Turkey is getting ready to take critical steps in the mining sector. The new policies and legislations prove that the sector will contribute to the economy even more in the upcoming period. The Energy Daily author, Dr. Nejat Tamzok who has evaluated all these current issues, points the accuracy of these steps with regard to mining sector.

Turkey took critical actions in mining and energy sectors in the recent period. How do you view Turkey’s “National Energy and Mining Policy” as a new act in this period? Emphasized in the energy aspect, but relatively framed on the theoretical grounds for the mining sector, “National Energy and Mining Policy” stands on the three cornerstones: supply security, domestication of the resources and technology, and becoming a predictable market. Within the policy, domestic production of the mining technologies, restructuring the organizations and empowering the metal markets are highlighted and the objectives of utilizing the enriched mineral and improving the sector via public-private joint ventures are underlined. In general terms, this policy can be regarded beneficial for the mining sector. Sustaining the supply of the raw material needs of the country through national mineral resources and maintaining the supply security should undoubtedly be a high priority. The objective to domesticate the resources is crucial in order to maintain supply security. In this manner, I regard every measure taken to increase the mining production constructive. Besides, the mining productions should be primarily driven by the demand of the national industry rather than the exports. Mainly, the importance of the mining sector in terms of the national development lays in supplying the high quality materials with low costs for the domestic industries in the long-term, instead of producing more than the local demand and then export the surplus to other countries. Integrating the national industry sectors is highly crucial in order to create high value products by enriching the minerals and organizing the national industry concurrently. In the same token, domesticating the technology is also very accurate. Utilization of the new technologies in the mining industry to improve the resource integration and production as well as producing new materials will increase the sector’s contribution to the development of the national economy. Therefore, R&D initiatives on developing and utilizing higher technologies should be prioritized in the industry. As much as building an industry which can produce new mining machinery, tools and technology will contribute to the overall efficiency in the mining sector, recruiting the workforce that is able to adapt and use these technologies will also have a direct impact. One of the major bottlenecks of the mining industry in our country is the inefficient organizational structures in both the public and private sector corporations. Improvements of these structures are important for the development of the mining sector. Accordingly to this, Mining Operations General Management (MİGEM) and MTA should be primarily treated and modern corporations should be established that are concurrent to the new era. In Turkey, there are two major acts taken place recently in the mining sector. First one is the establishment of Turkey Geological and Drilling Data Bank and the National Mineral Resource and Reserve Reporting Commission within a legislation under the General Directorate of the Mineral Research and Exploration (MTA). How do you view these acts for the sector? Although the legislations refer to the drilling data bank “new”, there has already been a data bank in MTA for a long time. This unit has been storing the data gathered by the MTA’s exploration projects and also has been creating new on-demand information out of these data. Consequently to the legislation, now in Turkey, the data of the mineral explorations and/or productions by either the private sector or the public sector other than MTA will also be stored in this data bank. Anyone to explore minerals anywhere will also be able to use these data. By this way, not only the mineral explorations will be coordinated more efficiently countrywide, but also the exploration costs will be lower. Therefore, the mentioned structure is not only essential for Turkey, but also for any other country that desire to be competent in the mining industry. Almost in all of the advanced mining countries, structures alike have been operating for so long. Thus, though it is too late, the legislation has been a very accurate act. In order to meet the expectations, the first and the foremost objective to be accomplished by the new structure is to establish a corporate reputation and sustain it in the sector in the long-term. Because, the issue is the utilization of the exploration gathered with huge costs, by the public and private sector corporations. Hence, unless the security of the data is not strong enough, let alone contributing to the explorations, this structure could even become a barrier for the potential investors in the mining sector. The other organization established by the same legislation is the National Mineral Resource and Reserve Reporting Commission (UMREK). Another major problem of the mining sector in our country is intended to be solved via this organization. This problem is the identification of the mineral resources and reserves in our country. Mineral explorations are conducted in our country but these operations aren’t usually reported by competent experts and under internationally accepted standards. Thus, the reported figures on the resources and reserves has been frequently a matter of debate. Many companies allocating their investments accordingly to this information in the reports may have been facing quite different results from what is reported and suffering significant losses. At least, the commission is expected to establish a dynamic system to identify the mines with the properties of a reserve in our country. Besides with that, the mentioned systems can only be established with the allocation of a competent and professional personnel. In commissions like organizations, this is quite a challenge to accomplish. Just like anywhere else in the world, the mining sector is one of the most typical industries that essentially require the collaboration with the private and public investments. How do you evaluate Turkey in these terms? The mining sector has now become almost entirely run by the private sector. Public investment is completely out of the mining operations except the coal and boron extraction. In boron and coal extraction, it is possible to see public-private partnerships. But, most of these collaborations are mainly consisted of royalty tenders or similar models in which the private sector companies act as a service provider. In these models, the government utilize the subcontractor’s technical, financial and know-how capital, but there can be negative outcomes such as the work safety issues. Public-private joint-ventures are not common in Turkish mining sector. However, the public-private joint ventures could be a solution for the structural problems mentioned earlier about the mining sector in our country. At this point, the public-private collaboration model in which the strategic objectives are accurately identified such as processing the extracted minerals into high-value products; establishing a developed mining machinery and equipment industry; institutionalizing the R&D activities; establishing organizations with strong capitals that are internationally competent in the mining sector; developing the engineering and project capabilities would be highly beneficial for the industry. What does the sector promise for the foreign investors? Are there foreign investors in this field? How do you anticipate this issue for the upcoming period? Looking at the Central Bank data, we see that the level of foreign direct investment in mining sector in Turkey is very low and fell below the 40 USD million level in the last 4 years. In contrast, the Turkish mining investments in the foreign countries is consistently increasing in the recent years. In the past years, some of the foreign direct investments in the mining industry had significant contributions to our country, particularly, in terms of technology, environmental consciousness and work safety. Therefore, the foreign investments, along with its employment potential, should also be emphasized in terms of technology and know-how transfer to our country. 

"IN ORDER TO MEET THE EXPECTATIONS, THE FIRST AND THE FOREMOST OBJECTIVE TO BE ACCOMPLISHED BY THE NEW STRUCTURE IS TO ESTABLISH A CORPORATE REPUTATION AND SUSTAIN IT IN THE SECTOR IN THE LONG-TERM."