of the existing asset base (the routine engineering activities required to maintain the engineering infrastructure) and the establishment of

the necessary infrastructure to match SLTP requirements.

Human resources: Outside of basic human resource strategy encompassing employee relations, industrial relations, HR skills and competencies, culture, and values, the core consideration that is driven by the business plan is that of alignment of capacity and capability.

Corporate affairs: Corporate affairs manifests largely in the realm of sustain-able development. The strategic long term plan provides the basis on which social and labour plans and environmen-tal management programmes are struc-tured to ensure alignment with overall business objectives.

Marketing: The interaction between the SLTP and marketing comprises two phases; the supply/demand dynamic and forecast market excesses/shortfalls that provide the initial input into the busi-ness strategic intent, and the alignment of sales contracts, by metal, based on the business plan thatarises from the SLTP.

Finance: Outside of the routine man-agement accounting and corporate fi-nance functions, finance activities are

Figure 4: Alignment of operating and support activities to the value chain

focused fundamentally on cash flow and balance sheet management for the SLTP. Mining projects are invariably long lead time, high capital requirement entities requiring cash flow management over extended periods. The ability to gener-ate pro forma annual financial state-ments from the economic models of the business plan arising from the SLTP, over a range of time periods for a range of scenarios, facilitates cash flow, and bal-ance sheet management.

CONCLUSIONStrategic long term planning of mineral resource extraction is an approach that acknowledges the nature of the deplet-ing mineral asset base, the importance of a defined but flexible project pipeline, variability in market conditions and the requirements of the operating legisla-tive environment. It is a logic construct that translates into a defined outcome - the business plan, through a series of repeated actions, using a standardized set of tools and techniques. It creates discipline and structure to allow shared understanding of the opportunities and challenges facing a mining and metals company.

REFERENCES1- Bradfield, R., Wright, G., Burt, G., Cairns, G., and Van Der Heijden, K. 2005. The origins and evolution of scenario techniques in long range businessplanning, Futures, vol. 37, pp.795–812.2- Camus, J.P. 2002. Management of Mineral Resources - Creating Value in the Mining Business. Society for Mining, Metallurgy and Exploration Inc.,Littleton, Colorado.3- Pearson-Taylor, J. and Smith, G.L. 2006. The concept of project value tracking and its application in strategic mine planning at Anglo Platinum. Proceedings of the Second International Seminar on Strategic versus Tactical Approaches in Mining, Australia Centre for Geomechan-ics, Perth, Australia, 8 - 10 March 2006. Section 8, pp. 1 - 13.4- Porter, M.E. 1980. Competitive Strat-egy: Techniques for Analysing Industriesand Competitors. Free Press, New York.5- Porter, M.E. 1985. Competitive Advan-tage - Creating and Sustaining Superior Performance. Free Press, New York. 6- Smith, G.L. 2011. A conceptual frame-work for the strategic long term planningof platinum mining operations in the

South African context. PhD thesis, Uni-versity of the Witwatersrand, Johannes-burg, South Africa.7- Smith, G.L., Surujhlal, S.N., and Manyu-chi, K.T. 2008, Strategic mine planning-communicating uncertainty with sce-narios. Proceedings of the Third Interna-tional Platinum Conference ‘Platinum in Transformation’, Sun City, South Africa, 6 - 9 October 2008. 8- Van Der Heijden, K., Bradfield, R., Burt, G., Cairns, G., and Wright G. 2002. The Sixth Sense: Accelerating Organisational Learning with Scenarios.Wiley, Chichester, UK.

M a g a z i n e

“The Brand of Turkish Mining”www.madencilik-turkiye.com

CONTACTS

Alan CleggChairman, Afrasia Mining & Energy Consulting ASHead Office: Mustafa Kemal Mah. 2146. Sokak. Demirler Atlas Plaza. No: 14/16. Ankara - Turkey

Phone: +90 (312) 219 44 15 Website: www.afrasia.com.tr

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Mining history in Turkey spans over cen-turies, if not millennia. Despite the me-andering around during the Republican era that commenced by the beginning of 1920s, the mining sector has come of an age since the first Özal cabinet (lib-eral centrist) was voted into the office by a landslide back in 1983, when there was an urgent need to undo the nearly disastrous consequences of the Energy and Natural Resources Minister (social democrat) Deniz Baykal’s ill-conceived nationalization attempts during the sec-ond half of 1970s.

