A Complete Overview of Turkey`s Copper

Transcription

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ISSN: 2146-9423
Mining & Earth Sciences Magazine
01 March 2013 | Vol 2 | Number 4 | www.miningturkeymag.com
•A Complete Overview of Turkey’s Copper
with Park Elektrik’s Madenköy Mine
• Turkey: The Rising Star
in Global Mining
Interview with M. İlker Aycı, President of ISPAT
• In the Shadow of Die-Hard Legal Concepts
contents
Mining Turkey is published biannually by Mayeb
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2....... FROM THE EDITOR
4....... TURKISH MINING SECTOR NEWS
14....... SANDVIK MINING TURKEY - EVALUATION OF 2012 AND EXPECTATIONS
FROM 2013
17....... INVICTUS GOLD LTD - Tamer Gezbul
18....... ORTADOĞU DRILLING LTD
20....... A COMPLETE OVERVIEW OF TURKEY’S COPPER PRODUCTION AND
ADVANCED STAGE PROJECTS - Mining Turkey Magazine
28....... PARK ELEKTRİK’S SİİRT MADENKÖY COPPER FIELD - Ciner Group
34....... TURKEY: THE RISING STAR IN GLOBAL MINING - M. İlker Aycı
40....... TURKEY TAKES A LEADING ROLE IN NATURAL STONE RESERVES
- Mehmet Çapik
48.......
52.......
56.......
60.......
68.......
72.......
76.......
78.......
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 Photo
Ciner Group’s mining company Park
Elektrik operation Siirt Madenköy Copper 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 production 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
1
Editor
Where Does the Sector Go with the Regulations
and Legislations as the Mining Boom Continues?
O. Çağım Tuğ | [email protected]
Mining in Turkey has been experiencing
a “mining boom” for nearly the last ten
years due to providing sustainable mining activities by particularly gaining foreign 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 companies. 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 offered solutions to certain key issues, they
also brought about some new problems. Moreover, the legal environment
subsequent to the amendments to the
legislations and permissions has set a conundrum for mine manufacturers. In regard to this particular matter, the articles
titled “In the Shadow of Die-Hard Legal
Concepts” and “Need for a new Amendment?” 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. Mining holds a significant place in the economic 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, whereas 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, explorations 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 shortcomings and support exploration and
project development activities in the
forthcoming period, and that even more
than the target added value can be obtained 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 pointed out earlier, the big companies that
achieved remarkable success in different 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 resident 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 companies that have succeeded in going into
production.
In the 4th issue of Mining Turkey, we intend 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 Investment Support and Promotion Agency of
Turkey (ISPAT) President M. İlker Avcı will
give you valuable information on the investment opportunities in the country. I
hope that the following articles will spur
your interest, and I welcome your suggestions 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 preparation of the journal.”
Subscribe for new Issue alerts and more!
2
01 March 2013
News
Turkey’s Mining Products Exports Continued to Increase in 2012
According to Turkish Exporters’ Assembly, 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 followed 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.)
Ferro Alloys and
Other Products
Natural Stones
Metallic Ores
Industrial Minerals
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 ceremony 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 rehabilitation, 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 General 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.
Lignite Sites and Power Plants are to be Included in the Incentive
The new incentive system announced in
June 2012 will be initially revised to include lignite and lignite-based thermal
power plants. According to the story by
Dünya Newspaper, lignite mines and
power plants will be included in the incentive system. It is reported that largescale investments with tenders carried
out in 2012 will also be considered within the scope of this practice.
While the preparations reach the final stage as implied by Deputy Prime
Minister, it is reported that 6,730 million tonnes of lignite which is more
than half of 12.1 billion tonnes of total lignite potential identified so far in
Turkey could be allocated, in the two
year period of 2013 - 2014, for electricity generation upon this new incentive
decision.
Within the scope of Afşin - Elbistan region
investment agreement undertaken during 2012 and early 2013, following Tufanbeyli, 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, electricity generation will be initiated upon a lignite capacity of 6.7 billion tonnes.
Zorlu’s Plan for 2013: Nickel Production in Manisa
Having undertaken 900 million USD
worth of investments in 2012, Zorlu Holding intends to invest in its companies in
2013 at a rate that is similar to the previous year. Zorlu Holding’s CEO Ahmet
Nazif Zorlu noted “In 2013 we will be investing 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-
4
01 March 2013
ments in our fields of excellence with a
view to further enhancing our technological 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 employ 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 processed domestically as of 2008 targeting 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 regions throughout the country.
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Centerra Gold Acquired 100% of
Öksüt Project and Released Reserve Update
TSX 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 Stratex’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 exploration 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 indicated 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 accounting for 2012 production) to 11.1
million ounces of contained gold, compared to 8.1 million ounces as of December 31, 2011, based on the new Kumtor
KS-13 open pit mine expansion.
Empire Mining Changed its Name to
Columbus Copper to Highlight Their Target
Empire 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 Columbus 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 Columbus 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 Investments
Dedeman Holding signed a loan agreement of 175 million USD with Denizbank
its future investments mining and tourism sectors in January. In his statement,
Dedeman Holding CEO Murat Dedeman
indicated that the new collaboration with
Denizbank has to do with the public offering of business lines developed under the
umbrella of Dedeman trademark and further 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 offering of Dedeman Mining in Canada and
London stock markets. According to the
company, the essential reason for preference 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 Concentrate
Manufactured by Özdoğu İnşaat Ltd
Completing 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,
6
01 March 2013
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 producing molybdenum concentrate. Following
the studies carried out, in August, commercial molybdenum concentrate was
produced in Turkey for the first time. This
is considered to be a significant development in the Turkish mining sector.
Ciner is to Produce Soda in Kazan with Chinese Partner
Ciner Group and Chinese Tianchen
Corporation signed a contract on the
construction of the soda ash facility
and electricity generation facility in Ankara - 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 Zhiyuan 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 countries 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 completed 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. Moreover, 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.
Mine Permitting Proceeds at Ariana’s
Red Rebbit Gold Project
Ariana Resources plc., the gold exploration 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 Environmental Project Summary Document to the
Ministry of Environment and Urban Planning 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 below 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 increase in base metal content towards the
Ardala porphyry. According to the press
release, development of the project is being conducted in a JV funded exclusively
by Eldorado.
Tenders for Thermal Power Plants of
Seyitömer and Kangal Concluded
The tender for Electricity Generation
Company’s Seyitömer 600 MW thermal
power plant has been concluded. Upon
making it to the top two among 16 bidders 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 carried 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 licenses. Electricity Generation Company’s
8
01 March 2013
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%.
Plant and the Treasury’s real estates utilized 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.
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 million USD. The tender was concluded upon
the bulk privatization of Electricity Generation Company’s Kangal Thermal Power
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 Construction 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.
Non Executive Chairman:
Peter Unsworth
Managing Director:
Dr Mike Jones
Technical Director:
Michael Busbridge
Non Executive Director:
Richard Basham
Managing Director, Turkey:
Tamer Gezbul
Major shareholder:
Impact Minerals ~75%
Options:
INVICTUS MADENCİLİK SAN. VE TİC. A.Ş.
Mustafa Kemal Mah. Dumlupinar Bulvari
Tepe Prime B Blok No: 266/130
Çankaya, Ankara
Turkey
Tel: +90 312 286 1023
Email: [email protected]
Web: www.invictusgold.com.au
IVGOA
INVICTUS GOLD LIMITED
ABN 34 145 891 907
309 Newcastle Street
Northbridge WA 6003
Australia
Tel: +61 8 6454 6666
Web: www.invictusgold.com.au
Frontline Gold Purchased Remaining 10% of
Turkish Assets Including Menderes Project
TSX-V quoted company Frontline Gold
announced that it has purchased remaining 10% ownership of its Turkish subsidiary 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 epithermal gold environment.
Frontline Gold made another release on
Menderes project and announced that
the final payment on the property option 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 commenced 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.
VTG Holding’s Second Coal Mine
in South Africa Is Now Operational
Sustaining its coal production in conjunction with its partner in South Africa, 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 organized in the South African facility as part
of Schoongezicht Mine’s grand opening 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 mining 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 objectives 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 mining sector such as Canada, Australia and
the USA.”
10
01 March 2013
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 Colombia 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 burning 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 efficiency compared to average initiatives.
Kantarcıgil noted that VTG Holding has
been carrying out initial exploration activities 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 Copper 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 employment 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 satisfied 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 stainless 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 nickel to meet the demand. Underscoring
the strategic importance of nickel for the
country’s economy, Kantarcıgil suggested 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.
Mediterranean Resources signs MOU
with Ramsey Group, as Strategic Partner in Turkey
Mediterranean Resources Ltd. announced 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
another Turkish strategic partnership.
Thereafter, Mediterranean intends to
float 15% of Akdeniz to the investing
public in Turkey via an IPO on the “venture exchange” (the GIP) or the Secondary 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.
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 company will be incorporating an as yet unspecified company in the Ramsey Group
as a 20% shareholder in Akdeniz, and a
further 5% stake will be in the hands of
Turkish Construction Company NTF
Gave Up its Plans of Gold Production
Stratex International plc announced that
its joint-venture partner, NTF İnşaat Ticaret Ltd Şti (NTF), proposed that both
parties monetise their respective investments 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 expecting to take İnlice project to production 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 Minerals 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 production 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 operating. According to Doğan News Agency
(DHA) Kışladağ Gold Mine Governmental
and Public Relations Manager Hakan Ünal
indicated that the 47.5 tonnes of gold produced 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 development 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 indicated “Our aim is contribute more and more
to the production, the economy and employment. Kışladağ Gold Mine is titled as
the biggest gold mine in Europe based
on the amount of gold produced annually. 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 companies in 2012 in terms of providing employment in Uşak province upon achieving a local employment of 80% and currently employs over 1000 people.”
01 March 2013
11
Correction About Tunçpınar Madencilik
News in Mining Turkey Vol. 3
Yusuf Ziya Yetkiner, the authorized person at Tunçpınar Madencilik, have sent a
written statement to our main office regarding a misinformation in a news story
published in Madencilik Türkiye Magazine’s 25th issue and Mining Turkey Magazine’s 3rd issue with the title “Tunçpınar
Madencilik Will Invest 1 Billion USD to
Cevizlidere”.
news about our project and company.
We hope that the necessary works will
end positively to invest and new employment opportunities will develop.
Only then it would be possible to mention some numbers.”
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 Yetkiner’s statement as is, as per our part on
the mistake.
EXPLORATION GOES ON AT
CEVİZLİDERE PROSPECT
“We are at the primary stages at our copper prospect in Cevizlidere and planning 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 indefinite to announce “$1 billion investment”
and “employement about 500 to 1000
people” as it has been mentioned in the
Re-edited version of the news after the
statement is as follows:
Tunçpınar Madencilik authorities stated
to our magazine that the exploration
program continues at the company’s asset and one of the Turkey’s most promising copper deposit Cevizlidere prospect at Ovacık - Tunceli. According to
Tunçpınar’s PR Manager Hacı Karakuş’s
statement to Hport, there are still numerous works to be accomplished to
clarify the edges of the mineralization.
Following this work, some drilling programs have to be done to reveal the
mining site and then a feasibility study
has to be accomplished. Karakuş continued “We are not planning to produce
gold in this prospect because the gold
mineralization is low grade. Our company informed its legal liability about
the subject to the relevant institutions,
organizations and representations. Human health, environment and protecting sentimental values are very important for us. Due to moral responsibility,
environmental and community values
will be protected along with a successful practice of actual laws, legislations,
international standards for a sustainable mining activity.” and show the
company’s sensibility.
Tunçpınar Madencilik is a joint-venture
of Çalık Group and Alacer Gold. According 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 Amasra
The first swing of pickax under 710 meters below ground for the hard coal mine
in Bartın - Amasra owned by Hema Energy 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 Environment and Urban Planning Erdoğan
Bayraktar as well as Hattat Holding’s CEO
Mehmet Hattat and Hema Industry’s CEO
İbrahim Hattat were present, the ministers upon being briefed by Hattat Holding’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 reported reserve of 573 million tons, has up
to 6,000 calories. Mining Turkey has been
informed that there are about 400 underground workers half of which have Chinese 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 2012
1.7 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
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01 March 2013
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 between 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.
Alkim Introduced its Çayırhan Sodium Sulfate Facility
Alkim Alkali Kimya introduced to the media its mine in Çayırhan that Alkim established 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 investment of 50 million TL. Anadolu News
Agency (AA) reported in September that
Alkim Chemistry established the facility
in Ankara Çayırhan which has been operating for the past 8 months on account
of having the 195 million tonnes of “glauberite” reserve, equivalent to 65 million
tonnes of pure sodium, processed. The
facility has an annual sodium sulfate production capacity of 150,000 tonnes.
In his statement, company’s CEO Reha
Kora indicated that the facility which embodies a number of international precursors in technical and many other aspects,
currently has a daily production capacity 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 automated, contemporary and integrated facility
capable of generating its own electricity.’’ 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.
Pozitif Mining Exports from Pınarbaşı to China
Pozitif 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 reintroducing 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 processing 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 Development Agency with a view to im-
proving employment, production and
exportation. It is reported that the
company has managed to lower its energy costs, been using the time more
efficiently, hired 11 more people and
increased its production and importation 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 Reserves
Koza 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 reserves had hit 3.7 million ounces.
As of the end of 2011, company had 11
million ounces resources and 2.3 million ounces reserves. Considering the
338,000 ounces of production in 2012,
the annual rate of increase in the reserves 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 addition to the current resources indicated,
the international independent audit organization reported a potential increase
of about 50%.
Moreover, in its statement to İstanbul
Stock Exchange (ISE), the company announced to have initiated construction
activities for Kayseri - Himmetdede Project 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.
