Mining Turkey Magazine Number 10 by Madencilik Turkiye (Mayeb Ltd.)

ISSN: 2146-9423

Mining & Earth Sciences Magazine Spring 2016 | Vol 5 | Number 10 | www.miningturkeymag.com

To be the Deepest Underground Lignite Mine in Turkey: Polyak Eynez KĂśmĂźrder, Addresses the Need and Support for Reforms in Coal Mining Coal Mining in Turkey and its Role in Energy Supply

contents Mining Turkey is published biannually by Mayeb Madencilik ve Yer Bilimleri Basım Yayın Dağıtım Ltd. (Yayın Sahibi) A. Öveçler Mah. 1335. Sk. Vadi Köşk Apt. No: 6/8 Çankaya / ANKARA / TURKEY Phone : +90 (312) 482 18 60 • Fax : +90 (312) 482 18 61 info@miningturkeymag.com • www.miningturkeymag.com Editor Dr. Erdem Yetkin erdem@miningturkeymag.com International Relations Eray İmgel eray@miningturkeymag.com Managing Editor (Sorumlu Yazı İşleri Müd.) O. Çağım Tuğ cagim@miningturkeymag.com General Coordinator Onur Aydın onur@madencilik-turkiye.com Administrative Affairs Volkan Okyay volkan@madencilik-turkiye.com Graphic Design Gökçe Çınar gokce@madencilik-turkiye.com Web Technologies Bilgin B. Yılmaz bilgin@madencilik-turkiye.com Legal Adviser Av. Evrim İnal evrim@madencilik-turkiye.com Academical Advisers Prof. Ali Sarıışık Prof. C. Okay Aksoy Prof. Erol Kaya Prof. Hakan Benzer Prof. İlkay Kuşcu Prof. M. Emin Candansayar Prof. Özcan Yiğit Prof. Talip Güngör Assoc. Prof. Melih Geniş Assoc. Prof. Melih İphar Assoc. Prof. Niyazi Bilim Assoc. Prof. Nuray Demirel Advertising Sales advert@miningturkeymag.com Annual Subscription Enquiries subs@miningturkeymag.com Printhouse Başak Matbaacılık ve Tanıtım Hiz. Ltd. Şti. Macun Mah. Anadolu Bulv. No: 5/15 Yenimahalle - ANKARA Tel: +90 (312) 379 16 17 Publication Type and Period (Yayının Türü ve Şekli) Worldwide (Yerel Süreli) - Biannualy (6 Aylık İngilizce)

ISSN:

3..... FROM THE EDITOR 4..... TURKISH MINING SECTOR NEWS 22..... TO BE THE DEEPEST UNDERGROUND LIGNITE MINE IN TURKEY - Polyak Eynez 24..... DAMA ENGINEERING IS ELEVEN YEARS OLD - Dama Engineering 26..... COMPANY OVERVIEW-ALS LIMITED & ALS COAL SERVICES - ALS Minerals 28..... RUNGEPINCOCKMINARCO SOLIDIFIES PRESENCE IN TURKEY TOGETHER WITH ARDEF - Ardef 32..... KÖMÜRDER, ADDRESSES THE NEED AND SUPPORT FOR REFORMS IN COAL MINING - Muzaffer Polat 34..... MINENCO MINING ENGINEERING CONSULTANCY - MinenCo Mining 36..... COAL MINING IN TURKEY AND ITS ROLE IN ENERGY SUPPLY - Halim Demirkan 48..... GLOBAL MINING INTELLIGENCE - Fugro 49..... INFORMATION NOTE ON SUPPORT REQUIREMENT FOR ENERGY GENERATION FROM LOCAL COAL - Kömürder 54..... AKÇELIK MADENCILIK - Akçelik Madencilik 56..... FAMUR-ERKOM DELIVERS HIGH END PRODUCTS FOR MINING OPERATIONS - Erkom 58..... ORTADOĞU DRILLING - Ortadoğu Drilling 59..... GOLDER ASSOCIATES - Golder Associates 60..... EXPLORATION LABORATORY SERVICES - ALS Coal 62..... INDEPENDENT REPORTING FOR COAL MINES IN TÜRKIYE - SRK Consulting 64..... ÚJV ŘEŽ, A. S., DIVISION ENERGOPROJEKT PRAHA SCOPE OF SERVICES AND EXPERIENCES - ÚJV 66..... THE HISTORY OF COAL IN TURKEY AND THE STORY OF ITS ORIGINS - Arda Ayhan 74..... SANDVIK BIT GRINDING MACHINE IS OPERATED WITH FULL - Sandvik 80..... ADVERTS INDEX

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Polyak Eynez Mining Project is an underground mine consisting of one inclined drift and two vertical shafts. The inclined drift is 3,500 m having-14-degrees slope whereas vertical shafts are 800 m long vertically with 8 m diameter. The construction has started in September 2014 for the inclined drift and in March 2016

for two vertical shafts. The annual production capacity is planned to be 5 million tons and the infrastructure will be adequate for 8.5 million tons/year capacity. Production is planned to be commenced in 2018.

Editor www.miningturkeymag.com

From the Editor Erdem Yetkin | Consulting Geologist, PhD, CPG | erdem@miningturkeymag.com It has been a great experience for me to get involved as the editor of this great issue of Mining Turkey magazine. Energy and natural resources of a country affects almost everything for its population and its global strategies. Unfortunately, in today’s world almost all the wars and/or conflicts have without exception one main target, to control energy and natural resources. Geopolitics is one word that describes best for this period Turkey passing through. Other than in-country resources Turkey plays a very important role as being an energy corridor between the producer and consumer countries. Energy politics are the dominant factor shaping today’s global economy and commodity prices within. We are living in a “developing” country. The word development inspires other words like economy, education, science & technology, production, employment, environment and so on. Without energy, we cannot develop and move forward in the areas of inspired words just mentioned. As simple as it is, if we can produce our own energy, we would not be dependent on some others. As being an exploration geologist for quite some time I am so aware what Tall Mehmet might have thought the first time he saw the black rock fragments on the stream channel, the excitement and happiness. And he was right! The passion to discover drives me and most of my colleagues working in mining and exploration community. As in all aspects of life we are responsible for our actions, every single one of us. Every occupation has varying degrees of risks but definitely mining related jobs rank higher on the list. Where there is risk, there are measures had to be taken to eliminate and/or reduce the factors. Employer, engineer, technician, worker whatever the title is we should not forget that our most valuable resource is our human resources. I am mercifully commemorating those who lost their lives in occupational incidents. Health and safety is a chain of events purely made up of responsibility likewise environmental impact. As a country, Turkey needs to produce its own energy urgently than ever and coal has a significant role in that aspect. Regulations should be in place and measures should be taken but the real challenge is to change our minds. Every one of us is a part of this challenge and if we start acting responsibly that is the only way to make a change towards a sustainable future. I would like to express special thanks to Kömürder Secretary-General Halim Demirkan for his endless energy in supporting this special issue of Mining Turkey and wish him the best of success in his dedicated efforts for coal mining in Turkey. I would also like to thank to the editors of previous issues who had great efforts to carry the publication to this 10th issue.

Special thanks to Coal Producers Association (KÖMÜRDER) for supporting and sponsoring this special issue on Coal Mining in Turkey. They have a very important mission to start and shape the change and we are very happy to get involved in their efforts.

Subscribe for new Issue alerts and more! www.miningturkeymag.com Spring 2016

News www.miningturkeymag.com

Royal Road Minerals Announces Sale of Turkish Subsidiary Tigris Eurasia Madencilik Royal Road Minerals Limited, a gold focused mineral exploration and development company, announced that it has entered into an agreement with Ravello Investment Group Limited. Pursuant to which the Royal Road agreed to sell and

Ravello agreed to purchase, all of the issued share capital of Tigris Eurasia Madencilik Sanayi ve Ticaret Limited Şirketi, the Royal Road’s wholly-owned Turkish subsidiary, that holds the Company’s exploration and mining licenses with

respect to its Pertek project, its exploration database for Turkey, and certain other equipment and assets related to its former operations in Turkey, which have now been discontinued. November 2015

Alanköy Project Optioned to Black Sea Corporation Eurasian Minerals Inc. announced the signing of an Exploration and Option Agreement with Black Sea Copper & Gold Corp. (“Black Sea”), a privately-held British Columbia corporation, for the Alankoy copper-gold property in northwestern Turkey. Black Sea has the option to earn a 100% interest in the subsidiary companies that control the property through work commitments, payments, and annual advance royalties. EMX will retain an

uncapped production royalty for all minerals produced from the project. Alanköy is located in Turkey’s Biga Peninsula, hosting a cluster of exploration projects, including the nearby Halilağa porphyry copper-gold, TV Tower and Kirazli epithermal gold-silver deposits. Like other systems in the area, Alanköy is characterized by alunite-rich epithermal alteration and the development of vuggy silica lithocaps.