The Mining Law (No. 3213) of 1985, as amended by Laws No. 5177 and 5995 respectively, marked a turning point in these fast-changing times. The Mining Law of 1985 did not only aim at tackling ensuing problems of the said messy na-tionalization, but also to break free with some of the conceptual features of the Mining Law (No. 6309) of 1954. The Min-ing Law of 1985 should also be seen in the context of Article 168 of the new constitution that came into force in 1982 following a popular vote. With the head-ing of “Exploration and Operation of Natu-ral Wealth and Resources”, the Article 168 also has a few salient hallmarks that are distinct from that of the 1961 Constitu-tion (Article 130).

In this article I endeavour to revisit the haunting discussion as to whether mines are movable or immovable in light of few examples from the legislative pieces that are currently in force. My intention is not to provide a theoretical insight, quite the opposite. I will therefore come to the conclusion that the Parliament and other law-making bodies should go around this prickly issue inherited from Roman thinking and galvanised by the German Pandectist school (i.e. the writers of the laws of the country), thus, when legislat-ing, take into account what is best-suited for the modern mining practices in these

challenging times.

INTERPLAY BETWEEN CIVIL CODE AND MINING LAWIn general, minerals remain the prop-erty of the state (people) until they are extracted from the ground. The “right to mine” is usually subject to government approval with few exceptions around the world. Thus, the license-holder acquires an interest in the “right to mine,” or in future production. Often the key ques-tion for financial investors is whether in-situ minerals are a conveyable property interest. In Turkey, in-situ minerals are not considered belonging to the people (demos) or the state in the sense of “the law of property”, but rather something “under the control and at the disposal of” the state (devletin hüküm ve tasarrufu altında bulunan). As one can see that it is blind to the Roman grouping of mov-able property – immovable property. This sort of (distinct) categorization, vis-à-vis the concept of “public property”, is in line with the good old Roman concept of “res nullius” (sahipsiz mallar), meaning belonging to no one. A bit disingenuous as it might sound, it needs to be read, to make sense of “belonging-to-no-one”, in the context of either not being able to be owned or not being able to be included in “ius privata” (private property). Until it is extracted from the soil, one needs to be hairsplitting when using classic concepts of property law.

According to the Article 5 of Mining Law of 1985, mines are under the control and at disposal of the state, therefore not in-cluded in the ownership of the land that they are in. This is a verbatim repetition of Article 4 of the Mining Law of 1954. Back then, it was such a breakthrough due to the fact that the Article 632 of Civil Code, now repealed, enumerated mines among the immovables. The Civil Code specifically, and also quite unequivo-cally, identified mines as an immovable.

The Mining Law of 1954 introduced a mine registry as well (Art. 102 et seq.). This also kick-started another tangential discussion of whether or not the mines are subject to either land registry or mine registry, or both.

Article 4 of the Mining Law of 1954 sepa-rated mines and their ownership from that of regular immovable properties, chief among them being a piece of land. However, Article 632 of the Civil Code remained intact until 2002, when it was replaced by a new Civil Code. Article 704 of the replacing Civil Code dealt with this issue once and for all, and the mines are no longer specified as an immovable. In other words, the Civil Code, after 50 years, aligned itself with the approach taken by the Mining Law of 1954. Need-

In the Shadow of Die-Hard Legal Concepts


The Corpus Juris (or Iuris) Civilis (“Body of Civil Law”) is the modern name for a collection of fundamental works in jurisprudence, issued from 529 to 534 by order of Justinian I, Eastern Roman Emperor.

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less to say up until that time it caused a considerable confusion for all concerned: industry, regulatory bodies, courts and the lawyers. This could be traced back in the case law [Nota Bene: one might very well argue, quite rightly so, that saying that the mines are not included in the ownership of the land that they are in is not quite the same as saying the mines are not immovable.].

ANYTHING LEFT BEHIND?Albeit there is the much-anticipated truce between the Civil Code and the Mining Law of 1985, there are nonethe-less remnants of this old discussion. Let me provide five examples:

1) Income Tax Law (No. 193): According to the Article 70, Para. 1 of the Income Tax Law, the mines (and quarries) is considered “immovable”. The subheading, right underneath this par-ticular Article is placed, is quite telling: “Description of the Income from Immov-able Property” (Gayrimenkul Sermaye İradının Tarifi). The Article catalogues any income from leasing out of the mines and quarries as income from an immovable property. It goes on to in-clude the income gained by successive transactions carried out by lease-hold-ers and sub-lessors.

2) Corporate Tax Law (No. 5520):By reference of the Article 3, Para. 4, the Corporate Tax Law uses the same defini-tions of income and revenue as provided in the Income Tax Law. It is only natu-ral that the Corporate Tax Law regards mines (and quarries) as “immovable” as well in the Article 30.