Stratex and Lodos Agreement for Muratdere Has Been Completed
Stratex International Plc., the AIM-quoted, owner of İnlice and Altıntepe development 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-molybdenumgold porphyry deposit has a JORC-compliant Inferred Resource of 51 million
tonnes grading 0.36% copper, 0.12 g/t
gold, 2.40 g/t silver, 0.0125% molybdenum and 0.34 ppm rhenium.
01 March 2013
13
Profile
Sandvik Mining Turkey - Evaluation of
2012 and Expectations from 2013
EVALUATION OF 2012
Sandvik 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, metallic 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 (quarrying, 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 restructured. 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 ORDER
CG850 Gyratory Crusher order - given
by Tüprag Metal Madencilik AŞ, an affliation 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 bearing, hydraulic adjustment, secured concave liners, hydraulic tank instrumentation system and the unique Automatic
Setting Regulation System. Sandvik’s
CG series of primary gyratory crushers
complements its well established cone
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01 March 2013
KOZA GOLD - HİMMETDEDE
HEAP LEACH CRUSHING AND
SCREENING PLANT
Koza Gold, one of the key gold producers 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 Himmetdede, Kayseri.
CJ815 is in operation for heavy duty applications with its strong structure and
unique design, easy repair and maintenance 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.
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.
The CH series are unique with thier ASRi
and special designs, which enables the
machine to protect itself against the uncrushable tramp materials. Sandvik cone
crushers are competitive with their compact design, free of any hydraulic and
mechanical units on the outer body of
the crusher .
The machine is capable of drilling a
hole of 2.5m diameter and a depth of
250m.
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, Himmetdede Project includes also one unit
of CJ411, two units of CH660 and required screens and feeders to prepare
leach pad liner material.
İSDEMİR - AUBEMA HAMMER
MILL REBUILD
The biggest hammer mill supplied by
Sandvik is in operation in İsdemir AŞ
since 2006. The rebuild work for the rotor (11 tons) and discs include the replacement of the main shaft. The main
shaft will be manufactured in Sandvik
Aubema factory in Germany and will be
delivered in Q1, 2013.
VIBROCONE - A CRUSHER WITH
GRINDING PERFORMANCE
The Vibrocone crusher is the next generation 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.
SARGIN AŞ - RAISEBORING
MACHINE
Sandvik Rhino 1088DC Raiseboring machine was purchased by Sargın AŞ in
2012, which is the first sale of this machine in Turkey.
The machine is operating at Balya, lead
- zinc mine owned by Esan - Eczacıbaşı.
SANDVIK STANDARD PLANTS
(MODULAR)
EXPECTATIONS FROM 2013
Sandvik Mining Turkey will be supporting the mining industry by focusing on
the following outstanding products in
2013.
Sandvik Mining offers standard plants
for green-field projects. The flexible, well
optimized and versatile design of Sandvik standard plants shortens the erection and commissioning time which
01 March 2013
15
results in quicker return of investment
even up to 5 months!
The idea behind the Sandvik standard
plants is enjoying the advantage of perfectly pre-designed modules with Sandvik
engineering quality. Primary jaw crushers,
secondary and tertiary cone crushers and
several feeders and screens in different capacities, 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!
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01 March 2013
HYBRID CRUSHERS
Sandvik 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 between the counter-rotating rolls using 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 system with integrated overload protection
to realize different product sizes. Having
one of the rolls as moveable also protects the machine against tramp materials together with the smart automation
system.
CONTACTS
Sandvik Mining Turkey
Address: Ivedik OSB, Arı Sanayi Sitesi 1122 Cad.
1417 Sok. No: 60 Yenimahalle, Ankara - Turkey
Phone: +90 (0312) 551 49 00
Website: mining.sandvik.com
Profile
Invictus Gold Ltd
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 companies such as Chesser Resources Limited
and Stratex Limited but in the older footsteps of the ancient gold miners such as
the Lydians. Perhaps it should not be said
that other reasons such as Turkey’s fabulous history, scenery and food as well as
the friendly welcoming people were also
Drilling at the Himmetdede South Project
part of the reasons for setting up in the
country.
Dr. Mike Jones and Mr. Tamer Gezbul celebrating
the one of the delights of Turkey
The Managing Director of Invictus Madencilik is Mr Tamer Gezbul, a geologist
from Istanbul who worked for Cominco
in the 1980’s. Tamer has introduced Invictus to many projects and companies
and has been the main driving force
behind the rapid set up and commencement of operations for the company. Together with Operations Manager Mehmet Gokceer, and Mike when he has been
in the country, many thousands of kilometres 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 projects 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 completion 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 actively encourages you to contact Tamer
Gezbul at Invictus Madencilik’s office in
Ankara if you have projects that may be
of interest.
CONTACTS
Tamer Gezbul
Managing Director, Turkey
Invictus Madencilik San. ve Tic. AŞ
Address: Mustafa Kemal Mah. Dumlupınar Blv.
Tepe Prime B Blok No: 266 / 130
Çankaya - Ankara - Turkey
Mobile: +90 (530) 113 32 20
E-mail: [email protected]
Website: www.invictusgold.com.au
01 March 2013
17
Profile
Ortadoğu Drilling Ltd
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 deepdrill holes. Over the years, with its experienced drill crew and own manufactured
drill rigs, our company has positioned itself 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 coring, 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 geothermal 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
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01 March 2013
projects. Especially with our own manufactured deep hole drill rigs, Ortadoğu
Sondaj is capable of drilling deep slim
holes in the exploration phase of geothermal and oil / gas industry.
Our target is to complete all of our projects 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 : 36/13
Balgat 06540 Ankara - Turkey
Phone: +90 (312) 472 21 04
Website: www.ortadogusondaj.com
01 March 2013
19
Article
A Complete Overview of Turkey’s
Copper Production and Advanced Stage Projects
Turkey has very diverse mineral deposits
due to its extremely complex geology
and tectonic setting. A wide variety of
primary metallic minerals and a significant 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 appreciated by both international and nongovernmental local investors. Changes
in Turkish Mining law during the past
decade have stimulated investment in
the mining sector and provide an opportunity 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 industry 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 Cyprustype and Kuroko-type VMS deposits in
Turkey, especially in the productive northeastern Black Sea coast area (the Pontide
Belt). Exceptionally, Siirt - Madenköy Copper 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 important porphyry Cu-Au-Mo deposits
recently found and these advanced level
projects are planning to start production 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 appear 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 immediately 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 hosted Cu in central Turkey (Figure 1).
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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01 March 2013
Copper production of Turkey covers just
20% of the country’s copper needs currently 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 concentrate to be exported and imported
back as final refined copper products. In
order to overcome this deficit the country 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 copper smelter which is located at Samsun, a
coastal city at Black Sea Region, produces 40,000 tons/year of blister copper and
220,000 tons/year sulfuric acid.
The 2012 Turkish copper ore exportation 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 monthly 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 levels and starting from Park Elektrik’s (Ciner Group) Siirt - Madenköy Copper Mine
which is one of the most important copper projects today. Some brief production 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 projects, Aldridge Minerals’ Yenipazar polymetallic project, Özdoğu İnşaat Ltd.’s
Balıkesir - Havran Cu-Mo project, RCR’s
(Red Crescent Resources) Sivas and Hakkari copper projects, Pilot Gold and Teck
Resources joint venture İzmir - Halilağa
porphyry Cu-Au project, Alacer Gold’s
Cevizlidere Cu-Au-Mo and Karakartal CuAu porphyry projects, Mediterranean’s
Taç - Çorak Cu-Au deposit, Özaltın Holding’s Cerrattepe Cu-Au porphyry project.
Summaries follow the mine updates
hereunder.
PARK ELEKTRIK’S SİİRT MADENKÖY COPPER MINE
Ciner 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 capacity of 1,000,000 tonnes/year production from underground, Siirt Madenkoy
becomes Turkey’s largest producing metallic mine. The mine life of the project
is more than 20 years and the company
is on the transition process from underground 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 MINES
Purchased by Cengiz Holding via the
Turkish privatization of the production
assets of Eti Bank, the company undertakes copper mining at Kastamonu Küre
and Artvin Murgul facilities and operates the copper smelting factories at
Samsun. Production of copper and pyrite 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 Murgul plant extracts raw copper ore over
2,700,000 tonnes per year through 3
open-pit mines, and processes to produce 75,000 tonnes of copper concentrate 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 Samsun Smelter is the sole facility that produces copper metal from ore in Turkey
and the facilities consist of Smelting,
Sulfuric Acid and Concentrator facilities. 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 copper production; 90,000 tonnes/year
copper concentrate. The company is
still working for improvement on the capacity of production and percentage of
copper tenor and a cobalt leaching facility is under design together with BRGM/
France technology (Bio Leach Plant).
01 March 2013
21
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 improvement on the capacity of production and
percentage of copper tenor. A Hydroelectric Power Plant with the capacity of
2 x 2.35 MW operates at the site.
INMET MINING’S ÇAYELİ BAKIR
MINE
Çayeli is an underground copper and
zinc mine wholly owned by Inmet Mining. 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 production commenced in November 1994.
Çayeli Bakır İşletmeleri AŞ (CBI), a wholly
owned subsidiary of Inmet, has the surface rights to operate on the immediate
mine property and the deposit is a VMS
Kuroko type with the mining method being transverse sublevel retreat with paste
and waste filling. The mine is expected to
operate until at least 2019 and the mineral reserves of the mine from a NI43-101
report dated back 2006 are as follows:
Category
MTonnes
Cu%
Zn%
Proven
4.70
3.77
5.85
Probable
6.90
3.57
5.8
11.60
3.65
5.87
Total
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 copper 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 MINE
Demir Export AŞ started mining activities at Lahanos (Giresun) Underground
Copper Mine in 1990. Mining activities
ceased several times between 1994 and
22
01 March 2013
Demir Export’s Giresun - Lahanos Mine
2006 because of fluctuations of metal
prices in the global market. Copper concentrate production continues at Lahanos 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 divided into five sublevels according to the
geometrical layout of the ore body. Production 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 underground 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 produced 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 MINE
Yenice mine is located at north-east of
Yenice county of Çanakkale Province.
Within the licence area, Triassic aged
units like quartzite-meta arcosis, metasiltstone, meta-diabase, gabbro, and
towards west, neogene aged dasitic igneous 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 reserve 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. Production values of the last three years are
given as follows.
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
TURKEY’S IMPORTANT ADVANCED
STAGE COPPER PROJECTS
ALDRIDGE MINERALS’YENİPAZAR
POLYMETALLIC PROJECT
The Yenipazar polymetallic VMS deposit
(Ag, Cu, Pb, Zn) is the Aldridge Minerals’
most advanced property and is located
at the geographic center of Turkey, approximately 220 km east-southeast of
the capital of Turkey, Ankara. The Yenipazar Project has a currently deter-
•• All of these sulphides indicate Volca-
Contained Metal
Au
(g/t)
Ag
(g/t)
Category
Tonnes
Indicated
29,669,000
0.95
31.3
369,000
0.47
25.5
Inferred
Cu
(%)
Pb
(%)
Zn
(%)
0.31
1.01
1.47
0.18
0.94
1.89
Au Eq
(g/t)
Au
(M oz)
Ag
(M oz)
Cu
(M lbs)
Pb
(M lbs)
Zn
(M lbs)
Au Eq
(M oz)
2.42
0.90
29.85
204.8
660.2
961.2
2.30
1.88
0.01
0.30
1.5
7.7
15.4
0.02
Total Mineral Resources of Yenipazar Project
mined strike length of at least 1,700 metres averaging 200 metres in width and
approximately 20 metres in thickness
at depths between 30 and 190 metres.
During 2012, Aldridge successfully completed a 10,000 m diamond drilling program, which confirmed the continuity of
the resource and resulted in a better understanding of the geology of the Yenipazar deposit and its mineralized zones.
Aldridge is currently building on its December 2010 Preliminary Economic Assessment with a feasibility study that it is
expect to complete in March 2013.
(Please find Aldridge Minerals’ news release dated 11/26/2012 for detailed information)
COLUMBUS COPPER’S KARAPINAR
AND DEMİRTEPE PROJECTS
Please find detailed information
about the projects at the page 23.
ÖZDOĞU İNŞAAT LTD.’S BALIKESİR HAVRAN CU-MO PROJECT
Özdoğu İnşaat Ltd. won the government tender of the rights for the copper - 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 certificate of “Environmental Impact Assessment (ÇED)” from “Ministry of Environment and Urbanization” on 20.11.2009,
the “Business and Work Permits” from
Balıkesir Province Special Administration 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 million tonnes @ 0.32% Cu and 0.04% Mo.
After the positive results of subsequent
24
01 March 2013
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 estimated at 13 years, the company will produce 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 produced and the company is conducting a
research - development project to reach
28% grade for Cu and 55% for Mo in its
concentrates.
nic Massive Sulphide origin and the
latter two; chalcocite and covellite are
interesting as strong indicators for a
significant zone of secondary enrichment (supergene) of a major copper
sulphide deposit. Generally though
we are looking at a broadly disseminated 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 alteration products of ultramafic rocks) are
found in the lower ultramafic parts
of many greenstone belts worldwide
where it is often referred to as quartzcarbonate-fuchsite schist (e.g. Barberton greenstone belt in the Mpumalanga province of South Africa).
As such Listvenites have a common
spatial and temporal association with
orogenic-type gold deposits.
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 alteration patterns at the Kapılı Tepe property at Kızılmezra are very similar in their
orogeny and genesis to several large
economic deposits being mined and developed elsewhere in Turkey, e.g. Cevizlidere Copper Project in Ovacık county of
Tunceli by Tunçpınar Madencilik a JV between Alacer Gold and Çalik Group; and
Muratdere Copper/Molybdenum/Gold
project also in Tunceli recently bought
by Lodos Maden AŞ a wholly owned subsidiary 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 sulphides also appear;
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 Polarisation”) geophysical profiles that have
been generated, initially by Falconbridge
and subsequently independently verified by consultants to RCR, the surface
mapping and chip sampling, the structural geological review and lastly the
drilling and core sampling, collectively
define a number of clear physically measureable blocks of potential resources.