November 2015

Odaş will Complete Çan 2 Thermal Powerplant

Odaş, being in search for ways of effective electricity production, has changed its direction to local coal sources with high calorific values. Accordingly, Odaş has purchased 92% capital share of Çan

Kömür A.Ş and started to work for production of electricity from coal reserve with 3,481 kcal/kg average calories. Odaş shared an update about thermal powerplant that the investment will be completed as planned in the second half of 2017. It is also stated that as part of the planned investment program, one of the most important components of environmental considerations

being the Flue Gas Treatment system will be manufactured and implemented by a globally experienced and well known group. Among the thermal power plants in Turkey running with local lignite, the highest calorific value coal is going to be used in the plant. Power plant will have 330 MW of energy production capacity. Coal being produced with high calorific capacity can be sold directly in retail market as well. Powerplant will have higest heating capacity coal as regards to other termic powerplants in Turkey. December 2015

Ekin Maden Closed Chromite Concentration Facilities Chromite producer group Ekin Maden AŞ announced that they are closing production facilities due to the lower commodity prices and will withhold the sale of the current stocks until the reasonable prices are reached. The group was

Spring 2016

producing 48 % chromite concentrate in the facilities and selling the product to the local and international markets. The company authorities stated that the falling prices in the global markets together with the decrease in Chinese demand is

forcing other local chromite producers to halt production as well. They also stated that a total of 400.000 tonnes of chromite produced in Turkey will be exported by the year end (2015). November 2015

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Stratex Announced Sale of Öksüt Royalty Stratex International Plc, announced that it has sold its 1% net smelter return (‘NSR’) royalty for the Öksüt gold project in Turkey to former joint-venture partner Centerra Gold Inc. for US$4.5 million. Bob Foster, Stratex Chief Executive, said: “This transaction completes a very significant year for Stratex which culminated in

the first gold pour from our 45% owned Altintepe Gold Mine in Turkey. Centerra have targeted first gold production at Öksüt for early Q2-2017 (announcement dated 10th November 2015), which would have seen the first royalty payments to Stratex later that year and continuing for the life of the mine, currently estimated to be a minimum of eight

years. However, realising the royalty now, rather than waiting for future payments, eliminates any project risk, permitting delays, or further weakness in the gold price and provides us with the platform to develop our growth strategies in 2016 with confidence.” December 2015

Initial Shipment from Balya by Dedeman Eurasian Minerals announced that it has been advised of the initial shipment of material for processing from the Balya lead-zinc-silver royalty property by owner and operator Dedeman Balya Kurşun Çinko İşletmeleri A.Ş. Since acquiring the Balya property from EMX in 2006, Dedeman has built asset value for the property. Hastanetepe is a 750 by 450 meter zone that extends from depths of 10-20 meters to 200-300.

Dedeman’s development work has concentrated on an area of shallow, high grade mineralization on the northeast margin of Hastanetepe, with a production shaft and two working levels at 45 and 75 meters below the surface. In addition to the Hastanetepe Zone, Dedeman’s earlier drilling identified lead-zincsilver mineralization in the “Southern Zone” adjacent to the Esan Eczacıbaşı underground mining complex.

The first shipment of approximately 500 tonnes of high grade (>15% Pb+Zn) material and 3,700 tonnes of medium grade (8-15% Pb+Zn) material have been shipped to Dedeman’s mill at Kayseri for processing EMX retains an uncapped 4% net smelter return royalty (NSR) on the Balya property, which is located in the historic Balya mining district of northwestern Turkey. December 2015

Record Breaking Depth is Reached at Kastamonu Privatization of Eti Copper and operation of its Küre facilities are totally a success story. First time in Turkey, operational depth of 960 meters is reached. When facility privatized in 2014, operation was about to stop like Eti Copper’s other facilities. Bu today the facility is a role model for other operations. Ahmet Tezcan Operating Manager of Küre Facility said; “Facility in Küre will be an example to all mines in Turkey. We are always ready to share our experience. We reached to 960 m depth first time in Turkey. Minerals are carried to surface by an elevator. Our workers will get on elevator and go down to 960 m depth in 2016 from our administrative building situated at the highest point in town.” High-end technology is used in the underground mining. Ahmet Tezcan said; “There is a total of 40km long road track in the underground mine and excavation is being continued by heavy machinery. Heavy machinery is operated

Spring 2016

remotely. Operation control rooms are away from excavation site and process controlled remotely by operators. Even there is no risk of accident in the mine, camera controlled safe rooms are available as a part of our safety policy.” Tezcan stated that; “When the operation was taken over in 2015, production was predicted to last less than 2 years for the open-pit operation. By the result of our extensive exploration efforts, estimated life of mine exceeds 20 years including the underground operations. Working underground increased our costs by 35%. Because we prioritize our workers’ safety we are using latest technology and equipment as a part of our health, safety and environment policies. Before we take over the operation,

production was 710.000 tons in 10 years, but now 1,250 million tons per annum can be produced at the mine.” Tezcan added about the outcome of the operation as; “There are 700 people employed in the operation from Küre. Directly and indirectly, we provide employment to 3000 people. We provide huge contribution to economy of Küre.” Tezcan gave information about the exploration program and said; “Underground resources are part of the national treasury, we are still exploring to increase the resource figures. We made 100,000 meters of drilling including Turkey’s deepest diamond drill hole with 2,450 meters of depth.” December 2015

Significant Results from Kızıltepe and Kızılçukur Projects Ariana Resources plc the gold exploration and development company operating in Turkey, announced the results of its drilling programme, completed during November, at the Kizilcukur Project, which is located approximately 22km to the northeast of its Kiziltepe Mine. Kizilcukur is located outside of the Red Rabbit joint venture with Proccea Construction Co. and is 100% owned by Ariana. Highlights from the announcement are as follows: • 1,598 meters of new Reverse Circulation (“RC”) drilling identifies high-grade and near surface zones of mineralisation within the Kizilcukur vein system; all intercepts hit mineralisation within less than 60m from surface. • Best infill intercepts include, 8m @ 7.6g/t Gold + 194g/t Silver, 5m @ 3.5g/t Gold + 263g/t Silver and 11m @ 1.3g/t Gold + 73g/t Silver. • 76 meters of rock-saw channel sampling also completed, with best results of 2.0m @ 10.5g/t Gold + 455g/t Silver, 2.7m @ 4.4g/t Gold + 229g/t and 2.5m @ 3.1g/t Gold + 177g/t Silver. • New drilling data permits refinements to the geological model and will enable a revision of the JORC resource for Kizilcukur in order to assess its potential as a satellite operation to the Kiziltepe Mine. Dr. Kerim Sener, Managing Director, commented: “We are very pleased with the results of the drilling programme, which demonstrate the potential of the Kizilcukur Project to contain a resource that may become a higher-grade satellite operation to the Kiziltepe Mine, which is in construction. Mentioned in a following news release the company announced results from its final phase of drilling at Kiziltepe in 2015. Kiziltepe being part of the Red Rabbit Joint Venture with Proccea Construction Co. and stated to be 50% owned by Ariana once mine construction is completed in H2 2016. Highlights for this update are as follows:

Spring 2016

• Three new exploration holes into Arzu Central, between the Arzu North and Arzu South production areas, confirms the potential of a 600m extension to the known mineralised strike length of the Arzu vein system. • Best intercepts from this area include, 22m @ 2.93g/t gold + 29.76 silver, 10m @ 2.32 g/t gold + 46.79g/t silver and 5m @ 0.99g/t gold + 13.62 g/t silver. • Near surface pre-production drilling over Arzu South provides for advanced scheduling before open-pit mining commences. • Best pre-production drilling results include, 5m @ 3.23 g/t gold + 68.60g/t silver, 3m @ 4.98g/t gold + 74.57 silver and 4m @ 3.38 g/t gold + 76.40 g/t silver. Dr. Kerim Sener, Managing Director, commented: “This is an extremely exciting development in the exploration of the Kiziltepe Mine area. We have now confirmed the potential for Arzu Central to contain mineralisation of the same calibre as the rest of the Arzu vein system. In time, such additions to the resource base may further increase the mine life of Kiziltepe well beyond the eight years currently planned.” In another news release dated 07 March 2016, Ariana Resources plc announced an increase and upgrade of its JORC compliant Mineral Resource estimate for the Kizilcukur Project following its recent drilling programme in Turkey. Kizilcukur is located outside of the Red Rabbit joint venture with Proccea Construction Co.

and is 100% owned by Ariana. Highlights are as follows: • 100% increase in the Mineral Resource to c.308,000 t @ 2.11g/t gold and 73.4g/t silver, for 33,000 oz gold equivalent (Indicated + Inferred) • Mineral Resource largely defined within three shallow (40-90m deep) open-pit shells following Whittle optimisation • Potential for 18 months of add-on mine life for the Kiziltepe mining operation if the Kizilcukur area is developed as a satellite mining region • Significant exploration upside along strike and on sub-parallel vein splays; potential remains for resource growth • Mining permit already in place for seven years, as announced on 18 November 2015 Dr. Kerim Sener, Managing Director, commented: “This is a very encouraging result from our first drilling programme at Kizilcukur. For only 1,598m drilled we have been able to expand the Mineral Resource by approximately 100%. This represents an exploration discovery cost of approximately US$7 per ounce, which has again emphasised how costeffectively we are able to deliver on our exploration programmes.” The merits of Kizilcukur as a potential satellite operation to the Kiziltepe Mine are obvious, as early scoping works point to a potential 18 months of additional combined project mine life. February 2016