3) Double Tax Treaties:As of January 1, 2013, Turkey is party to seventy eight (78) double taxation treaties according to the data by Inland Revenue. While this article was being written, double tax treaty with Australia

came into force on January 31, 2013 with its publication at Official Gazette.

As known, the states, quite understand-ably, tend to use standard texts during these negotiations with a little leeway left here and there, also bearing in mind their own WTO commitments. Let us take the Turkey - Australia double tax treaty as an example since it is the most recent one that was signed into law by the Turkish President. Under the subheading of “Income from Immov-able Assets”, the Article 6, Para. 2 of this treaty prescribes what “immovable as-set” means for the signatories. What is strikingly similar is that for both states mines are considered as an immovable, and the income derived from the rights associated with the mines is therefore seen as an income from an immovable asset [Nota Bene: The double tax treaty with Canada has exactly the same ap-proach, yet a different wording].

4) Law regarding Prevention of Un-lawful Interference in the Posses-sion of Immovable Property (No. 3091):The Turkish Constitution, in its Article 35, enshrines the principle of private prop-erty. The protection provided to this end comes at a two-layered legal mechanism: judicial and administrative. In addition to the protection provided by judicial au-thorities as per a wide range of laws, the Law No. 3091 provides an administrative protection of private immovable prop-erty from unlawful interferences. It could be likened to the common law concept of “trespass to the land”. However, the pri-mary concern of this Law is not the own-ership, but the lawful possession instead. That means one, who is in the lawful possession of an immovable property, can rely on administrative protection ir-respective of whether one actually owns it or not. Administrative protection refers to the direct involvement of governor-

ates by investigating the complaint that is lodged. In case the investigation by the governorate finds that there is an unlaw-ful interference, the law enforcement officers will ensure that the unlawful in-terference ceases and does not carry on. The Law No. 3091 entails criminal liabili-ties too.

Article 1 of the Law stipulates that unlaw-ful interferences (i) in the res nullius that is under the control or at the disposal of the state (devletin hüküm ve tasarrufu altında bulunan sahipsiz yerler), (ii) in the immovable properties of which benefit belongs to the public (menfaati umuma ait olan taşınmaz mallara yapılan tecavüz veya müdahaleler) come within the am-bit of the Law. Here comes the question of if the mine licence-holders can be regarded as the possessors of a res nul-lius or an immovable property, therefore enjoy the same protection afforded to the aforesaid. If the answer is in the af-firmative, then one can perhaps safely assume that this protection could even be extended towards the lease-holder (rödovansçı). Following this line of argu-ment, both the license-holder and lease-holder could enjoy the status of “being in the possession of an immovable”, thus rely on the protection afforded by the Law No. 3091.

Anatolian Mines Map from 1890’s

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5) Code of Obligations (No. 6098):The Code of Obligations is modelled on Swiss Code of Obligations (OR, Obliga-tionenrecht), and envisages three major types for lease contracts: regular lease (lease of movables; taşınır kirası), lease of immovable (taşınmaz kirası), usufructu-ary lease (ürün kirası). Regular lease also functions as general provisions that are applicable to all types of lease unless reg-ulated otherwise. It is largely accepted in the legal scholarly world as well as in the settled case law that usufructuary lease applies to royalty agreements, otherwise called mining lease agreements in the continental legal sense. Although the first two types of lease agreements are regulated in detail, usufructuary lease is penned in a way, which shies away from delving into details, rather often makes a vague reference back to primary types of leases. Article 358 of the Code requires that unless there is no specific provision under the usufructuary lease, general provisions regarding lease agreement will apply. This is quite different from the mechanism provided in the OR.

It is by all means a foregone conclusion to discern between a regular lease and the lease of immovable. However, it is not that straightforward when it comes to this specific reference made by usu-fructuary lease back to the “general provi-sions regarding the lease agreement” since there appears to be no guidance pro-vided to ascertain which type of primary lease agreements is referred to: regular lease or lease of immovable. To answer this question, one needs to explore if a royalty agreement/mining lease is a reg-ular lease or a lease of immovable. This leads us back to the start: the good old discussion of whether a mine is a mov-able or immovable [Nota Bene: Court of Cassation is of the opinion that the provi-sions regarding the lease of immovable are not in any way applicable to royalty (mining lease) agreements.].

CONCLUDING REMARKSClassical concepts of law dating back to Roman times are now having a hard time due to the immense pressure exerted by the intricacies of modern society. The concept of property has, for instance,

been extended in a fashion to include “rights” as part and parcel of one’s estate. It is believed that this transformation was caused by the invention of the concept of intellectual and industrial property. Be that as it may, mining right was always there, included in one’s estate, and per-sonal wealth at large, even before the IP rights came to appear in different legal forms and texts.