The actual measured physical dimensions of the shear hosted mineralisation,
and the dip orientation which is aligned
to the clearly visible and mapped struc-
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 potential 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 higher 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 copper and the by-product nickel and gold
values.
This could be attributed to localised enrichment and/or less time exposure to
the oxidizing process.
Through the utilisation of the measured
dimensions of the blocks and accounting for losses in the same way as the MZ,
but with higher attributable geological 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 mineralised material.
Falconbridge estimated a target of
100Mt for the SEZ in the same area and
therefore with all the evidence and independent 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 approximately 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 Statement RCR has not as yet engaged anyone to complete any independent Mining studies. However with the fact that
there is sufficient data and information
with respect to the spatial nature and
overall dimensions of the targeted mineralised zones for extraction, this makes
it possible for a concept mine design to
be executed in house.
at least another five years.
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, although the study was certainly serious
and classed at least as an OME (“Order of
Magnitude Estimate”).
Collectively then the SCP is to be designed 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).
Any mine design at the SCP is ofcourse
clearly to be premised on a multiple
open pit design in the potentially foreseeable 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, allow high grading if required to take advantage of price peaks in the commodities cycle and allow blending to optimise
Leach pad delivery and process management as a whole.
Within the confines of the future confirmation of the mineralised zones being
open at depth, underground designs for
extension of mine life may be contemplated at that time.
It is envisaged that the MZ will be mined
by one large pit centred in the wide outcropping 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 balance of the life of the mine which will be
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 interconnect with each other in some areas.
These pits would be ramped up sequentially 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.
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 effects) and gold (750,000 oz to 1 Moz).
It was announced in late 2012 by RCR
(TSX-RCB) that it was looking to monetize (sell) the SCP as its size and requirements for development capital are beyond 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 development of this potentially very significant project.
Hakkari Copper Projects
RCR undertook a significant satellite imagery survey of the overall project area
and extensions in Hakkari very early on
in its tenure and work in the province
01 March 2013
25
in 2008. The results identified a number
of significant anomalies within its area of
control and in its licences already held by
the company.
grown rapidly with significant widths
of copper-gold mineralization extending 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 excellent 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%.
Further ground truthing was done during 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 measured polymetallic grades for Copper,
Gold, Zinc, etc.
Pilot Gold’s 60% joint venture partner,
Teck Resources Limited’s Turkish subsidiary is the project operator.
These deposits offer the company significant 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 being 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.
18,000 m of drilling was completed in
2011, culminating in a project-first resource estimate that returned an Indicated 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).
PILOT GOLD AND TECK RESOURCES
JOINT-VENTURE İZMİR - HALİLAĞA
PORPHYRY CU-AU PROJECT
ALACER GOLD’S CEVİZLİDERE CUAU-MO AND KARAKARTAL CU-AU
PORPHYRY PROJECTS
Halilağa is development-track copper-gold
porphyry located in northwest Turkey, discovered by Fronteer Gold. The project is located 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 interpreted to be a single widespread mineralized system containing porphyry-related
high-sulphidation style gold and coppergold mineralization.
Cevizlidere is located in Ovacık Township, Tunceli Province within the mountainous east-central Anatolian region
of Turkey 600 km east-southeast of Ankara. The project is 80 km by road to the
northwest of the provincial capital of
Tunceli (pop. 26,000) and 20 km southwest of the town of Ovacık (pop. 5,800),
the project’s logistical base.
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
4,914
0.08
0.60
0.004
Oxide resource (2)
inferred
Halilağa Resource Estimate
Strip Ratio: 2.5: 1
(1) At a 0.2% copper equivalent cut-off grade.
26
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, phenocryst-poor, feldspar porphyry dikes, all
of which combine to make up a NW-SE
elongate composite porphyry stock.
Cevizlidere falls in the copper-gold-molybdenum class of porphyry copper deposits. The mineralization is associated
with multiple porphyry intrusions and
zoned alteration and mineralization.
Cevizlidere Project
Since its discovery in 2007, Halilağa has
Tonnes (x1000)
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 targets. Based on this work, a highly successful 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 undertaken in 2004 and 2005, leading to a declared mineral resource which remains
open to the southeast and at depth.
(2) At a 0.2 g/t gold cut-off grade
01 March 2013
95
Alacer Gold is the operator of Cevizlidere,
which is a 50/50 joint venture with Turkish partner Lidya Madencilik San. ve Tic.
AŞ and is currently undertaking preparatory 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 Çöpler mine.
Alacer Gold picked up the Karakartal
tenements in 1998 and conducted a
targeting exercise, culminating in an initial eight-hole diamond drill program in
2001. This work was followed up in 2008
with a campaign involving 22 holes for a
total of nearly 7,800m of diamond drilling. 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 carbonates 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 potassic alteration zone.
Drilling at Karakartal during 2012 has
been aimed at better defining and extending 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 CUAU DEPOSIT
Mediterranean Resources Ltd. is actively
working on its two 100% owned properties which were in Teck Cominco’s possession during 90’s and they spent more
than 4 million USD for the development
of the projects. During 2006 Mediterranean 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 Mediterranean spent 4.5 million USD of exploration on Taç and Çorak. On March 2008,
Mediterranean announced new NI 43101 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 goldequivalent 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 capped basis with a threshold of 13 USD/
Mediterranean’s Taç Project
tonne contained metal value (and inferred 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 contained 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);
the requirements, all the exclusive rights
will be transferred to the second highest
bidder, Eti Bakır (Cengiz Holding) according 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.
REFERENCES
1- “THE MINING INDUSTRY OF TURKEY”
Anac, S., Tamzok, N., 2nd Balkan Mining
Congress Book of Proceedings, 2007, p.
37-43
2- “MINERAL EXPLORATION: WHAT,
WHERE AND WHY IN TURKEY” Yigit, O.,
2011, Mining Turkey, vol.1, p.12-19
3- “MINING IN TURKEY” GBR Reports,
2012, Mining Turkey, vol.2, p.35-63
4- www.gentorresources.com/s/TurkishCopper.asp?ReportID=526928
•• Metallurgical
testing has clearly indicated flotation to be the most appropriate method of metal recovery
and concentration.
ÖZALTIN HOLDING’S CERRATTEPE
CU-AU PORPHYRY PROJECT
Özaltın 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 February 2012. According to the agreement,
Özaltın Holding should start the production 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
“All the project summaries in this
article are collected from companies and/or press releases and
up-to-date websites of the companies. Outdated or unconfirmed
information about projects are
excluded from the article.”
CONTACTS
Mining Turkey Magazine
Head 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
01 March 2013
27
Profile
Park Elektrik’s
Siirt Madenköy Copper Field
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, including the Hitites, the Urartu, Persians
and the Ummayyad have ruled, farming 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 dominated by old valleys despite deeper and
younger valleys in East and South East
Anatolia, allowing for topography where
agricultural activities and livestock feeding 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 province of Turkey in terms of oil considering
the exploration and production drillings.
Also, another significant resource which
28
01 March 2013
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 existence 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
ESTABLISHMENT
It 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 operated in the past.
It is known that the first prospection studies 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 prepared 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 commission 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 GENESIS
Siirt Madenköy Copper field is located on
a fault zone between South-eastern Anatolia 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 -
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 + chalcopyrite + sphalerite, pyrite + chalcopyrite +
magnetite or only magnetite diffused
claying - chloritization and ends with occasional crack filling mineralization. The
mineral mass dips 50° - 60° north. Mineralization 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, marcasite, galenite, pyrrhotite, bornite, covellite, chalcocite, valerit, bravoit, linneit,
fahlerz, gold and silver while the main
gangue minerals are quartz, chlorite, barite, 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% cadmium. 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 Madenköy Copper Bed as “Cyprus Type Massive
Sulphite” bed.
Reserve
Category
Tonnage (t)
Cu
(%)
Measured
31,182,000
2.26
Indicated
6,433,000
2.79
Measured
+Indicated
37,615,000
2.34
2,206,000
3.38
39,821,000
2.40
Inferred
Total Reserve of
the Project
Specific Gravity (t/m3)
4.05
stopping underground mining.
UNDERGROUND DEPLETES,
OPEN PIT PRODUCTION
COMMENCES WITH INCREASED
CAPACITY
Within 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, required studies have been made, and the
contractor companies have started overburden removal. It is planned to cease
underground mine production with the
commencement of open pit production. Till then, all the ore which cannot
be mined with open pit and left underground 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. Depending 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 underground until +770 meter levels. To clarify
long term mine planning geotechnical
drillings are being conducted at site and
for this purposes 10,000 meter geotechnical 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 chosen to sign agreements with the villagers
without implementation the decision,
and has purchased almost all of the required 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 AMOUNT ESTIMATED
ACCORDING TO JORC
STANDARTS
Since 2006, approximately 5 MT of identified reserve is mined from underground
to produce copper concentrate. It is estimated that 34 MT of reserve is left.
Current yearly raw ore production capacity of the plant is approximately 1.5
- 1.8 MT. Considering the current reserve
amount and production capacity, it is expected 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 convert to open pit mining in early 2013, fully
01 March 2013
29
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 production will follow.
Since the commencement of mining at
site, Company increased its production
every year as sated below. With the decision of to continue mining with open
cast, company revised raw copper ore
production capacity and copper concentrate production capacity accordingly. 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 concentration 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
SALES
According to the information provided,
yearly raw ore processing and Cu concentrate amounts until end of 2013 are
given below;
Processed
Copper Ore
(Tons, wet)
Produced Cu
Concentrate
(Tons, wet)
13,439.47
2006
149,975
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
With the capacity of 1,000,000 tons of
ore per annum is produced from underground Siirt Madenköy becomes Turkey’s largest producing metallic mine.
The underground production costs are
satisfactory for the Company at the moment. 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 production costs considering that steel support
is occasionally required every 1 meter.
30
01 March 2013
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 concentrate 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 Üretim AŞ, which entered copper mining
business in 2006, has produced solely
concentrate copper till 2011. With a new
decision, starting with 2011, the company has started to produce cathode copper. In line with the agreement between
Karadeniz Bakır İşletmeleri and the Company, 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 copper 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 barren 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 machines here. They performed the blasting, cleared the waste, and immediately
they need to strengthen the gallery with
shotcrete. Therefore, the most advanced
technologies and mine equipment in Turkey 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 formation steel mesh, shotcrete and rock bolts
can be used. As production method, sublevel 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 approximately 200 meter ramp length. Between 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 gallery advancement, advance occurs as 3 - 4
meters depending on the formation. The
ore mass accumulated as a result of blasting 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 being crushed, is sent to plant stockpile via
band conveyors. Before the construction
of underground crushing and band conveyor system, trucks were used to transfer 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 construct a band conveyor system. Today,
with the jaw crusher system located 135
meter under the surface and a band conveyor system of 650 meters, the problems have been eliminated, and a more
profitable production is achieved.
Madenköy underground mine continues to work underground with 5
underground trucks, 5 underground
shovels, 2 simbas, 3 jumbos, 5 underground cement mixers and 4 shotcrete
machines.
PROCESSING PLANT
The ore, recovered as a result of mining
activities are carried with belt conveyors to the stock area (belts carry ore for
600 - 650 meters underground and 170
meters at the surface) while the ore produced 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 processing plant increased to 5,000 tonnes following the capacity expansion studies.
New crushers and belts are included in
the system within the scope new capacity expansion work. Previously 80 cm
conveyor belts were used in the plant,
however, at the moment 120 cm capacity new plants are being used. With new
cells and mills which have been added to
the system, 5,000 tonnes of daily capacity 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 under 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:
float the copper mineral (chalcopyrite).
This allows for the separation of chalcopyrite from pyrite and floats chalcopyrite, resulting in copper concentrate.
In the plant also slime distributor and
sodium silicate is used to press the silicates. Sodium silicate is prepared as 10%
solutions in the reactive tanks.
The ore, which are grinded into liberation point, arrive at the product conditioner at upper cyclone. In the conditioner, 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 product is sent to copper concentrate thickener. Meanwhile, the waste from 10 m3
cells is generally united particles. At this
stage, regrinding scavenger circuit enters 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 thickener 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 accumulated 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 water 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 storage 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 simultaneously monitored from the computers
at the automation center. Using the
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 different 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 expansion, 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
01 March 2013
31
of new mill and crushers to the processing plant.
Total budget of 2013 is around 236.5 MTL
(app. 100 million EUR). 145 MTL of the total budget will be spent for investment
which covers box-cut excavation, expropriation, waste storage area, equipment
to transfer waste to storage area, river
rerouting tunnel and new road building.
installed Courier device, it is possible to
reflect and monitor the analysis of inlet, concentrate, waste samples and the
monitoring of the reactives. The electronic weigh-bridge in the system allows
for the calculation and automatic screening of daily amount of production.
While Courier device gives approximate
results, more precise results are obtained
the laboratory in the Plant. In the laboratory, copper, iron, lead, mercury, zinc and
sulphur analysis can be precisely performed. Here, crushing, grinding, floatation experiments can be performed for
raw ore, and also technological tests can
be conducted. Also, screen analyses and
limestone quality analyses can be performed in the laboratory in the Plant
II. CLASS WASTE STORAGE AREA
AND ENVIRONMENT
According to the information the company received, the volume of waste
storage area is 2,500,000 m3. A rehabilitation program has been planned
by Park Elektrik Üretim Madencilik AŞ
and the project has been approved by
Ministry of Environment an Urban Affairs. Following the rehabilitation studies 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 positive 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 application projects are approved by Ministry
of Environment and Urban Affairs. A ten-
32
01 March 2013
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 environmental 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 Public 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 operation.