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Mining Association of Canada (MAC) has Recognized First Quantum Minerals Ltd with TSM Leadership Awards

For their outstanding performance in the Towards Sustainable Mining (TSM) initiative and commitments to corporate responsibility, the Mining Association of Canada (MAC) has recognized First Quantum Minerals Ltd with TSM Leadership Awards. This year, for the first time, TSM Leadership Awards were given to mining operations outside of Canada. These include First Quantum Minerals’ Çayeli mine in Turkey, Agnico Eagle’s Kittila mine in Finland, IAMGOLD’s Essakane

Gold Mine in Burkina Faso and IAMGOLD’s Rosebel Gold Mine in Suriname. Implementation of TSM is mandatory for all MAC members’ Canadian facilities, however, these companies voluntarily apply TSM to their international sites as a way of demonstrating that they are managing their responsibilities throughout the world to the same high standard as their Canadian operations. “This year, we recognize eight facilities with TSM Leadership Awards for their stand-out performance in our TSM initiative and congratulate them and their staff for raising the bar in environmental and social performance. Awarded annually, this is the highest number of winners we have seen yet,” said Pierre Gratton, President and CEO, MAC., Health Safety & Environment Manager Mehmet Eğriboyunoğlu from Çayeli Bakır İşletmeleri received the award from Pierre Graton. 2015 TSM Leadership Award Winners: • Agnico Eagle Mines Limited, Goldex mine • Agnico Eagle Mines Limited, Kittila mine • Agnico Eagle Mines Limited, LaRonde mine

• First Quantum Minerals Ltd., Çayeli mine • IAMGOLD Corporation, Essakane Gold Mine • IAMGOLD Corporation, Rosebel Gold Mines N.V. • IAMGOLD Corporation, Westwood Mine • Teck Resources Limited, Line Creek Operations TSM’s requirements go well beyond regulatory obligations and are designed to improve industry’s operational performance in key environmental and social areas of mining. The TSM Leadership Award is granted only when an operation meets or exceeds a Level “A” ranking for all 23 indicators under the six performance areas of the TSM initiative (known as “protocols”); safety and health, Aboriginal and community outreach, crisis management, tailings management, biodiversity conservation management, and energy use and greenhouse gas emissions management. An operation’s TSM results must be externally verified to be eligible for this recognition. The 2015 winners were selected based on their 2014 TSM performance results. January 2016

Draft Law Including Government Support to Mining Companies, Approved Planning and Budget Commission of Grand National Assembly of Turkey accepted the draft about amendment of law and delegated legislation. Part of regulations in draft are closely related with mining companies. Government will bear the cost of regulations which are made after disaster at Soma in 2014. Government will supply business’ cost increases. Increases are comprised of reasons like; overtime fees, increased annual leaves and decreased work-

Spring 2016

ing hours to 37.5 hours, employees fees can’t be under twofold minimum wage. Support will be covered from Ministry’s budged. Deputy Energy and Natural Resources Minister Ali Rıza Alaboyun said; ‘’Regulation will boost private sector mining. Support will be delivered according to tonnes of production or employee counts and will reach to 250 million liras.’’ Restrictions on obtaining Ministry’s support is mentioned in draft. Com-

panies should handle carefully with workers’ insurance paperwork otherwise companies can’t benefit from support. After the law which enacted after Soma disaster, 117 out of 170 business closed and production dropped by 37%. If this draft is legitimized, coal production is expected to recover. December 2015

Turkey’s Mineral Exports Decreased in 2015 Permission delays in exploration and production being the major issue; combined with the declining commodity prices, internal and external politics and economics, total exports together with mineral exports decreased.

Mineral exports, after setting a record in 2013 with US$5 billion decreased to US$4.6 billion in 2014 and to US$3.9 billion in 2015. The expected target was US$6 billion by the Turkish Exporters Association for the year 2015. January 2016

SEG (Society of Economic Geologists) 2016 will be Held in Turkey, Registrations are Now Open The Society of Economic Geologists, Inc., (SEG) is an international organization of individual members with interests in the field of economic geology. The Society’s membership includes representatives from industry, academia, and government institutions. SEG provides annual meetings, publications, field conferences, and short courses periodically. Today the Society consists of more than 7000 members residing

in over 90 countries throughout the world. SEG 2016 conference will be held in Turkey and is jointly hosted by the Society of Economic Geologists (SEG) and Turkish Association of Economic Geologists (MJD). We are supporting this highly valued organization with our Madencilik Türkiye and Mining Turkey magazines as being media partners. The conference will be held between

25th and 28th of September 2016 in Çeşme-İzmir and will bring together the highly skilled economic geologists. Tethyan Tectonics and Metallogeny is the main theme of the conference and the registrations are now open to seminars, field trips and guest activities. You can visit www.seg2016.org for detailed information and registration. March 2016

MİGEM Announced Auction for 606 Tenement Areas General Directorate of Mining Affairs (MİGEM) has announced that a total of 606 tenement grounds will be auctioned starting from June 2016. The tenements consist of varying groups of licenses according to the mineral content reported. Most of the metallic and industrial minerals fall into group

4 type of licenses. The announcement involved 46 tenements in group 1B, 6 in group 2B, 2 in group 3, 1 in group 5, 209 in group 2 and 342 in group 4. The detailed information can be found at www.migem.gov.tr. May 2016

Mariana and Lidya Signed JV Agreement on Hot Maden Project

Mariana Resources Ltd announced that announced that it has signed a comprehensive agreement with Joint Venture partner Lidya Madencilik Sanayi ve Ticaret A.Ş. Highlights of the agreement are as follows: • Signing of agreement to formalise Mariana’s JV relationship with Lidya to further explore and develop the potential of Hot Maden. • The agreement governs Mariana’s 30% and Lidya’s 70% interest in the project, managed by a four‐ member Board comprising three directors from Lidya and one from Mariana. • 2016 total budget of circa US$8 million dollars is proposed for the Hot Maden project. • Mariana anticipates that 20,000m of extension and infill drilling will be completed in the resource area during 2016, with a minimum of 5,000m completed during Q1.

Spring 2016

• A Preliminary Economic Assessment on Hot Maden is anticipated to be completed by Q4 2016. CEO, Glen Parsons, today commented: “The signing of the agreement cements Mariana’s growing relationship with Lidya and will enable the JV to fast track the development of the high grade gold‐copper Hot Maden asset. The planned drilling, and additional technical studies, will lead to a PEA later this year, which would include various mining scenarios of this exciting gold‐copper discovery. In addition, we anticipate that the exploration for further mineralised bodies along the unexplored sectors of the 6km Hot Maden fault zone will become more of a focus.” In a news release dated 26 May 2016, Mariana announced the High Grade Gold-Copper intercepts from Hot Maden. Highlights are as follows; • High grade gold‐copper mineralization has been confirmed in the chalcopyrite‐ pyrite‐bearing breccia from 262m downhole in hole HTD‐52, 140m downdip of the discovery hole HTD‐4 intersection. This new extension lies outside the current mineral resource model and is therefore expected to provide a positive contribution to the next mineral resource update. - HTD‐52 31.5m @ 4.4 g/t Au + 0.77% Cu from 262m, and 18.5m @ 0.4 g/t Au + 2.24% Cu from 295m • Exceptional gold‐copper assays have been returned from exploration drilling in the southern target area, located 400m south of the existing resource

area and within the northern extension to the pre‐1923 vein mining area. - HTD‐53 40.5m @ 8.8 g/t Au + 0.77% Cu from 158.0m downhole Including 12m @ 22.2 g/t Au + 0.66% Cu from 183.0m downhole - HTD‐51 1.0m @ 90.1 g/t Au from 163.0m downhole and 1.0m @ 22.9 g/t Au from 117.0 m downhole • Previously released higher grade intersections in this lightly drilled area include: - HTD‐25 25.2m @ 7.3 g/t Au + 0.47% Cu from 42.8m and 23.5m @ 3.8% Zn from 80.5m - HTD‐27 39m @ 5.8 g/t Au + 0.7% Cu from 88m and 57m @ 0.8 g/t Au + 0.6% Cu + 3.1% Zn from 231m Chief Executive Officer Glen Parsons commented: “The confirmation of these high grades, following visual identification of sulphides, is extremely encouraging both in the current resource area as well as further to the south. Specifically hole HTD‐52 is now confirming the deeper resource extension below discovery hole HTD‐04, and holes HTD‐51 and HTD‐53 highlighting further potential to the south in the new discovery area. In the South, we are seeing multiple narrow but extremely high grade quartz sulphide vein and veinlet zones, typical to what was mined by the Russians in the early 1920’s, as well as wider zones of well mineralised veinlet/breccia style mineralisation. January 2016