The love-and-hate relationship between a mining right and the land that has the mines underneath (yet to be dug out) still remains to be eerily hard to grasp for some. This is further complicated by the notion of mines not being included in the piece of land (perhaps as ius fruendi, and more specifically fructus naturales), but as such entirely parting its legal des-tiny from that of the land. This detach-ment occurs on a different level, where “the right of usufruct” as a property right limited in time and scope being sort of el-evated into a full-fledged right: “the min-ing right”. What breaks the camel’s back is, simultaneously with the digging out, the legal metamorphosing that takes place from immovable as in-situ minerals into movable as mine ore (tout-venant) only to be stacked on the ground.

This is all the more true for law-makers. When regulating, the law-makers are strongly advised to look beyond the clas-sical concepts of law, such as the one of movable or immovable as the most used criterion. It would not be wrong to say that Turkish mining legislation is in gen-eral in line with the international prac-tise. In some areas, though, it still has the scars of a childhood disease genetically inherited from its Roman ancestors. Just because of that, it clearly needs a quick clean-up to strengthen this alignment to draw in the amount of investment and expertise if it really wishes to tap into its mineral resources. For that to happen, all the stakeholders need to capitalise on the experiences accumulated some-where else, meaning that a comparative approach is a must to ensure not only legislative change, but best (mining) practise as well.

CONTACTS Av. Cemâl DursunPartner at Dursun Özfırat Attorneys at Law.E-mail: [email protected]

Las Médulas is a historical site near the town of Ponferrada in the region of El Bierzo (province of León, Spain), which used to be the most important gold mine in the Roman Empire. Las Médulas Cultural Landscape is listed by the UNESCO as one of the World Heritage Sites.

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The global economic crisis of 2008 and slow-down in consumer demand mainly in Europe and the USA have created significant urgency on cost controlling for mining companies since demand and eventually price of commodities decreased drastically. Recent signs of a cool-down in the Chinese economy added further pressure on companies to control costs. The pressure is even high-er for small-to-medium sized firms such as Turkish mining companies because of the fact that it is harder for them to exploit economies of scale. For certain operations, production costs for key commodities such as copper, aluminum and nickel have already reached, or ex-ceeded, London Metal Exchange (LME) prices. Unless mining companies im-prove operational efficiency, proactively control maintenance costs and invest in cost reducing technologies, this trend is likely to continue.

Since procurement is one of the chief areas of spending for mining companies, it became a critical issue to manage and decrease costs. However, good negotia-tion skills are not the only tool to obtain significant savings and maximize value gained from relationships with suppliers.

EFFECTIVE SOURCING REQUIRES THE CORRECT SET OF STRATEGIES RATHER THAN ONLY NEGOTIATION SKILLSFirst step to achieve success in procure-ment is to comprehend the fact that there are sets of strategies to pursue before initiating negotiations with sup-pliers in order achieve best results and maximum savings. Mining companies procure a wide range of products and services with very different supply chain

and market characteristics. The purchas-ing department’s responsibility became more important as their duties expand-ed from only placing orders to suppliers to defining correct set of strategies to each item / category purchased. (Figure 1). Especially in today’s world where de-mand is very fluctuant, profit margins are lower and cost pressure is high, money spent for procurement becomes center of attention. Hence choosing correct ap-proaches and applying strategic sourc-ing are becoming cornerstones for suc-

cess of supply chain management and company’s operations. Strategic sourc-ing provides wide range of tools (Fig-ure 2), tactics and approaches in order to provide an advantageous position against suppliers during purchasing ac-tivities.

In order to apply the right strategy to each item / category purchased, com-panies need to understand their spend structure and characteristics not only from item / category standpoint but

The Procurement Trio:Improvement of Procurement by Strategic Sourcing, Supplier Relationship Management and P2P (Procure-to-Pay) Process Design


Figure 1: Deloitte’s Procurement Trio

Figure 2: Deloitte Value Creation Framework for Strategic Sourcing

Internal Customer

Item / CategorySuppliers

Figure 3: Spend Analysis 3-D Approach

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Figure 6: Supplier Segment Examples

Figure 5: Category Positioning Matrix

Figure 4: Porter’s Five Forces

also from supplier and internal customer standpoint.

A three dimensional analysis of spend (Figure 3) provides a complete picture of a company’s purchase volume and features. Item / Category centric analysis is important to observe what items / cat-egories are crucial for the company and what the total volume purchased. Sup-plier based analysis provides an over-view of the total company wide business volume with providers. And analyzing spent from internal customer perspec-tive helps understanding their needs, ex-pectations and minimum requirements.