CURRENT STATE OF PRODUCTION
AND INVESTMENT PLANS
In line with the increase in reserves and
the positive global conjuncture in copper markets, the Company has expanded
its capacity in 2011, increasing the raw
ore processing capacity of the processing plant from 750,000 tons to 1,200,000
tons. Influenced by the capacity expansion 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
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 regard, in the first semester of 2012, 46,852
wmt copper production was achieved
while 38,488 wmt of concentrate copper 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 RESPONSIBILITY
Two doctors and four health officers provide 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 attention 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 Company work towards opening the closed
roads, next to the Highway teams. The
company machinery also helps the busses 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
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 indispensable capacity for Siirt is created
considering the spare parts, food and
transportation.
the mining activities in the second.
Other than these direct services provided to the villagers, Park Elektrik have
observed the healthcare center, primary
school (Turgay Ciner Primary School),
housings for gendarme stations, all constructed by Park Elektrik Üretim Madencilik AŞ in place. Another important social
responsibility project of the Company
is to construct a vocational highschool
in Şirvan in 2013. The company will construct the biggest vocational school in
the region, including the workshops, infrastructure 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., playing an important role in the capacity development 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 villagers and only 2 of them are leased from
outside of Siirt. Also, the Company supports the employment of Madenköy Ltd.
Şti. within the subcontractor companies.
CONCLUSION
474 employees work in Madenköy Mine
of Park Elektrik Üretim Madencilik AŞ, a
company which is 452th among the 500
biggest industrial establishments of Turkey 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 repair work is done with spare units and
therefore the activities continue non-stop
365 days. The efficiency of the plant working non-stop reaches up to 96%. According 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 villagers, providing the villager further employment 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 Siirt region is Madenköy Copper Mine.
The establishment provides an employment 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
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 automatically 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 mentioned that no significant accidents have
occurred in the Company, which has received 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 excavate. The Company pays similar attention
to worker wages. By this way, it is estimated that the added value in the region is
significant.
The company also gets consultant support from national and international
experts to achieve safe and sustainable
mining. For processing, Outokumpu, for
mine plan SRK and İstanbul Technical University, for reserve reporting Micromine,
for waste recovery Hacettepe University
are among some of the establishments
that the Company receive consultancy
services from.
CONTACTS
Ramazan Yön
General Manager
Ciner Group
Address: Sim Söğütözü İş Merkezi Söğütözü Cad.
No: 14/D Beştepeler - Ankara - Turkey
Phone: +90 (312) 287 65 55
01 March 2013
33
Interview
Turkey: The Rising Star
in Global Mining
Prime Ministry Investment Support and
Promotion Agency of Turkey (ISPAT) is in
charge of promoting Turkey’s investment
opportunities to the global business community 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 composed of country and sector experts who
have extensive experience in the private
and public sectors, ISPAT serves as a reference point for international investors and
as a point of contact for all institutions
engaged in promoting and attracting investments at national, regional and local
levels.
Mr. Aycı answered the questions of “Mining Turkey” on Turkey’s investment environment and provided an overview of the
Turkish mining industry.
Turkey is promoting foreign direct investment (FDI), but what
makes Turkey a desirable investment destination for foreign
companies?
(İA:) Turkey has plenty of advantages
34
01 March 2013
as an investment destination for international companies, which include its
outstanding economic performance, dynamic 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 robust economic performance has enabled
Turkey to attract a tremendous amount
of FDI, totaling more than USD 120 billion over the past decade. Moreover, Turkey’s impressive economic performance
is expected to continue into the future.
According to a recent report issued by
the OECD, the Turkish economy is expected to grow with an average real GDP
growth rate of 5.2 percent between 2013
and 2017. As such, Turkey will be the fastest 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 people every year, which of course makes it
the fastest growing population in Europe.
Most importantly, half of Turkey’s population is under the age of 30, making Turkey
the country with the largest youth population in Europe, both in proportion and
absolute figures. Considering the increasing 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
populations, Turkey offers excellent opportunities with its growing, young and
dynamic population.
Last but not least, Turkey’s geo-strategic
position allows investors to access lucrative markets around Turkey including Europe, 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 advantage, 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 overall competiveness and being a
point of reference for international 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 providing assistance to investors before, during
and after their entry into Turkey. ISPAT serves as a reference point for international
investors and as a point of contact for all
institutions engaged in promoting and
attracting investments at national, regional and local levels.
Active on a global scale, ISPAT operates
with a network of local consultants in Belgium, 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 approach with the backing of all governmental 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 economic development; to this end, ISPAT is
relentlessly working to attract qualified
investments, which boost employment,
increase exports whilst decreasing imports, transfer technology to Turkey and
bring added-value to the Turkish economy. ISPAT is also one of the most important stakeholders to improve Turkey’s
competitiveness. As a point of reference
for global investors, ISPAT is interacting
with investors on a daily basis to facilitate their business. Meanwhile, ISPAT is
also working closely with the regulatory
bodies to make Turkey more competitive.
01 March 2013
35
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 minerals 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 processing of its own mineral reserves.
Does ISPAT charge for the services it provides to investors?
(İA:) No, our services are absolutely freeof-charge.
What is the current state of development 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 Eldorado Gold are continuing their operations in Turkey.
Why is mining important for Turkey?
(İA:) The mining sector provides the necessary raw materials to industries such as
automotive and construction, which are
the backbones of our economic growth.
The automotive industry produces 1 million cars annually and exports 730,000
units, mainly to Europe. The FDI stock rose
36
01 March 2013
from USD 2.3 billion in 2002 to USD 9.2
billion in 2010. Meanwhile, the production capacity doubled from 800,000 cars
in 1997 to 1.6 million in 2011. Ford, Toyota, Renault and Hyundai are increasing
their capacity with new models; this corresponds 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 sector 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 investment is to be injected into urban renewal
projects over the next ten years.
Most of Turkey’s mineral reserves
are buried underground. What
is the country doing to uncover
these reserves?
(İA:) Exploration activities can be divided into governmental and private operations. The governmental exploration
activities are carried out by the General
Directorate of Mineral Research and Exploration (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 environment 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
dustry. We also want to uncover the country’s mineral reserves with new exploration projects and increase our raw material production in particular. Through this
increase in production, the mining sector
will be able to support the domestic industry’s demand for low-cost and highquality input.
What do you expect from PDAC
2013?
(İA:) We expect to reach as many in-
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, reserves 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 development of the Turkish mining
sector?
(İA:) As I mentioned before, mining is a
sector of top priority for the Turkish government and my Agency. In addition to
energy, machinery, automotive, petrochemicals and agriculture, ISPAT sees mining as a strategically and economically
38
01 March 2013
important sector, where we would like to
see more investments. In this regard, we
provide investors with sectoral information and market analyses, facilitate license
and incentive applications, and carry out
promotional activities specifically designed for mining companies, including briefings on the new incentives regime and
regulations. We will be attending PDAC
2013 and hosting a “Turkey day” in Toronto with the participation of relevant governmental bodies, as well as companies
operating in Turkey.
The mission of the Prime Ministry Investment 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 production and wealth created in the mining in-
vestors as possible and promote the
Turkish mining industry and investment
environment. We also want to give detailed information about the business
opportunities in the mining sector, including 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 explorations and geology of Turkey, Turkish
Mining Law, licensing procedures and
their implementation. In addition to rare
earth minerals, the program will also focus on success stories and opportunities
in gold mining in Turkey. During the session, we would like to feature the General Directorate of Mineral Research and
Exploration (MTA), the General Directorate of Mining Affairs (MİGEM), and Eti
Mine Works General Management (ETİ
MADEN). In the afternoon session, private companies will make presentations on their operations and share their
success stories.
What incentives does Turkey offer for the mining industry?
(İA:) With a robustly growing economy
and a young and dynamic population,
Turkey offers lucrative investment opportunities for global investors. While
international investors can find a secure
and favorable investment climate in Turkey, 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 guarantees equal treatment to all investors
without differentiating between local and
international investors. With the latest
incentives regime, companies can now
benefit from many incentives including
favorable tax deductions, special investments zones, land allocation, exclusive
R&D and innovation support, training of
workers and so on. The new incentives
regime aims to reduce the current account deficit, boost production, and reduce
dependency on imported intermediate
goods. This entails increasing investment
support to Turkey’s lesser developed regions, improving efficiency in industry and
logistics, and investing in mid and high
technologies.
Effective as of January 1, 2012, the program offers investors VAT exemption and
corporate tax reduction, as well as social
security premium support, interest payment support and land allocation. The incentives 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 incentives for strategic investments, the main
goal is to support sectors where there is
considerable trade deficit, offering strong
support regardless of region, and so reduce the current account deficit. The mining 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 advantages that make Turkey more competitive than other countries, in
particular with regards to the legal framework?
(İA:) As I said, Turkey has recently amended its mining regulations in order to attract 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
market, followed by the Middle East.
What is your final message to
potential partners, visitors and
investors?
(İA:) I believe that the opportunities in
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 metals. The exploration period is currently
7 years, and after this, the mining activities can begin following the issuance
of an operational permit. Over the past
decade, Turkey has embarked on a comprehensive 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 region, thanks to the harmonization of regulations with the European Union, a single
party government that has launched
significant structural reforms since the
banking crisis in 2001, and a distinguished 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 steelmaker, 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 27EU 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
Turkey’s mining industry are not fully
known by global investors as they are not
well informed about Turkey, its investment environment and rich mineral resources. 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 investors 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 investors 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 contact 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 information requests on investment issues, you
may reach ISPAT via e-mail at info@invest.
gov.tr. You may also access our industry
reports and information on Turkey’s investment environment and incentives
through our official website at www.invest.gov.tr.
CONTACTS
M. İlker Aycı
President
Rebuplic of Turkey, Prime Ministry Investment
Support & Promotion Agency (ISPAT)
Phone: + 90 (312) 413 89 00
Website: www.invest.gov.tr
01 March 2013
39
Article
Turkey Takes a Leading Role in
Natural Stone Reserves
INTRODUCTION
Since early times, people have shown
desire to use natural stone in their buildings and places of residence. The improving standards of living over time have
driven people to use natural stone for its
style and durability. This material gradually has become a symbol of wealth and
prosperity. The contemporary admiration for natural stone at an age of machines 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, travertine and onyx). Due to its geographical
position on the Alpine Belt, Turkey has
many assorted types and large volumes
of marble reserves. Furthermore, Turkey’s developing industry and production technology has placed the country
amongst the leading stone processing
nations. The fact that the natural stone
sector in Turkey has managed to industrialize 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 Afyonİscehisar 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
40
01 March 2013
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 amusement park in the world, 18,000 m2 of
Turkish marble was used.
e) In addition to these, many luxury hotels, airports, schools, hospitals, cultural
and business centers preferably used
Turkish marble in their floor coverings.
COMMON CHARACTERISTIC
PROPERTIES OF TURKISH
MARBLES
Turkey has one of the world’s largest natural 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 manufacturers with its huge reserves and well developed processing industry. The properties 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 qualities 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 sidewalks of 173 different countries. Since
2000 Turkey’s natural stone exports increased 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
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
Countries
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
7.2
6.8
10.5
53.1
998.2
1,327.4
1,455.0
9.6
1,232.4
1,560.2
1,663.7
6.6
Singapore
Other 20
countries
Total
Table 1: Country wide distribution of the exported
natural stones of Turkey
NATURAL STONE POTENTIAL OF
REGIONS
1000
888
844
800
739
439
688
643
600
400
814
772
700
425
339
244
200
161
146
107
73
49
39
0
2006
2007
Blok Marble
2008
2009
Processed Marble
2010
2011
Others
Figure 1: Export of the Turkish natural stone
As a result of its geological location, Turkey 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.
Region
Location
Workable Reserve
(x1000 m3)
Marmara
Balıkesir
1,300,000
Bursa
135,000
Kırklareli
role in this sense. The export and production of natural stone products have
an important share in the mining sector
that has improved in parallel to the investments in recent years (Figure 1).
The most value-added-product in exports 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 second place with 688 million USD.
NATURAL STONE POTENTIAL OF
TURKEY
In 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 marble producers in the world with its 4.000
years of production history starting from
the Marmara Island. Turkey has a significant 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, conglomerate, breccia, magmatic rocks, slate stone,
diabase and travertine that are with a
special emphasis on marble. Turkey marble reserves are shown Figure 2.
Aegean
33,500
Afyon
135,000
Aydın
9,000
Izmir
Central Anatolia
1,500
Muğla
181,000
Kütahya
200,000
Uşak
500,000
Ankara
2,000
Eskişehir
960,000
Kırşahir
165,000
Niğde
Figure 2: Natural stone reserves in Turkey
250,000
Grand Total
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 estimates, Turkey has 33% of the world total
natural stone reserves (Table 2). In accordance with some sources, this resource is
estimated to be able to meet the world’s
natural stone need for 80 years.