Pasinex Zinc Production Continues Pasinex Resources Limited announced that it has completed two separate lot sales of high grade direct shipping zinc mineral material from its Pınargözü zinc mine in Adana province, Turkey. One lot was an oxide zinc mineral (predominantly the zinc mineral smithsonite), while the second lot sale was a sulphide mineral (sphalerite) which was also high grade direct shipping material. Steve Williams, President and CEO of Pasinex commented, “These latest lot sales included some sulphide mineral-

ized material. This is significant because sulphide mineralization has greater concentration of zinc due to this being predominantly a massive Zn mineral called sphalerite. Therefore, this has even further improved the overall grade of the product we are selling. This is the first sulphide zone we have mined at Pınargözü. What this means to the Joint Venture is improved cash flow due to a higher overall grade of the DSO (direct shipping ore). It also is important geologically because we are now starting to see sulphides in a

system that has, to date, been all oxide mineralization. Naturally, we are very excited to have encountered the sulphide zone.” The Horzum JV has been operating profitably for the first three months of this year and continues to exceed the plan. Ten mining faces have now been opened and the Company will continue ramping up production by mid-year. In an earlier news release company has announced the increased production rate as 60 tonnes per day. April 2016

Çayeli Bakır Accelerated its Exploration Activities Indicating that the mine will expire in 2019, Çayeli Bakır İşletmeleri started executing its search for additional reserves on the license site on a wider scale. Çayeli Bakır İşletmeleri, executing exploration operations to find new reserves, takes soil samples as well as drilling methods during exploration. The company, predicting that the current mine reserve will be depleted in 2019, executes mine searching activities in an area of about 90 km2 in its license area. In line with these operations, soil samples are taken from 2.300 different points within the licensed area and then the samples are sent to the laboratory for analysis.

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Iain Anderson, Managing Director of Çayeli Bakır, said: “Providing the current mine prices remain the same, we expect the mine life will expire and the mine will be closed in 2019. We would like to continue our mine exploration activities both for our employees and for the company. We have accelerated our already ongoing mine exploration activities in this respect. We conduct operations on our license area covering about 33 villages. All of our neighbors we have visited to explain such activities until now gave their support in this respect. I would like to extend my gratitude to each and every one of them”. January 2016

Aksa Invests to Local Coal in Göynük The second phase of local coal-powered Aksa Göynük Thermal Power Plant is now operational. Construction of the power plant was started in 2012 by Aksa Energy. Ministry of Energy and Natural Resources approved the second phase of thermal power plant being capable of producing 135 MW of energy production. With this completed phase the plant’s total energy production capacity increased to 270 MW. Aksa Göynük Power Plant is one of

the two thermal power plants which are invested by private sector and powered with local coal sources. The power plant is completed with a total of 390 million US $ of investment. With the total installed power capacity of 270 MW the plant will generate 2 billion kw/h power per annum and provide energy demand for a population of 600.000. Aksa energy is a public company on stock exchange market and also one

of the leading energy companies in Turkey. Aksa Energy has 2,211 MW installed power production capacity as for today. Company known for environment friendly approach. Flue-Gas Desulfurization (FGD) system is installed to Aksa Göynük Power Plant and has specialty to be the first in Turkey. With the installation of FGD, the thermal power plant reached to low emission levels set by European Union for 2018. February 2016

Koza Increased Reserves and Resources in 2015 Koza Altın İşletmeleri announced total resource and reserve figures as of 31.12.2015 according to International JORC technical report standarts. According to the news release total of 38.490 m of core drilling completed as part of exploration during the year 2015. The geological studies and geochemical analyses led to revised figures of total measured+indicated+inferred re-

sources as 13.2 Moz; proven+probable reserves as 4.0 Moz. It is stated that the annual increase in the reserve figures is 3.7%. Also noted in the statement, company managed to increase the resource and reserve figures despite the local difficulties in permitting, lower gold prices and therefore increased cut-off grades. In the light of core drilling data and

geological work, total possible resources 13.2 millon onz, total possible reserves 4 million ons. According to statement despite problems like delay of permit and changes of gold value in 2015, Company don’t stop exploration. Geologists and miners carry on working. With all this effort Company rised its amount of resources and reserves. February 2016

Berat Albayrak Announced Revised Plans for the Energy and Mining Sectors

Minister of Energy and Natural Resources, Berat Albayrak announced energy sector’s updated course of action. Albayrak made a presentation about ministry’s budget to planning and budget commission of the Parliament (TBMM). Investment required in energy sector will increase to more than 110 billion dollars in 10 years.

Spring 2016

According to Albayrak’s statement; “Increasing local coal share in energy production, increasing total natural gas storage capacity to 5.3 billion m3 and increasing total reproduction capacity to more than 100 million m3 are aimed by 2019. Total installed capacity of renewable energy-powered plants is planned to be reached to more than 45,000 MW until 2019 year end.” Albayrak; “Currently, installed electricity generation power is increased from 4,288 MW to 73,148 MW in Turkey. Our country’s energy demand is rising rapidly. Decreased oil prices changed the dynamics in the game. We are making our plans to secure the supplies for the increasing energy demand and reducing foreign dependency on the longer term. Nuclear power plants will start generat-

ing electricity until 2023 and the project for the third nuclear power plant will be commenced. A significant part of lignite and hard coal resources also will be used for power generation until 2023.” Albayrak also made a statement about the mining sector; “Environment friendly approach, prioritizing occupational health and safety systems and sustainable mining systems are important for managing our natural resources and developing our economy. Mining related paper work will be carried out online for better management of natural resources and increasing its contribution to economy. Drilling operations carried out by public establishments will be increased to a total of 200.000 meters by the end of year 2019. February 2016

Prosecution and Coordination Committee for Energy Investments is Agreed To Be Established Energy demand in Turkey is still rising. New plans are taken into consideration for energy supply. Prime Ministry decided to form ’’Prosecution and Coordination Committee’’ to prevent delays on completed and ongoing projects and committee aims to provide coordination between institutions. Course of action for Local Energy Production Program is included in 10th De-

velopment Plan (2014-2018). In this program using and developing local energy resources is prioritized. In report, steps to gain profits from local coal resources and renewable energy is pointed. Prosecution and Coordination Committee for Energy Investment’s responsibilities include; Providing control and coordination between institutions, hasten investment processes for increasing

electricity production capacity, transmission facilities and inspection of new production plants. Annual meetings will be convened a time agreed by Committee. Decisions will be carried on by Energy and Natural Resources Ministry’s General Directorate of Energy. Every kind of support will be provided by all institution with carrying out decisions. February 2016

BİST Mining Index 2015 Profits have been Announced Net profits of the companies that are open to trading under Borsa İstanbul Stock Exchange (BİST) Mining Index are announced according to the preliminary tax and financial reports submitted to the tax administration covering January 1st-December 31st period for

the year 2015. According to the statement, companies’ profit/loss numbers are as follows; • Koza Altın İşletmeleri AŞ Net profit 374.811.024 TL • Park Elektrik Üretim Madencilik AŞ Net profit 22.874.937 TL

• Koza Anadolu Metal Madencilik AŞ Net profit 18.166.507 TL • İpek Doğal Enerji Kaynakları AŞ Net loss 20.570.991 TL • İhlas Madencilik AŞ Net profit 833.609 TL February 2016

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Cement Sector Representatives Foresee Limited Growth At the 58th General Meeting of Turkish Cement Manufacturers’ Association, M. Şefik Tüzün elected as the new president. Tüzün made statements about cement industry. Cement is among important raw materials in construction industry and support manufacturing industry. Industry is affected negatively by uncertainties’ caused by general election in Turkey in 2015. M.Şefik Tüzün said; ‘’Most promising news in this period is decreased oil prices. Despite these complications, it’s important to past through this year with 3-5% growth. 59.5 million tonnes cement is produced and 10.2% of this amount is exported in first eleven month of 2015.’’ M.Şefik Tüzün stated; ‘’Cement factories are second big energy consumers in

Turkey. In the aspects of sustainability, reducing national energy consumption and national environmental policy, our sector prioritized energy efficiency principle in 2015. We will continue this understanding in 2016.’’ M.Şefik Tüzün stated his expectations for 2016. Tüzün; ‘’with ongoing mega projects, new housing and infrastructure projects, urban transformation projects and continued attention of foreign investors, 2016 will be more buoyant then 2015. With this knowledge, we expect cement industry to grow 3-5% due to our country’s development prediction. In domestic market 67 million tonnes cement will be sold and 11 million tonnes cement and clinker will be exported.’ Increasing geopolitical risks, FED’s in-

terest increasing policy, slowdown in China’s growth, European Central Bank (ECB) decisions in Europe, warfare and distractions on our neirbourhood will affect 2016 performance. Despite increasing in Africa and America’s market share, Europe’s market share will decrease. Our strengths like being close to markets that have potential to export, having enough raw material, high product quality make us advantageous in exportation. Highways are used in developed countries for years. Building concrete highways in Turkey will provide important development fields to cement industry. Operation and maintenance fees are low .İt will be used all across Turkey at least that’s what we think ‘’ M. Şefik Tüzün said. February 2016