However, understanding the spend by itself is not adequate to decide on which strategies to apply, understanding the supply market is crucial. Strategies to pursue would change significantly if pro-curement department had multiple sup-pliers with equal quality and service level to choose or just only one supplier in the market who can provide items / catego-ries (Such big mining machinery vs. com-pany owned automobiles-trucks). One of the best methods to analyze the supply

market is Porter’s Five Forces Approach (Figure 4). It helps to understand charac-teristics of supply market and company’s position against suppliers.

After spend and market analysis is com-pleted, company will achieve a complete comprehension of item / category’s im-portance for the company. Usually items / categories are classified as strategic, le-verage, commodity and bottleneck (Fig-ure 5). Since sourcing strategies differ significantly depending on the criticality of the item / category, it is very critical for the mining company to correctly use all information gathered and accurately po-sition the item / category.

However strategic sourcing initiatives need to be accompanied with cross-functional collaboration. Best in class organizations involve internal “custom-ers” such as finance and accounting, engineering, operations, maintenance, safety/health/environment, and quality assurance, which will contribute to the initiative’s success. This approach en-sures not only the availability of the sup-plies but also results in lower total cost, streamlined processes, and increased responsiveness to customers’ changing needs. Collaborative strategic sourcing initiative produces best results.

UNDERSTANDING CRITICALITY OF SUPPLIERS FOR THE FIRM HELPS SET GROUND RULES FOR RELATIONSHIP MANAGEMENTAnother step towards excellence in procurement is Supplier Relationship Management (SRM). In practice, SRM includes strategic planning and man-aging all interactions with goods and/or service providers to develop closer and more collaborative relationships with sup-pliers in order to maximize benefits mutu-ally. It is the systematic, enterprise-wide

01 March 201374

assessment of suppliers’ assets and capa-bilities with respect to overall business strategy, determination of what activi-ties to engage in with different suppliers, and planning and execution of all inter-actions with them.

Correct segmentation (Figure 6) of sup-pliers depends on correct assessment of the current business relationship (business volume, current supplier per-formance, price / discounts received, etc.), supplier’s capabilities (innovation, technical and system infrastructure, etc.) and prospective relationship based on company’s targets and vision. Thus, the systematic approach in segmentation becomes a critical issue. Criteria of seg-mentation needs to be very sound and accepted company-wide.

Segmentation of suppliers provides a framework for relationship management (Figure 7). For example, a company may choose to pursue system integration, collaboration in innovation, long-term relationship development, investment partnership, regular cross-company meetings to improve performance and upper management level communica-tion for their strategic suppliers whereas, for transactional suppliers purchase or-der initiated relationships with little or no system integration. Moreover, seg-mentation of suppliers provides also guidelines for performance manage-ment. Therefore SRM is crucial for com-panies to manage current relationship

with suppliers and define the future es-tate of their relationships.

Furthermore, in order to maximize value gained by SRM, it needs to be supported by SRM systems or modules integrated with company’s ERP system entailing ca-pabilities of providing standardized tools and templates (common SRM tools and templates), enabling supplier relation-ship data management (single source of data), and enabling relationship visibility (access to consistent reports facilitates executive and management reviews).

COMPLEXITY IN PROCURE TO PAY PROCESSES DECREASES VISIBILITY, CONTROL AND EFFICIENCY OF CONTRACT MANAGEMENTThird cornerstone of Procurement Trio is the restructuring Procure to Pay pro-cesses (Figure 8). Companies should un-derstand the fact that procurement does not end at creation and sending pur-chase order to suppliers. Restructuring Procure to Pay processes means optimiz-ing the processes related with purchas-ing and recognizing that it extends to include accounts payable and payment processes. The goal of restructuring is not about speeding them up, it is about the optimization of processes introduc-ing control and efficiency as well as re-ducing risk and clearly defining roles and responsibilities of each task. The key ob-jective is to ensure that sourcing savings are delivered by providing purchasing processes in compliance to contract. By restructuring processes, mining compa-nies become capable of managing costs of operations and administration, cut-ting length of cycle from sourcing and order to application of payment, gaining insight into vendor relationships and ne-gotiate optimal payment terms, support internal controls and ensure compliance

to contracts and agreements with sup-pliers.