Reserves
Marmara
38%
Aegean
26%
Table 3: Workable natural stone reserves in
Turkey and distribution of the regions
Reserve Quantity (m3) x 106
Reserve Quantity (Ton) x 106
589
1,590
Likely
1,545
4,171
Possible
3,027
8,172
Total Potential
5,161
13,934
Proven
3,872,000
Turkey
33%
World
67%
Table 2: Turkey’s natural stone reserves and share Turkey’s natural stone reserves in the world
01 March 2013
41
Region
Marmara
Aegean
Mediterranean
Location
Adapazarı
3,500
Balıkesir
7,500
Bilecik
640,000
Bursa
240,000
İzmir
175,000
Manisa
500
Adana
7,000
Burdur
2,000
Hatay
60,000
Ankara
Central Anatolia
Limestone Reserve
(x1000 m3)
Eskişehir
16,000
475,000
Kayseri
3,000
Konya
70,000
Black Sea
Bartın
1,000,000
East Anatolia
Elazığ
20,000
Southern East
Anatolia
Diyarbakır
Total
Region
Marmara
Aegean
Central
Anatolia
Black Sea
Location
Bursa
Travertine Reserve
(x1000 m3)
1,200
1.850
35.8
Denizli
652
12.6
Afyon
629
12.2
Tokat
410
7.9
Çanakkale
252
4.9
Muğla
200
3.9
Denizli
Burdur
500,000
75,000
İzmir
120
2.3
Çankırı
210,000
Other
1,054
20.4
Total
5,167
100
Nevşehir
100
Sivas
75,000
Bolu-Karabük
10,000
Table 6: Natural stone reserves of Aegean Region
NATURAL STONE POTENTIAL IN
AFYON
Total
995,300
Aegean region takes the first
It’s known that there are
Provinces
Quarries (%)
place in the list of the marble
over 250 kinds of stones
production licenses. There
Balıkesir
27.00
with different colors, texare three important regions
tures and designs in TurAfyon
23.60
for marble resource in the
key. The natural stones
Bilecik
11.14
Turkey, the first is south and
sector today, with its
Denizli
7.58
west of the Marmara sea,
high production, export
Bursa
6.92
the second is in the southpotential and domestic
Muğla
6.40
central Turkey and the third
market
consumption,
Eskişehir
4.03
is in south west Turkey, espemakes an important
Uşak
2.37
cially around Yatağan in the
contribution to the TurkKırklareli
1.90
Muğla and Aydın provinces.
ish economy. There are
Kırşehir
1.18
more than 2000 quarTable 5: Distribution of
ries, small and medium
NATURAL STONE
the natural stone quarries
sized 2,000 factories and
POTENTIAL OF AEGEAN
in Turkey
9,000 workshops and
REGION
Others
11%
also 300,000 workers in
The Aegean Region has
the natural stone sector.
very rich natural stone re27% of the quarries are
serves and approximately
situated in the city of
70% of the total natural
Balıkesir, 24% in Afyon,
stone reserves of Turkey
and 11% in Bilecik as
are in this region. Turkey’s
Figure 3: According to the
summarized in Table 5.
is known to have a total of
regions the distribution of
Around 90% of quarries
5 billion m3 natural stone
the companies
are located in the west
reserves and approximately
of Anatolia, mainly in
3.5 billion m3 of this reserve
the Aegean and Marmara Regions. The exists in the Aegean region. The natural
distributions of the companies which stone quarries are located especially in
have got marble licenses according to Balıkesir, Afyon, Denizli and Muğla provthe regions are shown in Figure 3. The inces (Table 6).
01 March 2013
%
Balıkesir
120,000
Table 4: Workable limestone and travertine reserves of Turkey
42
Reserves (million m3)
Afyon
9,000
2,720,000
Province
The Afyon place is known as one of the
most important natural stone production and processing centres in Turkey.
Afyon-Iscehisar’s natural stone originate
from limestone rocks that metamorphosed under heat and pressure. The
main mineral component of Afyon Iscehisar marble is calcite (more than 90%).
The sizes of calcite crystals are 0.2 - 0.5
mm, and between 1,000 and 1,700 crystals 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 natural stone and processing plants are located three areas, these areas are Iscehisar,
Susuz Boğazı, and the Afyon industrial
region. There are over 400 marble processing plants of different sizes operate
in Afyon and these companies are processing 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 simple machinery, like splitting machines
and 1/3 of the block marble production
of Turkey is made in Afyon-Iscehisar. According 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 processing plants are operating with at least
one marble gang saw or one S/T (disccutter). The plaque marble production
of Afyon-Iscehisar region consists of
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19% of the Turkish plaque marble production. 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.
Reserves
x1000m3
Region
Type
Tavas - Vakıfköy - Çamova Tepe
Marble
72,000
Kocabaş Villiage
Travertine
25,000
Kocabaş - Etence Tepe
Travertine
7,500
Kocatepe - Acadere Zeytinlieğrek
Travertine
10,000
Table 7: Marble quarries and reserves in Denizli
DENİZLİ
Denizli province is located in western of
the Turkey. Denizli is the second province 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 travertine quarries and 90 factories which
are located about 10 - 20 km away from
the Denizli. Travertines are main export
products for Denizli. Produced travertine has been used for cladding of sidewall and other internal and external usage in modern building, structures, water pools, other accessories for modern
civil constructions. Both their colors and
physical properties vary from location
to location in the study area. The Denizli has widespread travertine reserves
one of the famous one is PamukkaleKarahayıt 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 Sarayköy within the borders of Denizli province. 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.
44
01 March 2013
BALIKESİR
Balıkesir 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 number of quarries and plants which are operated by some companies in Balıkesir.
Marble quarries and reserves in Balıkesir
(Table 8).
Region
Product name
Reserves
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
Bigadiç-Çayüstü Village
Onyx Marble
EASTERN BLACK SEA REGION
The Eastern Black Sea region has rich
potential in terms of a variety of mines,
mainly metallic mines. The region has
approximately 435 million Tonnes natural 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 following Ordu, Rize and Trabzon province
(Table 10).
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
Table 10: Probable Reserves in Eastern Black Sea
300
7
Table 8: Marble quarries and reserves in Balıkesir
THE SOUTH EAST
UŞAK
Uşak 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.
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 9: Marble quarries and reserves in Uşak
DİYARBAKIR
Diyarbakır province is located in the
south east of the Turkey. Natural stone
of the Diyarbakır layers, which originate
from limestone, are geologically indicated by different colors, particle sizes and
mineral compositions. Diyarbakır limestone is becoming increasingly popular
for both interior and exterior building applications in the local area in south east
Turkey, being easy to cut and shape and
suitable for many purpose. Besides limestone 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 marble and 36% (30,390 m3) of their production is exported.
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NATURAL STONE VARIETIES IN
TURKEY
Turkey, due to its location in the AlpineHimalayan orogenic belt, has numerous
natural stone deposits. Turkish natural
stone industry has proved its consistency and continuity in the commercial arena 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 international market and are regularly demanded. The best marble reserves are located 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 ultrabasic rocks. It is found as tectonic breccia and located around Elazığ - Güleman
/ Altınoluk village. Red green pebbles
are attached with the same colored cement. Recommended usage of area can
be used in interior exterior plating, wall
cladding and decoration.
a) Elazığ Cherry
b ) Akşehir Black
polishing and the shaping and the cutting rate are all excellent. There isn’t any
risk of rusting. It can be utilized in interior, 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 provide 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 cladding, floor covering and decoration. The
travertine is suitable to be processed in
blocks and plates and offers good shapeability. 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.
c) Afyon White
d) Denizli Travertine
Figure 4: Elazığ cherry, Akşehir black, Afyon white and Denizli travertine
II) Akşehir Black Marble: This marble is
showing catalastic texture in general and
has white calcite veins and brown styoliths. 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 suitable 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 crystals texture and also contains occasional
yellow veins. Its suitability for making
blocks, plates, cutting sides and corners,
46
01 March 2013
REFERENCES
1- Ayhan, M,. Topal, E,. Akkoyun, Ö,. 2005.
Diyarbakır Mermer Sektörünün Türkiye
Mermer Endüstrisindeki Yeri ve Çözüm
Önerileri. Dicle University Mining Engineering Department.
2- Çapik, M., 2010, Natural Stone Production with Emphasize on Turkey. Technical
Project Work, Montanuniversitat Leoben,
Austria,
3- Çapik, M., Yılmaz A.O., Karaca, Z,. 2012.
An Overview on Natural Stone Producing 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. Geological and Technical Characterization of Iscehisar (Afyon -Turkey) Marble Deposits
and the Impact of Marble waste on environmental pollution. Journal of Environmental Management 87 pp, 106 - 116
5- 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 Sektöründeki Yeri. Türkiye IV. Mermer Sempozyumu (Mersem’2003) Bildiriler Kitabı
18-19 Aralık 2003 Afyon, pp 126 - 138.
7- Ozkul, M., Varol, B., Alçiçek, M. C,. 2002.
Depositional environments and petrography of Denizli travertines. Bulletin of
the Mineral Research and Exploration,
125, pp, 13-29.
8- RTME; 2012 Republic of Turkey – Ministry of Economy, Natural Stone Sector.
www.economy.gov.tr
9- Stone 2006 Stone Sector, The International 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_preview/3909.pdf CBI market survey: The
Natural Stone and Stone Products 13Market in the EU. 19/02/2010.
14- www.tummer.org.tr/
15- www.stonecontact.com/Main.aspx
?pid=ProductSearch&countryID=209/
2013
16- www.turkishstones.org/ts/2013
17- www.migem.gov.tr/2013
18- Uyanık, 2009 Natural Stone, İGEMEExport Promotion of Turkey
19- Yagız, S., 2006. Overview on geomechanical assessments of Denizli travertines in Turkey. The Geological Society
of London, pp 384-391.
CONTACTS
Mehmet Çapik
Karadeniz Teknik Üniversitesi, Müh. Fak, Maden
Müh. Böl., 61080, Trabzon - Turkey
Phone: +90 (462) 377 40 57
Fax: +90 (462) 377 35 33
Article
Minor, Critical and Strategic:
Antimony
INTRODUCTION
Antimony is a silvery, white, brittle, crystalline solid that exhibits poor conductivity 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 metals 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 temperatures 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-antimonides of metals like lead, copper and
silver. Primary antimony minerals can be
separated into three categories - sulfides,
oxides, and mixed sulfides-oxides as follows ;
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
More than 70% of antimony mine production is converted to antimony trioxide (some used as feed for metal and
other product output), which is used
48
01 March 2013
principally in flame retardant formulations for textiles, plastics and rubber, and
in catalysts for production of polyethylene 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 batteries. Other uses are in solders, ammunition, corrosion resistant pipes and cable
sheathing .
Glass 9 %
Batteries
19 %
Flame
Retardands
( for Plastics)
72 %
CONSUMPTION
Antimony consumptions by end uses
and main marked drivers are given in
the below table. This table shows us anti-
mony trioxide and antimony metal consumptions. 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 PRICES
According to the U.S. Geological Survey
China is by far the biggest antimony producer in the world and is likely to dominate the market for more than 100 years.
In 2011 China produced 150,000 metric
tons Sb equivalent antimony ore, by accounting for almost 90% of world total
production.
The important question here is how Chinese dominance is affecting the market?
It is obvious that changes in Chinese
government policy are the most important factor affecting the market especially prices. The Chinese government is
also trying to improve the environmen-
Compound Annual
Growth Rate (%)
2000
2010
Main Market Driver
70,000.0
103,500.0
4.0
Polymer Demand
6,000.0
11,400.0
6.6
PET Demand
Non metalllurgical
Flame Retardants
Plastic Catalyst
Heat Stabilizer
Glass
1,400.0
2,600.0
6.4
16,000.0
1,700.0
-20.1
PVC Demand
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
96,600.0
123,540.0
2.5
Sub Total
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
Total
Source : Roskill
51,000.0
76,000.0
4.1
147,600.0
199,540.0
3.1
World Mind Production 2011
World Mine Production (Sb Equivalent) tons
2010
2011
5,000.0
5,000.0
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
167,000.0
169,000.0
Bolivia
China
World Total (Rounded)
Tajikistan 1%
Other Countries 3%
was one of the top three critically high
risk elements.
Bolivia 3%
South Africa 2%
Risk List 2012
Russia
(Recoverable)
2%
China 89 %
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
$20,000.00
$15,000.00
$10,000.00
$5,000.00
$0.00
2000 2002
2004 2006
2008
2010 2012
Source: United States Antimony Corporation
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 problem 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 production will be added to global supply.
CONCERNS ON ANTIMONY
Chinese dominance in the market and
dependency on raw materials has been
creating serious concerns globally. Securing raw materials which are important 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 developing 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
Leading
Producer
Symbol
Rare Earth elements
REE
9.5
China
Tungsten
W
9.5
China
Antimony
Sb
9.0
China
Bismuth
Bi
9.0
China
Mo
8.6
China
Molybdenum
METAL PRICES BULLETIN AVERAGE ANNUAL METAL PRICE PER METRIC TON CIF USA
Relative
Supply
Risk index
Element
Source: British Geological Survey
Besides this most important concern on
antimony is exhaustion of reserves. According to the U.S. Geological Survey,
the Chinese Government continues to
shut down antimony mines and smelters in an effort to control environmental
issues and resolve safety problems. The
Local Government in Lengshuijan, Hunan Province, which accounts for about
60% of the world antimony supply, shuttered almost all of its mines and smelters. But the most important news is officials 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 DEVELOPMENTS
One of the biggest problem in today’s
world is energy, but because of the increasing concerns on nuclear energy
and fossil fuels, we are forced to find alternatives, for that reason the world tries
to develop renewable energies like solar, 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
01 March 2013
49
According to Migem data, Turkey increased its antimony ore production up
to 50,000 tons in 2008; it was the highest 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.
Antimony Ore Production By Years
YEARS
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 oversupply. 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 manufacturing 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 liquid metal at the bottom and molten salt
in between. Magnesium and antimony
are two perfect elements for them because the current passing between electrodes 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 shipping 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.
TURKEY
Turkey has roughly 200 known antimony mineralization’s. The majority of
these are in Western Anatolia; in Kütahya, 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 .
50
01 March 2013
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
Known antimony miners and producers
in Turkey are as follow;
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
•• Cengiz Holding: (www.cengiz.com.tr/
maden.asp) They are operating Ödemiş - İzmir antimony mine and they
had a flotation facility. It was formerly
Eti Mining property but was privatized. They have very low quantities of
production.
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% percent 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 resources, even known mineralization’s with limited 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.
•• Özdemir Antimony: (www.antimuan.
com/en/) Oldest antimony producer.
They are operating antimony mine
in Turhal - Tokat. They have flotation
plant, smelter and trioxide production facility. It is a subsidiary of one of
the Turkey’s biggest gold producer
Koza Gold.