Stratex International Announced Year End Results Highlights from the statement are as follows: The Company entered a new phase in its existence with the start of production at the gold mine in Turkey. Stratex has a 45% interest in the operation and undertook much of the early exploration work at the site. The first gold pour was achieved on 5 November 2015. Stratex partner Lodos completed a feasibility study at the Muratdere coppermolybdenum-gold project in Turkey as part of its commitment to earn into

70% of the project. Stratex’s 1% royalty on the Őksűt gold project, received as part of the consideration for the sale of a 30% interest in 2012, was sold to Centerra, the operator, for US$4.5 million. Non-Executive Chairman Christopher Hall stated that; “Stratex achieved some significant objectives in the year ended 31 December 2015, although the political and economic environment in which the mining industry operates continues to be uninspiring. Mining share price indices

have declined significantly, metal prices are weak, dividends are being cut and global economic growth remains patchy. Nevertheless Stratex is better placed than many of its peers. We continue to seek to reduce overheads and are making progress with this in Turkey, Senegal and with Goldstone. Production at Altıntepe is expected to develop into cash flow and the Board and management are redoubling efforts to find a new project which will increase and diversify our cash flow. December 2015

Regulation About “Authorized Legal Entities” Issued in the Official Gazette

Long awaited regulations about authorized legal entities went into operation. Regulations first named in the law no

Spring 2016

6592 ‘’Law about Alteration of Mining Law and Some Other Laws’’ Regulation has issued in the official gazette and went into operation after 1 year 3 months. Regulation is related with all people and institutions working in mining sector. According to the issued regulation, legal entities should employ at least 5 personnel. of which 3 of them should be full time including one mining and

one geological engineers with minimum 5 years of relevant experience, and the 2 regulation include provisions about; conditions about legal entities, formation of commission and procedures and principles, authorization, endorsement, suspension, cancelation of compliance certificate, inspection of authorized legal entities. June 2016

Alacer Announced Updates on New Exploration Targets in Çöpler Region Alacer Gold Corp. announced drilling results from the Company’s exploration program in Turkey. Drilling results are from several areas in the Çöpler District, including Yakuplu Southeast, Yakuplu East, Yakuplu North and Bayramdere. From the statement; “Exploration drilling to date has successfully identified oxide mineralization with the potential to contribute to the Çöpler production profile. This mineralization has been identified in several prospects that can potentially be mined as a series of satellite open pits within 5km to 7km of the existing Çöpler Mine facilities. Preliminary metallurgical test work indicates that the mineralization style is similar to the Çöpler deposit and that any material mined can potentially be processed through the existing crushing and ag-

glomeration circuit and stacked on the existing heap leach pad facility at the Çöpler Mine.” Initial results from exploration drilling at Yakuplu North were provided in a press release dated December 9, 2015. Further drilling conducted between November 19 to December 31, 2015 has defined additional oxide mineralization. Based on the results to date, the Yakuplu North prospect is being aggressively advanced through the resource development stage in 2016. The mineralization style is similar to the Çöpler Deposit and may be processed through the existing crushing and agglomeration circuit and stacked on the existing heap leach pad facility at Çöpler Mine. Company also announced that the Board of Directors has approved full construc-

tion of the Çöpler Sulfide Project in a recent news release dated May, 2016. Rod Antal, Alacer’s President & Chief Executive Officer, stated, “The positive decision to proceed with the full construction of the Çöpler Sulfide Project represents a major milestone. The substantial amount of work completed provides the detailed support on which to base our investment decision and further validates our confidence in delivering long-term growth at highly attractive financial returns. The Project now represents an improved aftertax NPV of $728 million and will provide an after-tax IRR of 19.2% and a payback of less than 3 years from the start of sulfide gold production.” April 2016

Serving the Turkish Natural Resources Sector Geology - Mining Consulting & Engineering Our Services Evaluation of Resource and Reserve Data Deposit Modelling Exploration Geophysics Hydrogeology and Water Management Coal Mine Safety Gas Management in Coal Mines Greenfield Mine Planning and Development Mine Production Planning and Design Bankable Investment Studies (Scoping-, Pre- and Feasibility-) Due Diligence Competent Person‘s / Mineral Expert‘s Reports Safety and Operational Training DMT Group Tel +90 538 829 60 17 (Turkey) Tel +49 201 172-1507 (Mining) · consulting@dmt-group.com Tel +49 201 172-1917 (Geology) · exploration@dmt-group.com

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Deputy Minister Alaboyun Updated on Coal Mining Law Mineral and energy potentials, sources and their benefits for Turkey and regional development are discussed in; EastSouth East Anatolian Energy Resources and Regional Development Conference at Directorate of Mineral Research and Exploration (MTA). Deputy Energy and Natural Resources Minister Ali Rıza Alaboyun joined opening ceremony and stated South-East Region of Turkey is essential to country’s energy production plans. Region has potential to contribute 70% of hydroelectricity and region contributes Turkey’s 95% of petroleum production. Alaboyun shared latest coal news. Alaboyun said’’ Renewable energy isn’t a solution to everything. 12 years ago total energy production potential was 32,000 mV. Today it has reached 73.000 mV and until 2023 we plan to increase our production capacity to 120.000 mV therefore

we need $110 billion for investment. We have large amount of coal potential in our country. Also we will continue our renewable energy development. We aren’t against renewable energy on the contrary we support it but renewable energy isn’t key to everything. ‘’ Alaboyun refers to foreign energy resource dependency and said; ’’Due to last crisis we experienced, we decided new road plan to provide most of our energy from coal therefore we want to use our local coal sources and provide our energy from local sources’’ Deputy Minister Alaboyun mentioned about local coal projects, ‘’Natural gas is rather reachable in these days. We produce 48% of our energy from natural gas. Despite Russia has more sources, they don’t use natural gas as the main source of electricity production thus we need to create alternative energy

sources. Çayırhan 2 Coal Basin is ready in all respects and we want to initiate tender for basin in this year. Further drilling on our other fields continues and we will evaluate our plans later on‘’ Alaboyun also stated; ‘’We are working on new law about coal mining. First example was at USA. After major accident at West Virginia in 1968, Coal law has enacted. Law was mostly about mining licenses and didn’t contain occupational health and safety systems. Law which we currently evaluate, will be mostly about occupational health and safety system. Although our priority is occupational health and safety, we have other projects like drainage of methane gas from mines. Methane drainage will be an obligation. We will get rid of methane gas in mines and redound it to economy.’’ March 2016

Embassy of Czech Republic Organized a Business Summit for Collaboration in Coal Mining

The Embassy of Czech Republic in Ankara in cooperation with Ministry of Energy and Natural Resources General Directorate of Mines Division (MİGEM) and Coal Producers Association (KÖMÜRDER) organized a one day meeting in Ankara. Participants representing Turkey were MİGEM, Turkish Coal Enterprises (TKİ), Turkish Hardcoal Enterprises (TTK), Electricity Production and The Disaster and Emergency Management Authority (AFAD) together with private companies. Participants representing Czech Republic were Czech Mining Authority (CMA), Mining Rescue Services (HBZS) and

Spring 2016

Czech Extraction and Mining Association (CDT) and ten other private companies. The meeting held at the MİGEM hall in the morning mainly covered by the introductory presentations of MİGEM and guest companies. In the afternoon, workshop and business to business

meetings are carried at Swiss Hotel. The Embassy of Czech Republic Ankara Undersecretary of Commerce Erik Siegl made the following statement regarding the organization; “We are very thankfull to the MİGEM and KÖMÜRDER for their excellent cooperation and openness. We see this seminar as a starting point of our more intensive cooperation with the Turkish authorities and companies in the area of spontaneous combustions’ prevention, degasation and various mine design activities. Our Embassy is ready to assist anybody interested in taking part in such an exchange.” June 2016

TÜDEMSAŞ Developed a New Ore Wagon TÜDEMSAŞ (Turkish Railways Machines Industry Inc.) with its experienced staff and strong background in production is one of the strongest industrial corporations in the region of MiddleEast and Balkans. In recent years TÜDEMSAŞ is playing a major role in Turkish railways industry with the recently developed modern freight wagons. The company carefully continues the testing procedures for the recently developed Talns type ore wagon. The mass production of the new gen-

eration covered/hopper ore wagon will start after the completion of test procedures under Technical Specifications and Interoperability (EU-TSI) standards. The static breaking and road performance tests are completed for the Talns ore wagon and between Sivas main and Ulaş stations; 120 km per hour speed is recorded. The road test results for speeding and the breaking distance are analyzed by a team of TÜDEMSAŞ engineers, Turkish State Railways (TCDD) specialists and the contractor company executives. The road

test results were reported to be positive. After completing the test procedures in Sivas, Talns ore wagon reached to Eskişehir in order to complete the remaining test procedures. A team from İstanbul Technical University will carry out the remaining tests and with the positive results mass production of the Talns ore wagon will start. It is planned that for the years 2016 and 2017 there are 300 wagons planned for production for Turkish State Railways (TCDD). March 2016