Restructuring process can be accom-plished by two-step approach. First step, understating of current sub-processes (purchase order creation, managing re-ceipts and returns, receiving invoices and controlling, managing payments etc.) Moreover, current system structure and its capabilities are needed to be understood in order to assess whether any techno-logical improvement is required. After un-derstanding as-is state of processes, a gap analysis should be carried on and then each sub-process should be redesigned considering the roles and responsibilities of each person related to processes in line with industry best practices and company targets. Even though it is not mandatory, supporting procure to pay processes with reliable IT landscape increases benefits of methodology.

In today’s world where cost pressure is constantly rising, demand volatility is high and uncertainty hovers around mining companies, it becomes crucial to manage efficiently, control thoroughly and take advantage of every dollar spent to highest extent. While companies may choose to pursue only one or may be two sections of Procurement Trio, in or-der to accomplish excellence in procure-ment and exploit full benefits, compa-nies should pursue all three aspects of Procurement Trio.

Figure 7: Deloitte’s Supplier Segmentation Matrix

Figure 8: High Level Procure-2-Pay Processes

CONTACTS

Alper GünaydınManager, Deloitte ConsultingE-mail: [email protected]

Pay SuppliersReceive GoodsApporove RP & CreatePurchase Order

CreatePurchase Request

XVII.INTERNATIONAL

PREPARATIONCONGRESS&EXHIBITIONI S T A N B U LG R A N D C E V A H İ R H O T E L1-6 OCTOBER 2013

COAL

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01 March 201376

Need For a New Amendment?The elimination of certain provisions of Mining Law No. 3213 (the “Mining Law”) regarding environmental permits by the Constitutional Court Decision of June 2010 has led to the suspension of certain environmental permits by the administrative authorities. In order to cover the gray areas and fill in the gaps caused by the Constitutional Court Deci-sion, the government made substantial revisions to the Mining Law and enacted an amendment on 24 June 2010 (the “Amendment”).

DIFFICULTIES IN OBTAINING PERMITSTo clarify the vague provision of the Min-ing Law, the Amendment provided that operation permits shall be issued within three years after obtaining the surface rights and necessary environmental per-mits. The Amendment, on the other hand, provided only one year for operation li-censes which have not been issued an operation permit or have only one year left for the termination of the three year period as of the date of the Amendment.

Although the Amendment intended to

speed up the permitting process and prevent the existence of idle licenses, the three year and one year (for old li-cense holders) limitations posed a se-vere threat for operation license holders of losing their licenses due to the gap in communication between central and local public authorities and the thick bureaucracy of the government. Such a limitation alarmed license holders and especially foreign investors who are not familiar with the Turkish public authori-ties and their bureaucracy. Approximate-ly 600 operation licenses issued prior to the Amendment were cancelled since the license holders failed to obtain the required permits within the envisaged one year period. With the three year pe-riod provided for new licenses coming to an end, license holders have started to question whether such period will be extended.

OBTAINING FORESTRY PERMITS BECAME EVEN MORE DIFFICULTOn 16 June 2012, the Prime Ministry is-sued Circular No. 2012/15 which made all transactions relating to State-owned lands subject to the approval of the

Prime Ministry. Such Circular caused an ambiguity and the Ministries have re-frained from taking any action in terms of permits.

Like all actions relating to State-owned lands, forestry permit applications were sent to the Prime Ministry for final ap-proval. Pending the approval of the Prime Ministry, issuance of forestry per-mits, and accordingly operation permits, were suspended.

In addition to radically slowing down the approval of forestry permits, the Circular has been particularly criticized for the ambiguity in the Prime Ministry’s scope of review on the applications. Despite heavy criticism from many sectors, there is still no clarity regarding the scope of review or the criterion to be followed during such procedure. The Prime Minis-try has also been criticized for not having a special office with the technical knowl-edge required for the review of such ap-plications.

Due to the fact that no threshold is be-ing applied for such additional approval procedure, even forestry permits per-taining to very small areas of land, such as drilling holes, are made subject to the lengthy approval procedure. Such bu-reaucratic complication and ambiguity is unfortunately expected to discourage foreign investment in infrastructure proj-ects in Turkey.

FINANCIAL CAPABILITY The Amendment brought a new con-cept: the “financial capability”. Explora-tion license applicants must certify that they have financial capability equal to the amounts determined by the Min-ing Department which are considerably high amounts. Such capacity must be evidenced by the value of the compa-


01 March 2013 77

ny’s immovable assets, bank accounts (e.g., any type of cash deposited, loans obtained from banks, capital advances), share certificates, capital, machinery and equipment, etc.

This concept has also been criticized since it is not clear for which purpose the Mining Department needs to see the applicants’ financial capability or how it contemplates to benefit from assets such as the cash in bank accounts or the machinery and equipment. The use of such requirement remains rather vague and appears to have a restrictive and dis-couraging effect on investors.