•• Tri-Star
Resources:
(www.tristarresources.com) They are exploring 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
Balıkesir Susurluk - Demirparı
Balıkesir İvrindi - Korucu - Taşdibi
Grade (%Sb)
Measured
Indicated
Inferred
Total
1.16
-
-
11,250
11,250
235,600
283,450
6
47,850
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
biggest producer of the antimony. But
producing this type of “Critical Raw Material” 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 electricity 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 looking to stop our energy dependency.
REFERENCES
min.com/company.htm) A subsidiary
of AMG group. They have the biggest
antimony mine in Turkey, Mine covering 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 inZorkun - Hatay. They only have ore
production. But this mine is a new
discovery and wasn’t known before.
Company has 3 licenses covering roughly 60 km².
•• Zirve
Mining: (www.zirvemaden.
com.tr) they started to operate mine
as manganese mine but they discover 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.
them. But when we consider all of these
we are still not benefiting enough from
Turkey’s potential.
CONCLUSION
Antimony classified as “Minor Metal”, and
with current supply problems, and expected 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 application. We are talking about the giant
batteries and giant batteries need huge
amount of antimony.
•• Tempo
Even just by considering 3% annual increase in consumption without adding
new driven demands by new applications, world need 4 - 5,000 mt of additional 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 production, supply gap will be closed, especially
when the Chinese producers stop production because of exhaustion of their
resource.
There is also some other producers and
small miners that we couldn’t list here as
we don’t know too much details about
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
•• BS Investment Holding: (www.bsyatirim.com.tr/) They are producing antimony ore from their Niğde - Çamardı
antimony mine. It was historically
known old mine.
Teknik: (tempoteknik.com/
antimont.html) They have mining
operation, beneficiation, smelter and
trioxide production facilities in Kütahya - Tavşanlı.
1- Anderson, Gorby G, “The metallurgy of
antimony”, Chemie der Erde - Geochemistry, V. 72, Issue 4, P.3, July 2012
2- Bell Terrence, Metal Profile: Antimony,
www.about.com
3- www.myanmar-sb.com/aboutantimony.html
4- “Antimony: A Metal?”, www.HardAssetsInvestor.com
5- Antimony, Metal Bulletin Montly, May
Issue, p.44, 2007
6- www.usantimony.com/
7-Ancoa Ltd Study of the antimony
market, Roskill Consulting Group Ltd.,
17.10.2011
8- Annex V to the Report of the Ad-hoc
Working Group on defining critical
raw materials, European Commission,
30.07.2010
9- Mineral Commodity Summaries 2012,
U.S. Geological Survey, January 2012
10- www.miningfeeds.com
11- www.ted.com
12- TBMM (Turkish Parliement) Minute
Bulletin, Period:20, Volume:46, Year:3,
Page:52, 03.03.1998
13- Turkey State Planning Institute, 8th
Quinquennially Development Plan ,Mining Experts Commission Report, Metalic
Mines SubGroup, Other Metals, Antimony, Tungsten, Nickel, Vanadium, Molybdenum, Tin, Manganese WorkingGroup
Report, 2001, DPT:2629-ÖİK:640
CONTACTS
Sait Uysal
Mining Professional
Website: www.saituysal.com.tr
01 March 2013
51
Article
Historical Mining and Processing Centers
in the Van Province of
Eastern Anatolia: Rediscovered
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 parallel 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 prospects wait unnoticed in this ancient land.
The purpose of this article is to highlight
the re-discovery of some of these historical 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 Urartians 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 communities.
INTRODUCTION
In the last fifteen years, Turkey’s mining 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). According to a report issued by the office of the
prime minister (ISPAT, 2010), the combination of regulatory changes, incentives offered, and reduced bureaucratic
processes for obtaining mining licenses,
caused a steady increase in local and
52
01 March 2013
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. Mining 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 profitableprospects in these mining locations. Surprisingly, 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
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 prevented 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 substantial 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, today’s mining code is much more attractive for investors and operators. Beginning 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
12,000
10,172 10,511
10,000
8,000
6,000
4,000
2,000
8,105
11,480
9,216
6,214
5,166
3,613
2,587
1,916
1.5 1.4 1.5
1.2 1.4 1.2 1.2 1.4
1.1 1.1
12.00
10.00
8.00
6.00
4.00
2.00
0
0.00
2000 2002 2004 2006 2008 2010 2012 2014
Years
Figure 1: Mining Industry Revenues (Data from: MIGEM, 2012)
2007) until the discovery of the Zilan site
in 2007.
600
478
500
409
400
318
300
200
138
188
50
236
69
91
82
48
100
0
2004
2005
2006
2007
2008
2009
Figure 2: Number of companies with Foreign Capital in Mining (Undersecretariat of Treasury)
mining, metallurgy, archeology, and for
investment communities.
HISTORICAL MINES IN THE
PROVINCE OF VAN DESCRIPTIONS AND ANALYSES
Balaban, Bahçesaray, Zilan are three
important historical mining and processing centers in the eastern Anatolia
where once the ancient Urartian Kingdom 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 occasion, 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 intentionally 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 metallic 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 historical sites which appeared in the local
mining/geological literature (Şener et al.,
Figure 3: Locations of the historical mines (Balaban,
Bahçesaray and Zilan)
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 excavated vertically to each other. The ore
consists of hematite and specularite. The
ore is melted at the closest stream valley 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. Rectangular-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 longer as originals. They are man-made
01 March 2013
53
a) Balaban (Photo: Y.Ates)
b) Evidence Processing (Photo: S. Şener)
Figure 4. a) Balaban Site, b) Evidence Processing
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.
Bahçesaray
The ancient mining remnants in Bahçesaray include a single horizontal tunnel (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 operations’ are visible today. The main ore
is sphalerite. Limonite, hematite, and pyrite, 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 required fuel source. The main gang minerals are calcite and quartz. This mining
operation must have had significant importance for Rusahinili (Toprakkale) and
Sardurihinili (Çavuştepe) Urartian kingdoms (Belli, 1991).
Zilan
The 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). Accoordingly, there is a paved highway connecting 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 (“Zernaki 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 Sassanid dynasty.
In 2007 during a trip to the valley a former mining area was discovered by
chance. The mining complex is accessed
by leaving the paved highway and turning 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 facilities are located on both sides of this
small valley.
Mining and processing evidence at the site
Figure 5: Tunnel entrance at Bahçesaray (Photo: S. Şener)
54
01 March 2013
The specific mining and processing descriptions 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 dimension at about 2m-depth. One of the rectangular shafts, sunk from a steep rock
slope to follow a near vertical ore vein,
gently spirals down with its bottom invisible. Its total depth could not be determined 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 creekline 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; respectively. Chemical analyses are done
using Inducted Coupled Plasma Optical 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 diffractometer (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 rejects. 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 barite (BaSO4, 14.9%), a mineral of barium.
Thus, it is concluded that the Zilan Valley Mining and Processing Complex
cant mines operated by Urartians in the
region (Belli, 1992). However, the discovery of the Zilan site in 2007 demonstrates
the high potential for other equally important historic mines in the region.
Modern exploration techniques of today 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 communities involved.
CONCLUSIONS
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 Anatolia
Although 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 current mining environment.
DISCUSSION
The mining activities in the province of
Van in Eastern Anatolia are very minimal 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 including 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 carried out around the Lake Van by Urartians. Until recently, Balaban-Pürneşe
and Bahçesaray iron mines in the Van
area were known to be the most signifi-
The current mining environment in Turkey 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 taking 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 untouched ancient mining regions in the
country that once were the cause of the
glory for some civilizations such as Urartians. Three of these sites are described
in this study. The ores in these known
locations are close to surface, easily accessible, and have high ore grade. Therefore 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 potential for other discoveries in the region
remains high.
REFERENCES
1- Akcil, A. (2006) Mining History in Anatolia-PART 1, CIM Magazine 1 (1), 90-92.
2- Akça, E., Arocena, J., Kılıç, S., Dingil,
M., Kapur S. (2010). Preliminary chemical and micromorphological observations 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. Mediterranean Archaeology & Archaeometry,
Vol. 12, No. 2, pp. 105-115.
4- Belli, O. (1991) Ore deposits and mining in Eastern Anatolia in the Urartian pe-
riod: silver, copper and iron”, In Urartu, A
Metalworking center in the first millenium 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 country 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 Directorate 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 Engineers’ publication, Ankara, XXX p.
12- Muscarella, O.W. (2006) Urartian metal artifacts: an archaeological review. Ancient Civilizations vol. 12 no 1-2, 147-177.
13- ISPAT, 2010. Turkish Mining Industry
Report. Investment Support and Promotion 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) Example, 60th Turkish Geological Congress,
16-22 April Ankara, p.163-165.
15- Sevin, 1988. The oldest highway: between the regions of Van and Elazığ in
eastern Anatolia. Antiquity, Vol. 62, No.:
236, pp. 547–551.
CONTACTS
Yusuf Ateş
Department of Civil Works, Süleyman Demirel
University, Isparta, 32260 - Turkey
[email protected]
01 March 2013
55
Article
The Power of Plants
for Gold Prospecting
Over 100 years ago a short paper entitled
‘The lixiviation of gold deposits by vegetation’ 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 assist 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 (Equisetum) from Czechoslovakia. Such concentrations would make the horsetails mineable 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 removing 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 subsequent researchers and prospectors, and
over the past 40 years the significant advances in analytical chemistry have resulted in a greatly enhanced database on the
gold content of vegetation.
be at the interface between the root system and the soil, or between different tissues comprising the plant. For example, in
black spruce (Picea mariana) uranium concentrates 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 witnessed 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 microcosm in their immediate vicinity. The highly 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.
FACTORS TO BE CONSIDERED
WHEN USING PLANTS FOR GOLD
EXPLORATION
The Siberian exploration biogeochemist
Alexander Kovalevskii conducted exhaustive 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
56
01 March 2013
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
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 according to growth requirements. The ‘tolerated’ elements are mostly translocated
to plant extremities where they are sequestered 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 outer 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 ‘acropetal’ 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 complexes, 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 compounds they provide an excellent pathway for the transfer of gold into plant
structures. Some plants of the genus
Prunus and others of the rose family contain 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
some that are unknown in the geological 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 organic 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 components have been dissolved and transferred 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
ROCKS
Intuitively, 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 somewhat larger bag of plant tissue. However,
there arise some fundamental questions:
•• which soil horizon should be collec-
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.
The analysis of rock samples for gold
cannot be expected to give a good correlation 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-
ted?
•• which size fraction of the soil should
Douglas-fir Bark
(n=12)
be analysed?
•• which type of tree tissue (and from
••
a
and the gold content of the soil (Table
1). The conclusion is that in this environment 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.
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 comparison be made, since there are seasonal variations in plant chemistry?
Typically, each soil horizon has a different
gold content, as does each size fraction
of that soil. Similarly, each vegetation tissue type has a different ability to collect
and store gold, and concentrations in living 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 sample 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)
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 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 horizons) 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.
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
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.
01 March 2013
57
tain several grains of gold (perhaps sufficient 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 lithogeochemical signature obtained from
a few hand specimens (Table 2 - on the
previous page).
COLLECTION OF PLANT TISSUES
Each species of plant has a different requirement for, and tolerance to, the full
periodic table of chemical elements. Although 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 orientation 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 accumulate metals), and provide an opportunity 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 establish levels present in areas remote from
mineralization. However, if time and/or
logistical constraints preclude this phase,
then sample selection must rely on published information.
Within the northern (boreal) forests of the
world the conifers predominate. Some
species of conifer (e.g. Pinus brutia – Turkish pine) occur quite commonly throughout southern and western Turkey. Conifers
have been evolving for some 350 million years, during which time they have
become sophisticated in their selection
of and tolerance to metals and other elements. They can withstand great extremes
of both physical and chemical environments. 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 inner bark and trunk wood.
Twigs, especially the most recent several
58
01 March 2013
years’ growth, also concentrate gold, along
with some commonly associated ‘pathfinder’ elements such as arsenic and antimony. Each sample of twigs should consist
of a similar number of years of growth, because 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 diameter 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 biogeochemical samples for gold surveys is
to use a helicopter (Fig. 3). This is especially appropriate in remote, rugged and
heavily forested terrain. In northern continental 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 RESULTS
At 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 operations 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 concentrations 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 – virtually a mineable plant if sufficient biomass
could be cultivated.
In the arid to semi-arid regions of the western United States big sagebrush (Artemisia
tridentata Nutt.) has been used in the exploration 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 disseminated 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 exploration for gold, and recently the tough spinifex grass shrubs, with very deep root systems, 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 possibility of some airborne contamination cannot be entirely ruled out. However, there
are many anomalously high concentrations 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.
Gold (ppb) in
Outer Bark
from Black
Spruce
Overburden
Thickness
Drill Results
In ash
Dry
weight
230
3.7
1m
Near main trench.
120
2.4
1m
Erratic mineralization:
1 m of 0.85 oz/t (29
ppm) Au at depth of
50 m.
690
14
2.5 m
Subcropping mineralization: 0.11 oz/t (3.8
ppm) Au over 60 cm.
450
11.3
1m
Well mineralized
shear zone: 0.3 to 0.7
oz/t (10-24 ppm) Au
over 4 m.
200
3.5
3m
Mineralization, 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.
dium to detect iron and zinc at the chromite deposits near Mersin. Also, an orientation survey by M. Akçay et al. around
the Kanköy Deposit near Trabzon using
Corylus avellana (hazelnut tree) and Rhododendron luteum concluded that these
species could be useful biogeochemical
media in the exploration for massive sulphide deposits.
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 mineralization. More emphasis needs to be
placed on the multi-element distribution
patterns.
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 requires plants that are sufficiently densely
distributed over a survey area to be available for collection at each (or most) of
the planned sample stations. In addition
to those species already studied, a common genus in Turkey that would seem
worth investigating is Astragalus (poison
vetch).