MNG Gold Takes 55% of Aureus Mining Liberia-based gold miner Aureus Mining Inc announced to hand majority control to Turkish conglomerate MNG through a US$30 Million share subscription. Current chief executive David Reading will stand down, with a new management team from MNG appointed comprising Serhan Umurhan as chief executive and Geoff Eyre as chief financial officer. Aureus built the New Liberty mine in Liberia. The money from MNG will allow New Liberty to resume production, expected this month. David Netherway, Aureus’s chairman said the operational issues and plant suspen-

sion had added to the financial pressures faced by the company. “MNG Gold has strong financial backing, operational experience and is an existing operator in Liberia. This transaction will recapitalise the company and places it in a much stronger position to move forward, ”he said. Serhan Umurhan, who is general manager of MNG Gold, added: “New Liberty is an attractive opportunity to add high quality ounces to our West African mining portfolio. We see significant growth potential for New Liberty, supported by our strong financial position, global mining expertise and synergies with

our other Liberian operation.” MNG Gold, the Turkish gold exploration and development company announced earlier from the social media that the advancement in construction of its Kokoya gold mine in Liberia, West Africa. Once completed this will become the first Turkish owned world standard commercial gold mine to operate outside of Turkey according to the statement. Commissioning of the processing plant is announced to be progressing on schedule with the first gold pour planned for 2016. June 2016

No Change in the Ministry of Energy and Natural Resources in the 65th Government 64th Government was approved by President of Republic Recep Tayyip Erdoğan in October 2015. Berat Albayrak selected as Energy and Natural Resources Minister and did not change in the recently announced 65th government Former Energy and Natural Resources Minister Ali Rıza Alaboyun is entrusted with the task of deputy Energy and Natural Resources Minister. Alaboyun was entrusted with Ministry before October the 1st election in provisional government. Ali Rıza Alaboyun served as Member of

Parliament in Adalet ve Kalkınma Party (AKP) for 3 period. According to internal regulation of AKP, he stayed out of Parliament and give his place to Berat Albayrak in 64th government. Alaboyun will serve as deputy Minister in Energy and Natural Resources Minister, one of important ministries in Turkey Dr. Berat Albayrak He was born in 1978 at İstanbul. Berat Albayrak graduated from Istanbul University’s department of business. He got postgraduate education on finance at New York Pace University. He earned his doc-

torate in Finance and Banking programs. His doctoral thesis entitled “Financing of Renewable Energy Resources”. May 2016

Spring 2016

Mustafa Vehbi Koç Died Mustafa Vehbi Koç died in İstanbul after a heart attack at the age of 55. He was the Member of Board in Demir Export AŞ, one of the leading companies in Turkish mining sector and Chairman of Koç Holding being the first holding in Turkey. January 2016

Execution of Controversial Circular of Prime Ministry is Canceled 8th Department of State Council has decided; ‘In accordance with the relevant regulations, jurisdiction of mining licenses belong to Energy and Natural Resources Ministry. All sorts of restriction on mining business can be done by law’’. The decision also includes; ‘’General Directorate of Mining Affairs

is responsible with arranging mining licenses. Necessary Information, documents and permissions for arranging mining license stated clearly on laws concerning mining and Prime Ministry’s permission isn’t necessary. Circular in dispute includes restrictive clause about mining regulations and notice is

against to current Mining Law.’’ Defendants Prime Ministry and Energy and Natural Resources Ministry have right to object to decision. Objection will be discussed by council of state’s Plenary Session of The Chambers for Administrative Cases. January 2016

Sandstorm Acquired Royalties from 11 Projects in Turkey

Sandstorm Gold Ltd. announced in a news release dated January 19, 2016; that it has agreed to acquire 56 royalties (the “Royalty Package”) from Teck Resources Limited and its affiliates (collectively, “Teck”) for total consideration of US$22 million (C$32 million), payable in US$1.4 million (C$2 million) in cash and US$20.6 million (C$30 million) in common shares of the Company. The Royalty Portfolio includes the following key assets from Turkey;

Spring 2016

• 2.0% net smelter returns (“NSR”) royalty on the high-grade, advanced exploration-stage Hot Maden project located in Turkey, owned by Mariana Resources Ltd. (“Mariana”). Lidya Madencilik Sanayi ve Ticaret A.S. has an option to earn-in up to 70% in Hot Maden from Mariana; • 2.0% NSR royalty on the development-stage Burhaniye project in Turkey owned by Tumad Madencilik Sanayi ve Ticaret A.S. The Burhaniye royalty begins paying after 300,000 ounces have been produced; • US$10/ounce production royalty, subject to a maximum ounce cap, on the development-stage Ağı Dağı/Kirazli projects in Turkey owned by Alamos Gold Inc. and payable by Newmont; and • 0.5%-1.5% NSR royalty, based on cumulative production, on the development stage Öksüt project in Turkey owned by Centerra Gold Inc. (“Centerra”). Centerra holds a right of first offer on the sale of the Öksüt royalty. Below is a list of the other assets from

Turkey that are included in the Royalty Package. Other projects included in the package are from Canada, Mexico, USA, Brazil, Peru, Chile and Sweeden. • Altıntepe project-1.5% NSR • Karaağaç project-1.5% NSR • Taç/Çorak project-1.05%-2.0% NSR • Red Rabbit project-2.0% NSR • Hasandağı project-2.0% NSR • Muratdağı project-2.0% NSR • Tombul project - 2.0% NSR “The acquisition of this royalty package from Teck materially enhances Sandstorm’s existing portfolio while allowing the Company to maintain a strong balance sheet,” said Sandstorm’s President & CEO Nolan Watson. “We believe this deal enhances, on a per share basis, the Company’s production growth, cash flow growth, NAV, diversification and precious metal optionality. With over 130 streams and royalties now in our portfolio, we believe Sandstorm is well positioned for an exciting future.” January 2016

Eti Copper Released a Statement About Cerrattepe Eti Copper Inc. announced installation of a rope railway for Cerattepe Copper Mine. Rope railway will minimize environmental impact by not carrying ore by highway. Company stated; ‘’Mining licenses are legally transferred by Özaltın Construction. Eti Copper will continue business according to the royalty agreement.’’ Company stated; ’’Mine will be closed pit. Operation area will be in underground. After copper ore is carried by rope railway to Zelosman Loading Station, Ore will be trans-

ported to flotation facility at Murgul. Any road won’t be used for transportation of ore therefore Removal of trees is not necessary ‘’. ‘’Water sources are at slopes of Genya Mountain. Mine is not directly related with surface water sources. Underground water will be purified then discharged. Project is a Copper Mine Project and there will be no other plant in Cerattepe. There won’t be enrichment process therefore cyanide pool or tailings dam won’t be constructed.’’ Company also stated;’’ There is no risk

of landslide and it’s proven by scientific reports. 227 people will be employed in the mine. Requirements like cement, oil, spare parts will be supplied from Artvin and local construction business will be supported.’’ Shortcomings in first EIA report were inspected by 12 experts. According to taken remarks and technical reports, necessary improvements were made and Second EIA report was obtained. There is no stay of execution or cancelling decision about the process. February 2016

Exploitation Permit Granted for Eagle Field in Mihalıçcık Finnish chrome ore producer Afarak Group Plc announced that its Turkish subsidiary Türk Maadin Şirketi AŞ (TMS) has been granted the exploitation mining license for Eskişehir-Mihalıçcık Karaağaç “Eagle Field”. TMS is a Turkish mining company specialized in the mining industry of high grade chrome ore. TMS operates in three provinces in Turkey and in total 19 chrome ore concessions. TMS processes run of mine chrome ore into High Grade concentrate and Lumpy Chrome ore. The High grade concentrate is delivered to Elektrowerk Weis-

weiler GmbH in Germany, another wholly owned subsidiary of the Company, where the Chrome ore concentrate gets further processed into Low Carbon and Ultra Low Carbon ferrochrome whereas the Lumpy Chrome ore is sold to third parties. The annual production of TMS concentrate is about 50.000 tons chrome ore concentrate with an average percentage of chrome oxide of about 50%. TMS will now investigate the most appropriate time to bring the mine into production to ensure that the Company maximizes the selling price in a chal-

lenging trading environment. Company founded under the name of Ottoman-Germany Maadin Şirketi in March 1918. Company name changed in 1919 to Osmanlı Maadin Şirketi and for 30 years produced 200.000 tonnes of chromite ore from its Dağardı mine in Bursa Orhaneli. Following the establishment of Turkish Republic in 1923, the company changed its name to Türk Maadin Şirketi. Today the company has operational mines in Eskişehir-Mihalıçcık, Muğla-Fethiye and Denizli-Beyağaç. January 2016