UNPERMITTED PRODUCTIONThe Amendment has extended the pen-alties applicable to unpermitted mine production and transportation. In ad-dition to the imposition of an adminis-trative fine, the license security of such license holder committing the unper-mitted production shall be forfeited and the amount of license security shall be doubled.

An operation permit is required for each separate mine but not for any by-prod-

ucts. Accordingly, it is important to an-swer the following questions in order to define an unpermitted mine production:

What is production? What is a by-product?

The Mining Legislation does not clearly define “production”. Based on interpre-tation of the mining legislation and the established practice of the Mining De-partment, production means extraction of the mineral from soil where the op-eration license holder gains commercial benefit from the extracted mineral.

The volume of the secondary mineral is important in defining “by-product”. If the secondary mineral to be produced is not

a considerable amount then it should be considered a by-product and should not be subject to a separate operation permit.

The determination of whether the li-cense holder gains a commercial benefit from the extracted mineral or whether the amount of secondary mineral is con-siderable is at the discretion of the Min-ing Department. In practice, it has been observed that the Mining Department applies a very wide scope to “unpermit-ted production” so as to include by-prod-ucts as well. Thus, an amendment needs to be made to clarify the definition of unpermitted production for the purpos-es of avoiding the application of unjust sanctions.

CONCLUSIONThis Amendment has not proven to be the solution for the needs of mining companies and investors have started to feel an urgent need for new amend-ments. In order to meet the investors’ ex-pectation for a simple and clear law there is still a need for further revision of the mining legislation. However, despite the needs and the increasing expectation in this regard, the Mining Department has not yet published a draft for an amend-ment.

CONTACTS

Şebnem Önder1, Ayşe Eda Biçer2

Çakmak Avukatlık BürosuAttorneys at LawAddress: Piyade Sokak, Portakal Çiçeği Apt. No: 18, C Blok, Kat: 3, 06550, Çankaya - Ankara - Turkey

1) Partner, Çakmak Avukatlık Bürosu 2) Associate, Çakmak Avukatlık Bürosu

Phone: +90 (312) 442 46 80Fax: +90 (312) 442 46 90Website: cakmak.av.tr

01 March 201378

In the last decade, the contemporary international mining industry has un-dergone unprecedented globalization, consolidation, strides in adopting more sustainable social and environmental practices, as well as the investment in new technologies. In my career thus far I have had the rare opportunity to be part of two major automation initiatives, one underground, the other surface, as well as directly develop and implement busi-ness intelligence technology through-out mines in North America. From these experiences, it is clear that the most challenging forms of technological in-novation are those that affect not only machines, but business process, where people, information, and decisions are affected. It is far simpler to implement a technology such as new fuel additives or a new engine in a haul truck than imple-menting and gaining high utilization from a new enterprise system or similar information-based technology since implementation and exploitation affect people and what they do in the work-place.

The past decade has seen technology vendors either developing, or consoli-dating to offer a full suite of information-based business intelligence solutions for every mining process, from production drill monitoring to fleet management systems through to integrated mine planning / performance management solutions. Corporate leaders and senior mine personnel hire my consulting com-pany, or other technology experts, to provide advice on what specific product to buy. The truth is, within the same cat-egory, a specific vendor’s technology is most often of marginal difference when compared to the enormous impact implementation and business process change-plays in the outcome. Such changes can almost never be delivered

by the vendors themselves. Any vendor claims that complex business intelli-gence technology is easy to implement and used to its fullest extent are false. Mining has seen the successful introduc-tion of technology directly related to economies of scale, namely larger equip-ment, but as the economies of scale are reaching their limit, the next cycle of mining innovation will be business intel-ligence.

I will use ‘business intelligence technol-ogy’ as meaning any technology that uses information for making improved decisions. Fleet management systems are a key example, as being one of the first and most successful uses of in-pit data to improve truck dispatching and in-pit performance management. Other in-pit equipment monitoring technol-ogy from a variety of vendors frequently have several benefits, first, as an aid to the equipment operator. For example, GPS-based dozer monitoring typically provides the dozer operator a virtual sec-tion-and plane view of his machine, and the position of the blade with respect to the ground, so that he can cut or fill to very exact specifications. The benefits of such operator-aids are relatively easy to achieve. However, such technology also typically has the ability to gener-ate performance information, such as the productivity of the operator, delays, or equipment health information. Mak-ing full use of such data requires much more effort. Furthermore, integrating the databases from these technologies is difficult since mines typically use tech-nologies from a variety of vendors who rarely truly cooperate, IT support staff do not have the skill-set to develop nor maintain a data warehouse. A data ware-house is a subject-oriented, integrated, time-varying, non-volatile collection of data, used primarily in organizational