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 extraordinarily sophisticated in their abilities to
select those elements that they need for
their metabolic function, while developing ingenious methods to exclude other
elements or tolerate their presence by
sequestering them in tissues (commonly
their extremities) out of harm’s way. Judicious evaluation of biogeochemical
data, along with all other geological and
geophysical information available to the
exploration geologist can assist in the selection of drill targets, and ultimately the
discovery of gold.
FUTURE DIRECTIONS
the La Ronge gold belt of northern Saskatchewan in Canada there are numerous 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 wooded with black spruce (Picea mariana).
Whereas the exploration geologist had interpreted the direction of this vein, he had
no simple way of determining where that it
was gold bearing, because its projected extension 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 developed 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-
Gold mineralization is one of the most
difficult commodities to find using biogeochemical methods, because of the
very low concentrations present in plant
tissues (usually <1 ppb Au) and the generally poor precision of commerciallyavailable analytical methods at these
low levels. However, the application of
biogeochemical methods to the exploration for gold has now been developing
for over 100 years with increasing refinements. There have been numerous problems to investigate, not least of which has
been the need for cost-effective methods to chemically analyze plant material. 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 (ICPMS) has been developed to provide data
for gold and approximately 60 other elements 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
SUGGESTED READING
1- Brooks, R.R., (Editor) 1992. Noble Metals 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 Mineral Exploration and Processing. Ellis
Horwood (Division of Simon and Schuster), Hemel Hempstead (UK), Toronto,
New York, 538 pp.
3- Dunn, C.E., 2007. Biogeochemistry in
Mineral Exploration, (Handbook of Exploration and Environmental Geochemistry 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
CONTACTS
Colin E. Dunn
PhD, P.Geo, Consulting Geochemist
Address: Colin Dunn Consulting Inc.
British Columbia - Canada
01 March 2013
59
Article
Strategic Planning & Vision -
the Key to Sustainability in Mining
The challenge that faces resource companies 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 nature of the identified mineral or metal
resource, to drive design of the optimal
technical solution to mining and processing activity within the mining value
chain. For most junior companies this
is enough, however developing and resourcing a strategic portfolio of projects
that is designed to create flexibility to
short and long term business environment shifts, i.e. a portfolio mix that allows 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.
quire assets to generate value and attract 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, environmental, infrastructural) that may change
over time according to social and political evolution. This is the spatial context
that encompasses location and associated operating environment.
The selection of a mineral asset portfolio 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 technology 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
For a resource development and mining 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 Imperative’;
•• Build and operate assets within an
anticipated long term business environment and maintain flexibility of
short term tactical response to short
term shifts in the business environment.
STRATEGIC LONG TERM PLANNING
Resource exploitation companies re-
60
01 March 2013
Figure 1: Strategic long term planning - complexity and options relative to nature of operations
under these circumstances increases
with movement from a single commodity, single operation in one country
business through to a multi-commodity,
multi-operation, multinational enterprise as represented schematically in
Figure 1.
The combination of the spatial context,
economic, market, and technical variables can be defined in a range of possible strategic scenarios or global views in
which the value from the mineral asset(s)
could be realized. The global view attempts to capture the interdependence
and uncertainty associated with key elements of the spatial and business contexts across the long lead times associated with financial returns from mining
activities.
Strategic long term planning of mineral
and metal companies must therefore incorporate elements of:
Optimization of the mineral asset portfolio 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 anticipated changes in the near and longterm business operating environment.
This results in a near term tactical response (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.
Figure 2: Schematic representation of the relationship of key strategic long term planning elements
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 within legislative and mandated strategic
constraints. The nature of these components, and their inter-relationship in the
strategic long term planning process, is
schematically represented in Figure 2.
The global and national business environments, 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 assumptions 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 between mineral asset portfolio utilization
and the market.
The annual cyclical business planning
process is conducted utilizing the planning parameters (global assumptions)
associated with the preferred or most
likely global view. The physical characteristics of the individual mineral assets
within the portfolio determine the
01 March 2013
61
development of a mine extraction strategy, the mining right plan, the budget,
and long term plan per asset and collectively for a multi-asset business.
The business plan then forms the basis 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 sustainable development, all of which take
place in an annual planning cycle. The
composition of the mineral asset portfolio is then reviewed and optimized relative to the most likely scenario, the current state of execution of projects, and
company strategic intent.
The business plan, which is the core output 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 alternate trajectories are evaluated and a
contingency plan is developed, based on
planning parameters associated with the
alternate scenario.
THE OPERATING CONTEXT
The global and national business environments, in conjunction with the characteristics 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 resource
The mineral resource is the primary asset
underlying value creation through the
mining, recovery, and sale of metals or
minerals.
Characteristics of the metals/minerals market
Understanding of the market and participants informs value based decisions and
influences strategic actions. Understanding 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
62
01 March 2013
the business plan.
The industry value chain
The 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 environment
The global business environment can be
defined as the global environment that
influences local decisionmaking on resource use and capabilities. This includes
the social, political, economic, regulatory, tax, cultural, legal, and technological 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 environment will have an effect on the nature of demand and resultant selection
of orebodies for mining.
National business environment
Similar to the global business environment, the national business environment
considers the social, political, economic,
regulatory, tax, cultural, legal, and technological 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 activities. Acquisition and effective exploitation 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. Understanding 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
PARAMETERS
The reality of the business environment
is that it is increasingly complex and dynamic. 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 component of strategic long term planning.
Analysing key global trends and seeking to influence the possible business
future(s) requires a widening of perspective to a range of possibilities.
In the strategic evaluation of mineral
asset exploitation options, a view must
be taken of possible future(s) and associated parameters that will influence
investment decisions. This view, which
is encapsulated in a set of common long
term planning parameters (the global assumptions), can and does change in line
with macroeconomic drivers.
The complexity of long term planning
parameters (typically forecasts of exchange rates, inflation rates, metal prices, cost escalations, capital escalations,
working capital, etc.) and the relationships 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 planning.
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 parameters (global assumptions) that represent the relevant underlying assumptions 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 planning parameters are:
•• 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 portfolio; 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 inherent in the external and future environments, 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
COMPRISE
Determination 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. demographics; innovation, science and technology; 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, society issues such as the social licence to
operate, government issues, environmental issues, technology and alternative applications, capital and operating
cost escalators, competitor actions, etc.,
aimed at highlighting key drivers, key
questions, and setting the context.
Developing scenario themes and storylines, writing up the synthesis and
scenarios and reviewing the outputs.
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01 March 2013
Typically, outputs are visually presented
relative to two orthogonal axes representing primary drivers of change e.g.
global economic activity and metal/mineral dependency, with descriptors of the
global views in each quadrant.
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.
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 approach is rational movement towards an
identified and agreed global view (previously introduced through the scenario
development process), rather than an
ad-hoc crisis-driven response. The organization knows what trajectory to follow
as the contingency positions have been
previously defined.
The global assumptions are a set of long
term planning and economic parameters that best encapsulate the external
drivers of value associated with a scenario or global view to be applied in business planning. The aggregated parameters 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 uniformity of assumptions, as they are the
only economic planning parameters
permitted to be applied across the organization for planning and valuation purposes. This facilitates comparison and
ranking of options.
LONG TERM PLANNING PARAMETERS (GLOBAL ASSUMPTIONS)
Cash flow estimates used in discounted
cash flow analyses are fundamentally
derived from estimates of revenue, operating cost, and capital cost. Extensive effort 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 accuracy to drive the revenue line. However,
an area that is often not subject to the
same rigour is the impact on plan viability of assumptions regarding metal
(commodity) prices, exchange rates, inflation rates (domestic and foreign), and
escalation factors (capital expenditure
and operating expenditure).
On the assumption that these global
parameters are usually rigorously determined for a five-year period and then
maintained at long term trend estimates,
the adoption of an optimistic or pessimistic long term perspective can have a
significant effect on projects with 15–30
year life spans. The risk of not undertaking viable projects because of a pessimistic long term view, or conversely
undertaking marginal projects because
of an optimistic long term view, is miti-
THE PLANNING AND DECISION
MAKING PROCESS - BUSINESS
PLANNING
The annual cyclical business planning
process is executed using the planning
parameters or global assumptions associated 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 physical characteristics of the individual mineral assets within the portfolio determine the development of a mine extraction 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 multiasset organization.
The business plan, which is the core output of the strategic long term planning
process, is then reassessed for a possible
shift to the next most likely global view
an annual rhythm to activities, so that
all parties are aware, through the ‘five
Ps’ of the planning process (philosophy,
programme, process, product, and people) of what must be done, by whom,
by when, and to what standard to meet
the company’s planning needs. Alignment 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 PLANNING
Figure 3: Business planning – key elements and interrelationship
which then forms the basis 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 sustainable development.
All of these activities take place in an annual planning cycle and are not necessarily 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 DEFINITION
Overall 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 strategic 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 approach, the company strategy directs
the objectives of value-based management and defines prioritization logic in
the long term planning process, i.e. the
overall mineral asset portfolio optimization process is directed by the company’s
strategic intent.
LONG TERM PLANNING PROCESS
AND PROCEDURES
The overall objectives of the long term
planning process are to create alignment of activities to a common company
planning calendar; to ensure utilization
of common logic and tools that allow
comparison between operations and options; and to generate a common business plan that drives execution of the
company strategy. The business planning activity creates a central process
around which the business organizes
planning activities to meet the needs of
the Executive and the Board. It creates
Contingency planning identifies a controlled trajectory toward reduced or
increased output relative to that originally planned in the long term plan and
the business plan. Generation of contingency 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 sensitization. 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 assumptions.
Contingency plan actions are a sequence
of logical steps to move toward a lower
future output profile from both current 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’ actions:
•• The market price for the product at
••
••
which each investment centre becomes 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 requires input from multiple parties
01 March 2013
65
Figure 4: Alignment of operating and support activities to the value chain
including the operations, projects, processing, and planning. Annually a contingency plan is developed as part of the
long term planning process.
EXECUTION PLANS FOR
SUPPORTING CAPABILITY
The ability of a mining company to effectively execute an integrated business
plan is dependent on alignment of activities 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 activities across functional groupings and
along the company value chain. This is
facilitated by the integrated process and
dependencies created between the business plan and resourcing of the various
support functions.
The business execution activities of an
integrated minerals and metals company can be broadly sub-dividedalong the
value chain into two groupings - operating and support. The operating activities
are mining and process, underpinned
by project and engineering execution.
These core operating activities are in
66
01 March 2013
turn provided support services by the
functions of human resources, operational engineering, marketing, finance,
and corporate affairs. This is schematically represented in Figure 4.
Process: Alignment of the process
value chain activity is primarily capacitydriven. Consideration is given to installed
capacity for each of the key process elements such as concentrators, smelters,
and refineries. Based on this type of data,
opportunities for scale and timing optimization are explored to ensure timing
and capital efficiency.
Projects: The project portfolio for the
company is defined by the project content of the business plan. Each mineral
asset has, by virtue of its long term plan,
a sequence of projects that require execution, on a timeline, to deliver on the
plan. The aggregated project requirements across the company provide the
projects portfolio.
Engineering and infrastructure: Engineering activities are focused primarily 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 sustainable development. The strategic long
term plan provides the basis on which
social and labour plans and environmental management programmes are structured 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 business strategic intent, and the alignment
of sales contracts, by metal, based on the
business plan thatarises from the SLTP.
Finance: Outside of the routine management accounting and corporate finance functions, finance activities are
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 generate pro forma annual financial statements 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 balance sheet management.
CONCLUSION
Strategic long term planning of mineral
resource extraction is an approach that
acknowledges the nature of the depleting mineral asset base, the importance
of a defined but flexible project pipeline,
variability in market conditions and the
requirements of the operating legislative 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.
REFERENCES
1- Bradfield, R., Wright, G., Burt, G.,
Cairns, G., and Van Der Heijden, K. 2005.
The origins and evolution of scenario
techniques in long range business
planning, 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 Geomechanics, Perth, Australia, 8 - 10 March 2006.
Section 8, pp. 1 - 13.
4- Porter, M.E. 1980. Competitive Strategy: Techniques for Analysing Industries
and Competitors. Free Press, New York.
5- Porter, M.E. 1985. Competitive Advantage - Creating and Sustaining Superior
Performance. Free Press, New York.
6- Smith, G.L. 2011. A conceptual framework for the strategic long term planning
of platinum mining operations in the
South African context. PhD thesis, University of the Witwatersrand, Johannesburg, South Africa.
7- Smith, G.L., Surujhlal, S.N., and Manyuchi, K.T. 2008, Strategic mine planningcommunicating uncertainty with scenarios. Proceedings of the Third International 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.
CONTACTS
Alan Clegg
Chairman, Afrasia Mining & Energy Consulting AS
Head 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
M a g a z i n e
“The Brand of Turkish Mining”
www.madencilik-turkiye.com
Article
In the Shadow of
Die-Hard Legal Concepts
Mining history in Turkey spans over centuries, if not millennia. Despite the meandering 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 (liberal 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 second 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 nationalization, but also to break free with
some of the conceptual features of the
Mining Law (No. 6309) of 1954. The Mining 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 heading of “Exploration and Operation of Natural Wealth and Resources”, the Article 168
also has a few salient hallmarks that are
distinct from that of the 1961 Constitution (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 legislating, take into account what is best-suited
for the modern mining practices in these
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01 March 2013
challenging times.
INTERPLAY BETWEEN CIVIL
CODE AND MINING LAW
In general, minerals remain the property 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 question for financial investors is whether insitu 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 movable property – immovable property.
This sort of (distinct) categorization, visà-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 included 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 unequivocally, identified mines as an immovable.
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.
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 separated 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-
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 nonetheless 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 particular Article is placed, is quite telling:
“Description of the Income from Immovable 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 include the income gained by successive
transactions carried out by lease-holders and sub-lessors.