Madencilik Türkiye (in Turkish) and Mining Turkey (in English) magazines are

Cover Story www.miningturkeymag.com

To be the Deepest Underground Lignite Mine in Turkey: Polyak Eynez

Polyak Eynez Coal Mining Company is an affiliate of Fina Energy Holding with 70% partnership and it is the first operation of the Fina Energy in the mining sector. Polyak Eynez develops an underground mining project on its own licensed coal mine sites. Polyak Eynez Mine Site is located in KÄąnÄąk, adjacent to Soma coal basin which is the highest quality lignite site in Turkey. The resource and potential of the mine site is estimated as nearly 250 million tons at 3,750 kCal/kg aver-

Spring 2016

age calorific value. A considerable part of the coal resources has 4,500-5,500 kCal/kg calorific value and is suitable for domestic heating and industrial use. The coal is also a substitute for imported coal with <1 % sulphur content. Polyak Eynez has announced a resource report in accordance with JORC Code in 2015. Polyak Eynez Mining Project is an underground mine consisting of one inclined drift and two vertical shafts. The inclined drift is 3,500 m having -14-degrees slope whereas vertical shafts are 800 m long vertically with 8 m diameter. The construction has started in

September 2014 for the inclined drift and in March 2016 for two vertical shafts. The annual production capacity is planned to be 5 million tons and the infrastructure will be adequate for 8.5 million tons/year capacity. Production is planned to commence in 2018. Polyak Eynez will become the deepest operating underground lignite mine in Turkey. The Polyak Eynez project team is currently preparing plans to mitigate the core risks associated with spontaneous combustion, coal burst, inrush and fires & explosions. Pro-active risk mitigation of spontaneous combustion will be managed jointly by the installation of a tube-bundle gas monitoring system and injecting inert nitrogen gas in to mined-out areas. The Polyak Eynez Project team consists of a diverse team of Turkish, Australian and German mining professionals sharing best technologies and mining practices. It is the Polyak Eynez vision to be not only the safest underground coal in Turkey, but also the most productive by highest health&safety standards, sustainable growth with employment, technology driven low-cost mining methods such as LTTC (Long-wall topcoal caving).

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Dama Engineering is Eleven Years Old DAMA Engineering was incorporated in June 2005 with the objective to establish an Independent Engineering Company operating within international standards. Ever since its incorporation DAMA has adhered to such principle and matured to its current level. Today, DAMA is truly an international Mining Services company providing a range of services including mineral exploration, mineral Resource/Reserve estimation, mine planning, process development, scoping-prefeasibility-feasibility studies, EPC/M works, appraisals, qualified person reports, and more. DAMA has business partners such as Kappes Cassiday & Associates in RenoUSA for gold processing and Bomenco in Canada for base metals and rareearth minerals extraction. Its mining consulting team consists of 12 professionals and 6 support personnel skilled and experienced in various disciplines from surveying, geology, mining and metallurgical engineering to project financing to help forward the projects from early development phase to production. In addition DAMA has a large National and International networking with professionals in the fields of geotechniques, hydrogeology, geophysics, project financing and risk assessment. DAMA has in house QP as well as association with national and international professionals with QP/CP/

PE certificates from reputable organisations. Therefore, DAMA has full capacity to prepare reports for submission to stock-exchanges, financial institutions and banks.

Geology and Exploration

DAMAâ&#x20AC;&#x2122;s team of exploration geologists has extensive experience both in Turkey and abroad, developing exploration targets for our clients. DAMAâ&#x20AC;&#x2122;s exploration services include exploration planning and implementation, project management or consulting and auditing, covering all exploration sequences from prospect generations to advanced exploration evaluations. By using advanced geological modelling techniques, our team can tailor project specific solutions in your exploration problems. DAMAâ&#x20AC;&#x2122;s experts are able to provide the new perspectives to your exploration projects by verifying the accuracy of your findings, which help to add to investor confidence, and reduce the investor risks.

Mineral Resources/Reserves Estimation and Reporting

DAMA is a mineral resource consulting firm with a team of professionals, Qualified Persons and Professional Engineers (QP/PE) both in house and associates from USA and UK who can conduct Independent Mineral Resources and Reserves Estimates in compliance with both the Canadian National Instrument (NI 43-101) and JORC codes. DAMA has demonstrated experience in conducting numerous resource/reserves estimations for Coal and non-coal commodities.

Mining, Process Engineering and Economic Evaluations

DAMA is fully competent in conducting from representative sampling programs to designing ore testing programs, mine planning, technology development, processing plants and conducting EPC/M works. Processes such as heap-leach and tank leach for gold, flotation for copper-lead-zinc, gravity separation for chromium, mag-

Spring 2016

netic separation and gravity separation for iron ore, HMS for magnesite, fluorite and coal are the areas DAMA has experience to design and provide EPC/M services for construction and operation. The computer simulated PROCESS OPTIMISATION, a new advanced tool that has been developed in Northern Americas in the last decades is now utilised by DAMA experts to improve the technical and economic performance of the existing plants. DAMA guarantees minimum 15% up to 150% improvement in total performance of any plant in Turkey. DAMA has been conducting scoping, pre-feasibility and feasibility studies, utilizing its well experienced specialists in technical analysis (mineral resources/ reserves, mine engineering, mineral processing), cost estimation, environmental and legal analysis, project economics and financial analysis. We perform mining industry standard studies in order to help investors in investment decisions. Our mining professionals are experienced with underground and surface mines, and quarries for coal and metallic minerals.

Unmanned Aerial Vehicle (UAV)

Following the 2 years of development program utilising the necessary software and training skilled personnel, DAMA used its drones (also known as unmanned aerial vehicles or UAVs) for precise topographical and geological mapping (lithology, alteration and structural) at large scales, mapping of open pits and landfills, and monitoring angle of slopes in relation to land-slide risks and mine reclamation works. www.dama-engineering.com

The premier coal laboratory group

Profile ALS Coal is the leading global coal-focused laboratory group with a geographically and technically

diverse service offering. ALS Coal delivers quality technical outcomes supported by a highly skilled and motivated management team, well-trained technical staff, a commitment to capital investment for ongoing improvement of technical services and a total commitment to client service.

www.miningturkeymag.com

Company Overview-ALS Limited & ALS Coal Services

These components position ALS to provide superior analytical outcomes for our clientele.

ALS is one of the worldâ&#x20AC;&#x2122;s most successful analytical testing companies As one of the worldâ&#x20AC;&#x2122;s largest and most diversified Testing, Inspection and Certification (TIC) companies , ALS has sites strategically located around the world to provide accurate and timely services. We have operations in more than 400 locations, in 65 countries, and on six continents.

Extensive Services

ALS COAL

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us to truly understand the industry, enWe have teams of experts around the couraging innovation and an entrepreworld available to provide specialised neurial spirit that creates strong links bebusiness solutions that align with cliandlo-exploration Services, tween our global business operations. ent needs. Major hub Borecore facilities are We are focused on delivering superior cated in Australia, Asia,Superintending North America, & Certification Services, services through four main divisions: Life South America, Europe, the Middle Coalfield production Services, Sciences (Environmental, Water ResourcEast and Africa. es, Monitoring Our company can trace its origins to Coalfield environmental Services,and Technical Services (MATS), Food, Pharmaceutical, Consumer 1863 when Peter Morrison Campbell Coal preparation Services, Products and Electronics); Minerals (Geofirst established a soap making busi- plant chemistry, ness in Queensland, Australia. After listCoal Combustion Services, Metallurgy, Mine Site and Inspection); Energy (Coal and Oil & Gas); ing on the Australian Stock exchange in Services, and Industrial (Asset Care and Tribology); 1952, the modern era Coal of theCarbonisation company and began in 1981 with Coal the acquisition training Services,offering and a broad range of technical services to our clients that is unrivalled. of Australian Laboratory Services Pty Consulting Services. www.alsglobal.com Ltd and a shift to becoming a highly regarded international testing, inspection and certification company employing in excess of 12,000 staff. Irrespective of our size, we have always retained a uniqueness that has allowed

Coal Services & Capabilities alsglobal.com/coal

KNOW YOUR COAL. MANAGE QUALITY. CAPTURE VALUE. Laboratory testing and analytical solutions for every stage of your coal chain.

Right Solutions Â· Right Partner

Profile www.miningturkeymag.com

RungePincockMinarco Solidifies Presence in Turkey Together with ARDEF MINE MACHINERY ENERGY & TRADING INC.