decision making, in laymen’s terms, a database of databases, linked in a man-ner that allows the user, also known and business intelligence analyst, to view data from a multitude of systems in a single format. For example, a data ware-house could contain data from several databases, all related to a particular ma-chine. For example information relating to operating cost, maintenance records, and productivity information about the same dozer could be found in separate databases. Traditionally, if mine planners want to determine dozing costs, they would have to consolidate data from all those sources, likely into a spreadsheet. Some of the advantages of a data ware-house over traditional (relational) data-base technology are its ability to process substantial data in less time, collect data from multiple sources, facilitate under-standing from users, and track processes temporally (track changes over time). Data mining is the process of using sta-tistical algorithms or queries tools such as Online Analytical Processing (OLAP) cubes. A business intelligence analyst is the person who not only mines the data, but analyses the results in a manner that would help devise action that would have impact.

A common expression in the business intelligence field is “drowning in data, starving for information”, meaning there is a huge quantity of data available, but few mechanisms to make effective use of it. The changes necessary to make effec-tive use of such data include education regarding IT and systems engineering, business process redesign, and informa-tion management. All fields not part of a mining engineer or manager’s education.

It is for this reason, I have contacted professional mining engineering soci-eties and key publications throughout


BusinessIntelligence In Mining

the globe, offering to create a forum to share case studies, advice from a wide variety of experts, and showcase exam-ples of business intelligence technology. Case studies in particular are important, since publication of less-than-successful implementations of technology is rarely discussed candidly. I believe strongly in the benefits of such technology, its potential impact to contemporary min-ing, and would like help industry avoid common missteps, such as thinking that to gain the benefits of such technol-ogy; one can simply purchase it from a vendor. Current venues for sharing experiences regarding technology are

international mining conferences, most often in English and Spanish, where true experiences with technology are often communicated outside of the for-mal technical talks. As Turkey’s mining industry continues to consider purchas-ing the information-based technologies developed in North America or Australia, it is increasingly more important to com-municate potential pitfalls so that they can be avoided, in the native language. Furthermore, due to time constraints, it is increasingly more challenging for se-nior mine or corporate managers to par-ticipate in such conferences, and learn of the challenges and potential solutions

regarding investing in such technology, leaving online or printed forums such as this magazine, the ideal form of commu-nication.

CONTACTS

Sean Dessureault1, M. Mustafa Kahraman2 1) Assoc. Prof., The University of Arizona, Depart-ment of Mining and Geological EngineeringE-mail: [email protected]

2) The University of Arizona, Department of Mining and Geological EngineeringE-mail: [email protected]

NEW in 2013:Coal and pet coke consumption and tradeLignite & sized coal supply and consumption issuesCoal freight-flows from ARA ports for further delivery to the MED region

For Speaking Opportunities, please contact: Anna Sydorenko [email protected] +380567943394(ext.204)

III International conference “Mediterranean Coal Markets Conference” will take place 16-17th of September in Istanbul, Turkey to get together coal suppliers and consumers from Turkey, MENA countries, Europe, Russia and Ukraine.

Mediterranean Coal Markets 2013 will focus on: • Coal in the Mediterranean countries – trade dynamics in the region • Key suppliers to the MED countries: Colombia, SAR, USA and Russia • Alternative regions for coal supplies to the MED consumers (Indonesia and Canada) • Coal-fired power generation in the MED: Morocco, Italy, Iberia and Israel • Coal and pet coke consumption by cement Industry • Role of Turkey in coal markets in the Mediterranean basin • Supply and consumption volumes of lignite and sized coal in the Mediterranean countries Who should attend: • International coal and lignite producers / traders / consumers • Petroleum coke suppliers and marketing managers • Coal-fired and lignite-fired power stations • Cement enterprises • Energy traders and marketers • Coal Exporters / importers • Terminal operators / stevedoring companies • Shipping companies: owners / charterers/ brokers / operators / agents • Mining equipment / systems suppliers • Financial institutions: investment banks / infrastructure funds

Interactive events during the conference:1. Round-table discussion: “Mediterranean Coal Markets 2013” will be organized between key industry players to exchange their opinions on current situation in the Mediterranean region and to make short-term forecasts.2. Individual negotiations: Aiming to encourage international trade and establishment of new business relations we conduct individual negotiations with coal suppliers and consumers in their separate conference offices.

Check for more details on our conference website page..

Regarding the participation, please contact: Darya Botchenko [email protected] +380567943394(ext.205)

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