2) Corporate Tax Law (No. 5520):
By reference of the Article 3, Para. 4, the
Corporate Tax Law uses the same definitions of income and revenue as provided
in the Income Tax Law. It is only natural 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 understandably, 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 Immovable Assets”, the Article 6, Para. 2 of this
treaty prescribes what “immovable asset” 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 approach, yet a different wording].
4) Law regarding Prevention of Unlawful Interference in the Possession of Immovable Property (No.
3091):
The Turkish Constitution, in its Article 35,
enshrines the principle of private property. The protection provided to this end
comes at a two-layered legal mechanism:
judicial and administrative. In addition to
the protection provided by judicial authorities as per a wide range of laws, the
Law No. 3091 provides an administrative
protection of private immovable property from unlawful interferences. It could
be likened to the common law concept
of “trespass to the land”. However, the primary concern of this Law is not the ownership, but the lawful possession instead.
That means one, who is in the lawful
possession of an immovable property,
can rely on administrative protection irrespective of whether one actually owns
it or not. Administrative protection refers
to the direct involvement of governor-
Anatolian Mines Map from 1890’s
ates by investigating the complaint that
is lodged. In case the investigation by the
governorate finds that there is an unlawful interference, the law enforcement
officers will ensure that the unlawful interference ceases and does not carry on.
The Law No. 3091 entails criminal liabilities too.
Article 1 of the Law stipulates that unlawful 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 ambit of the Law. Here comes the question
of if the mine licence-holders can be
regarded as the possessors of a res nullius or an immovable property, therefore
enjoy the same protection afforded to
the aforesaid. If the answer is in the affirmative, then one can perhaps safely
assume that this protection could even
be extended towards the lease-holder
(rödovansçı). Following this line of argument, both the license-holder and leaseholder could enjoy the status of “being in
the possession of an immovable”, thus rely
on the protection afforded by the Law
No. 3091.
01 March 2013
69
5) Code of Obligations (No. 6098):
The Code of Obligations is modelled on
Swiss Code of Obligations (OR, Obligationenrecht), and envisages three major
types for lease contracts: regular lease
(lease of movables; taşınır kirası), lease of
immovable (taşınmaz kirası), usufructuary lease (ürün kirası). Regular lease also
functions as general provisions that are
applicable to all types of lease unless regulated 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 usufructuary lease back to the “general provisions regarding the lease agreement” since
there appears to be no guidance provided 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 regular lease or a lease of immovable. This
leads us back to the start: the good old
discussion of whether a mine is a movable or immovable [Nota Bene: Court of
Cassation is of the opinion that the provisions regarding the lease of immovable
are not in any way applicable to royalty
(mining lease) agreements.].
CONCLUDING REMARKS
Classical 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,
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01 March 2013
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.
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 personal 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 destiny from that of the land. This detachment occurs on a different level, where
“the right of usufruct” as a property right
limited in time and scope being sort of elevated into a full-fledged right: “the mining 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 classical 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 general in line with the international practise. 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 somewhere else, meaning that a comparative
approach is a must to ensure not only
legislative change, but best (mining)
practise as well.
CONTACTS
Av. Cemâl Dursun
Partner at Dursun Özfırat Attorneys at Law.
Article
The Procurement Trio:
Improvement of Procurement by Strategic Sourcing, Supplier
Relationship Management and P2P (Procure-to-Pay) Process Design
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 higher 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 exceeded, London Metal Exchange (LME)
prices. Unless mining companies improve 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 negotiation skills are not the only tool to obtain
significant savings and maximize value
gained from relationships with suppliers.
cess of supply chain management and
company’s operations. Strategic sourcing provides wide range of tools (Figure 2), tactics and approaches in order
to provide an advantageous position
against suppliers during purchasing activities.
Figure 1: Deloitte’s Procurement Trio
and market characteristics. The purchasing department’s responsibility became
more important as their duties expanded 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 demand is very fluctuant, profit margins are
lower and cost pressure is high, money
spent for procurement becomes center
of attention. Hence choosing correct approaches and applying strategic sourcing are becoming cornerstones for suc-
In order to apply the right strategy to
each item / category purchased, companies need to understand their spend
structure and characteristics not only
from item / category standpoint but
Internal Customer
Suppliers
Item / Category
Figure 3: Spend Analysis 3-D Approach
EFFECTIVE SOURCING
REQUIRES THE CORRECT SET
OF STRATEGIES RATHER THAN
ONLY NEGOTIATION SKILLS
First step to achieve success in procurement is to comprehend the fact that
there are sets of strategies to pursue
before initiating negotiations with suppliers in order achieve best results and
maximum savings. Mining companies
procure a wide range of products and
services with very different supply chain
Figure 2: Deloitte Value Creation Framework for Strategic Sourcing
72
01 March 2013
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 / categories are crucial for the company and
what the total volume purchased. Supplier based analysis provides an overview of the total company wide business
volume with providers. And analyzing
spent from internal customer perspective helps understanding their needs, expectations 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 procurement department had multiple suppliers with equal quality and service level
to choose or just only one supplier in the
market who can provide items / categories (Such big mining machinery vs. company 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 characteristics of supply market and company’s
position against suppliers.
After spend and market analysis is completed, company will achieve a complete
comprehension of item / category’s importance for the company. Usually items
/ categories are classified as strategic, leverage, commodity and bottleneck (Figure 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 position the item / category.
Figure 5: Category Positioning Matrix
However strategic sourcing initiatives
need to be accompanied with crossfunctional collaboration. Best in class
organizations involve internal “customers” such as finance and accounting,
engineering, operations, maintenance,
safety/health/environment, and quality
assurance, which will contribute to the
initiative’s success. This approach ensures not only the availability of the supplies 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 MANAGEMENT
Another step towards excellence in
procurement is Supplier Relationship
Management (SRM). In practice, SRM
includes strategic planning and managing all interactions with goods and/
or service providers to develop closer and
more collaborative relationships with suppliers in order to maximize benefits mutually. It is the systematic, enterprise-wide
Figure 6: Supplier Segment Examples
Figure 4: Porter’s Five Forces
01 March 2013
73
assessment of suppliers’ assets and capabilities with respect to overall business
strategy, determination of what activities to engage in with different suppliers,
and planning and execution of all interactions with them.
Correct segmentation (Figure 6) of suppliers depends on correct assessment
of the current business relationship
(business volume, current supplier performance, 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 segmentation needs to be very sound and
accepted company-wide.
Create
Purchase Request
Apporove RP & Create
Purchase Order
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 communication for their strategic suppliers whereas,
for transactional suppliers purchase order initiated relationships with little or
no system integration. Moreover, segmentation of suppliers provides also
guidelines for performance management. Therefore SRM is crucial for companies to manage current relationship
74
01 March 2013
Pay Suppliers
Figure 8: High Level Procure-2-Pay Processes
with suppliers and define the future estate of their relationships.
to contracts and agreements with suppliers.
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 capabilities of providing standardized tools
and templates (common SRM tools and
templates), enabling supplier relationship data management (single source of
data), and enabling relationship visibility
(access to consistent reports facilitates
executive and management reviews).
Restructuring process can be accomplished by two-step approach. First step,
understating of current sub-processes
(purchase order creation, managing receipts 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 technological improvement is required. After understanding 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.
COMPLEXITY IN PROCURE TO
PAY PROCESSES DECREASES
VISIBILITY, CONTROL AND
EFFICIENCY OF CONTRACT
MANAGEMENT
Figure 7: Deloitte’s Supplier Segmentation Matrix
Receive Goods
Third cornerstone of Procurement Trio
is the restructuring Procure to Pay processes (Figure 8). Companies should understand the fact that procurement does
not end at creation and sending purchase order to suppliers. Restructuring
Procure to Pay processes means optimizing the processes related with purchasing 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 introducing control and efficiency as well as reducing risk and clearly defining roles and
responsibilities of each task. The key objective is to ensure that sourcing savings
are delivered by providing purchasing
processes in compliance to contract. By
restructuring processes, mining companies become capable of managing costs
of operations and administration, cutting length of cycle from sourcing and
order to application of payment, gaining
insight into vendor relationships and negotiate optimal payment terms, support
internal controls and ensure compliance
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 order to accomplish excellence in procurement and exploit full benefits, companies should pursue all three aspects of
Procurement Trio.
CONTACTS
Alper Günaydın
Manager, Deloitte Consulting
www.icpc2013.com
XVII.
INTERNATIONAL
COAL
PREPARATION
CONGRESS
&EXHIBITION
ISTANBUL
1-6 OCTOBER 2013
GRAND CEVAHİR HOTEL
pg r u p
Article
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 Decision, the government made substantial
revisions to the Mining Law and enacted
an amendment on 24 June 2010 (the
“Amendment”).
DIFFICULTIES IN OBTAINING
PERMITS
To clarify the vague provision of the Mining Law, the Amendment provided that
operation permits shall be issued within
three years after obtaining the surface
rights and necessary environmental permits. The Amendment, on the other hand,
provided only one year for operation licenses 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 license holders) limitations posed a severe 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 authorities and their bureaucracy. Approximately 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 period 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 DIFFICULT
On 16 June 2012, the Prime Ministry issued 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 refrained 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 approval. Pending the approval of the
Prime Ministry, issuance of forestry permits, 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 Ministry has also been criticized for not having
a special office with the technical knowledge required for the review of such applications.
Due to the fact that no threshold is being applied for such additional approval
procedure, even forestry permits pertaining to very small areas of land, such
as drilling holes, are made subject to the
lengthy approval procedure. Such bureaucratic complication and ambiguity
is unfortunately expected to discourage
foreign investment in infrastructure projects in Turkey.
FINANCIAL CAPABILITY
The Amendment brought a new concept: the “financial capability”. Exploration license applicants must certify that
they have financial capability equal to
the amounts determined by the Mining Department which are considerably
high amounts. Such capacity must be
evidenced by the value of the compa-
76
01 March 2013
a considerable amount then it should be
considered a by-product and should not
be subject to a separate operation permit.
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.
ucts. Accordingly, it is important to answer the following questions in order to
define an unpermitted mine production:
What is production?
What is a by-product?
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 discouraging effect on investors.
The Mining Legislation does not clearly
define “production”. Based on interpretation of the mining legislation and the
established practice of the Mining Department, production means extraction
of the mineral from soil where the operation license holder gains commercial
benefit from the extracted mineral.
UNPERMITTED PRODUCTION
The volume of the secondary mineral is
important in defining “by-product”. If the
secondary mineral to be produced is not
The Amendment has extended the penalties applicable to unpermitted mine
production and transportation. In addition to the imposition of an administrative fine, the license security of such
license holder committing the unpermitted 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-
The determination of whether the license holder gains a commercial benefit
from the extracted mineral or whether
the amount of secondary mineral is considerable is at the discretion of the Mining Department. In practice, it has been
observed that the Mining Department
applies a very wide scope to “unpermitted production” so as to include by-products as well. Thus, an amendment needs
to be made to clarify the definition of
unpermitted production for the purposes of avoiding the application of unjust
sanctions.
CONCLUSION
This 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 amendments. In order to meet the investors’ expectation 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 amendment.
CONTACTS
Şebnem Önder1, Ayşe Eda Biçer2
Çakmak Avukatlık Bürosu
Attorneys at Law
Address: 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 80
Fax: +90 (312) 442 46 90
Website: cakmak.av.tr
01 March 2013
77
Article
Business
Intelligence In Mining
In the last decade, the contemporary
international mining industry has undergone 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 business intelligence technology throughout mines in North America. From these
experiences, it is clear that the most
challenging forms of technological innovation 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 implementing 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 workplace.
The past decade has seen technology
vendors either developing, or consolidating to offer a full suite of informationbased 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 company, or other technology experts, to
provide advice on what specific product
to buy. The truth is, within the same category, 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
78
01 March 2013
by the vendors themselves. Any vendor
claims that complex business intelligence technology is easy to implement
and used to its fullest extent are false.
Mining has seen the successful introduction of technology directly related to
economies of scale, namely larger equipment, but as the economies of scale are
reaching their limit, the next cycle of
mining innovation will be business intelligence.
I will use ‘business intelligence technology’ 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 technology 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 section-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 generate performance information, such as
the productivity of the operator, delays,
or equipment health information. Making full use of such data requires much
more effort. Furthermore, integrating
the databases from these technologies
is difficult since mines typically use technologies 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 warehouse 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 manner 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 warehouse could contain data from several
databases, all related to a particular machine. 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 warehouse over traditional (relational) database technology are its ability to process
substantial data in less time, collect data
from multiple sources, facilitate understanding from users, and track processes
temporally (track changes over time).
Data mining is the process of using statistical 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 effective use of such data include education
regarding IT and systems engineering,
business process redesign, and information management. All fields not part of a
mining engineer or manager’s education.
It is for this reason, I have contacted
professional mining engineering societies and key publications throughout
the globe, offering to create a forum to
share case studies, advice from a wide
variety of experts, and showcase examples 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 mining, and would like help industry avoid
common missteps, such as thinking that
to gain the benefits of such technology; 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 formal technical talks. As Turkey’s mining
industry continues to consider purchasing the information-based technologies
developed in North America or Australia,
it is increasingly more important to communicate potential pitfalls so that they
can be avoided, in the native language.
Furthermore, due to time constraints, it
is increasingly more challenging for senior mine or corporate managers to participate 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 communication.
CONTACTS
Sean Dessureault1, M. Mustafa Kahraman2
1) Assoc. Prof., The University of Arizona, Department of Mining and Geological Engineering
2) The University of Arizona, Department of Mining
and Geological Engineering
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
NEW in 2013:
Coal and pet coke consumption and trade
Lignite & sized coal supply and consumption
issues
Coal freight-flows from ARA ports for further
delivery to the MED region
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)
For Speaking Opportunities, please contact:
Anna Sydorenko
[email protected]
+380567943394(ext.204)
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Rebuplic of Turkey, Prime
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Agency (ISPAT)
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A Complete Overview of Turkey`s Copper

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