Philippe Baudry Executive General Manager-Advisory Services RungePincockMinarco Ltd

RungePincockMinarco (RPM), founded in 1968, is an ASX listed company and global leader in the provision of advisory consulting, technology and professional development solutions to the mining industry with expertise achieved through our work in over 118 countries. We operate offices in 18 locations across 12 countries on five continents. Together with RPM’s advisory, technology and professional development businesses, RPM also encompasses GeoGas – a wholly-owned subsidiary of RPM. GeoGas which has over 20 years of experience in coal seam gas content testing and reporting services, and has one of the most comprehensive gas testing databases globally. GeoGAS is known for its accurate and reliable results and has completed over 25,000 gas content tests which help underground coal mines operate safely and efficiently. Through delivering services to our customers – mining companies and financial services industry – as well

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as active engagement in key industry bodies and strategic partners – RPM demonstrates its commitment across the entire mining value chain. In August of 2015, RPM announced a strategic alliance with ARDEF Mine Machinery Energy & Trading Corporation (ARDEF) to further solidify RPM’s reach in the Turkish mining region. ARDEF’s founders have over 20 years of experience in the Turkish Mining Sector providing management, engineering, sales services, technology and advisory solutions for mining companies throughout Turkey. Together with RPM’s global software and advisory teams, ARDEF provides software and advisory solutions to customers to meet the rising energy demands across the region. In the past few months we have seen an increasing interest from both private and governmental coal companies in Turkey for resource and reserve studies to be completed to International Standards such as JORC or NI 43-101. This, in RPM’s opinion, is a great step forward for the industry and will provide investors with increased confidence to invest in projects in Turkey. Based on RPM’s experience, the ‘2012 Australasian Joint Ore Reserves Committee’ (JORC) combined with the recently updated ‘Australian Guidelines For The Estimation And Classification Of Coal Resources 2014 Edition’ and the ‘VALMIN Code 2015 Edition’, provides one of the most comprehensive set of guidelines for the estimation and valuation of Coal Resources and Coal Reserves. RPM’s coal advisory team includes over

50 specialists with capability across the whole mining value chain from geology to mining and processing. A large majority of our staff meet the requirements for either Qualified and/or Competent Persons under the most commonly used International Resource and Reserve Reporting Codes (JORC and NI 43-101) and have worked on international standard projects globally. Working in many of the world’s mining regions, RPM are often called upon by either project owners or their investors to prepare reports to international standards such as JORC. These reports assist with capital raising activity either through debt or equity. Such reports are rapidly becoming the default standard for financiers accompanied by quality mining studies (see: RPM Perspective on minimum mining study). Our ability to provide these studies in a timely fashion and to the highest standards anywhere in the world is second to none. Through this work we have developed long standing working relationships with some of Asia’s largest coal investment groups in China, Korea and Japan. RPM’s approach is to optimise the mine plan and methods to minimise the coal supply cost while achieving quality specifications in mine-mouth power operations. Our depth of advisory knowledge combined with our innovative software tools has enabled RPM to advise on mine-mouth power advisory projects in many Global jurisdictions where private organizations and governments are expanding or increasing the efficiency of mine mouth coal fired power production. This includes: • Indonesia-SUMSEL Power Plant Project, Jambi Power Plant Project, SKS Central Kalimantan;

• Australia-Milmerran, Tarong, Hazelwood, Kogan Creek, Wilpinjong, Mandalong, Callide, Premier Coal, Griffin Coal, Leigh Creek; • Laos-Xekong Power Project; • South Africa-Multiple projects for Sasol and BECSA projects including Limpopo West and other confidential projects; • Thailand-Mae Moh Mine; • India-Sarshatali Mine; • Mongolia-Baganur, Sharon Gol; • Turkey-Koyunağılı Lignite Project, Konya Ilgın Project; • Bangladesh-Phulbari and Barapakuria. These are part of more than 4000 open cut coal and 800 underground coal projects in 24 countries during our corporate history. With the rise of energy demands resulting in the emergence of mine-mouth power plants supplied by both underground and open cut operations across Turkey; RPM is driven to continue to embed global expertise for both mining contractors and power plant proprietors. Acting for either the mining contractor or the power plant proprietor, RPM believes it is imperative that both parties work towards common goals of maintaining:

• Uninterrupted coal supply at the contract rate; • Coal quality within specification; and • Coal cost at the contract rate. Mine-mouth power plants provide a platform for successful and cost effective power generation, however, must be executed and run efficiently. Successful running of mine-mouth power plants calls for a clear understanding of the key factors driving the success of the coal supply business and of the power generation business. RPM advisors partner with clients and share our world-class capabilities to achieve excellence through unlocking hidden potential from mine-mouth operations across the globe. RPM expert advisors have identified a formula for success for both contractors and power plant proprietors alike and continue to deliver expertise and support from basic expertise to life of mine maintenance models. The integration of RPM’s technology and advisory services is a critical element in gaining greater certainty in identifying consistent and continuous supply at the lowest operating cost possible for RPM’s clients across the

Madencilik Türkiye (in Turkish) and Mining Turkey (in English) magazines are

“Our country has a large exploration and mining potential. Today’s volatile commodity markets present challenges for miners. Actually, the challenge is on safely maximizing the profitability or margins of the company, asset or the deposit. If one cannot change the type of the asset or the deposit then the way of doing business should be changed. RPM and ARDEF Executive team has focused on for long term performance in Turkey and ready to consult on the valuation and presentation of our country’s mining assets with global standarts.” Aykan Daşkın Chairman ARDEF

globe no matter what mining method or commodity. RPM’s Open Cut Coal Solution (OCCS) and Underground Coal Solutions (UGCS) have been used on a variety of projects throughout Turkey. The OCCS & UGCS are the only mine scheduling software solutions in the world that are built exclusively for strip coal mines operated by dragline and/ or truck and shovel and underground coal mines. RPM are undisputed market leaders of open cut and underground coal scheduling with the industry’s largest install base in underground coal mines globally. These technology elements remain at the core of RPM’s technical advisory services. RPM’s advisory business is also a global leader in the provision of investor services with expert consultants equipped with dynamic industry experience. Beyond recent mine-mouth experience, RPM offers a wide range of advisory services ranging from Geology and Exploration to Project Funding expertise with key experience in Coal and Metals markets. Through our core Global Advisory capability across our 18 global offices, RPM is able to provide strong representation to the world’s emerging resource markets and apply the highly respected Australian standards and ethics to the work undertaken in these markets. We are proud that our work underpins and provides confidence to investment, project development and operational activity in Australia and Internationally.

Spring 2016

Some examples of recent projects include: • Actively working on 8 JORC compliance projects globally (Laos, Indonesia, India, Mongolia, Australia) on behalf of both project financiers and operators; • Preparation of the Competent Persons Report on Illawarra Coal for the South32 Demerger from BHPB; • Joint partnership with CSIRO to bring new gas testing capability to India; • Bylong: A new NSW Opencut and Underground Coal Project. RPM has been involved the KEPCO Bylong Study for more than 2 years enabling them to improve the environmental footprint of operations, reduce project capital and operating costs and increase the level of project confidence. RPM’s Advisory team continues to innovate and develop enduring solutions

for our clients and the industry through partnering with our software business to deliver faster and superior results which consider multiple scenarios ahead of selecting the preferred option to ensure the highest return on investment. We believe our clients require advisory services that are tailored to their specific needs. Working in partnership with our software business, we ensure our findings are accurate, reliable and present absolute best-practice scenarios and solutions for our clients. Every job we complete is supported by comprehensive reporting that addresses the key questions that management, investors and other key stakeholders want answers to. We don’t just prepare your reports and walk away - we are a life of mine partner, contributing value now and into the future. Whilst there are many challenges facing Turkey at this time, there is no doubt a strategic push by the government to grow the local power generation capacity of Turkey and ensure that domestic supply of this energy is assured. This is in part driving the development of some of the large coal basins such as the Alpu and Karapınar coal fields. To safely and economically extract some of these deeper resources, Turkey’s mining industry will need to continue to modernize its approaches and adopt practices from around the world. We see this as an exciting time for groups like RPM and working closely with our partner ARDEF, we look forward to the coming years in Turkey. www.ardef.com

Interview www.miningturkeymag.com

KÖMÜRDER, Addresses the Need and Support for Reforms in Coal Mining We found a chance to make an interview with Muzaffer Polat, President of Coal Producers Association. In this interview, we raised key questions about coal mining industry in Turkey and the vision of the newly established Association within.

Could you tell us about the position of Kömürder in the sector? Muzaffer Polat: KÖMÜRDER is a nongovernmental organization which is organized and established by local coal producers and the investors of thermal power plant based on coal in early 2015 due to the need for a non-governmental organization which would represent the coal sector after Soma mine-accident and deal with public opinion. Our country pioneers the development of coal mining, mining at global standards by creating high efficiency and high added value principally in occupational health and safety, the reduction of foreign dependency and local development with the enterprises suited across the whole country. Therefore we make an endeavor to ensure that the incentives needed to survive the coal mining which can’t take a stand against cheap import coal are provided and to explain the future benefits of such incentives for our national economy. Guarantee of purchase to be given to thermal power plants based on local coal will eliminate the foreign dependency of our country in energy and ensure that social welfare will be increased with the employment and added value to be created within the country.

Spring 2016

What are your solution suggestions to pave the way for the sector? Coal sector in our country is incapable of competing with the falling import coal price in parallel with the decrease in the commodity prices in the world. Additionally, considering the effect of the thermal power plants based on import coal to increase the foreign dependency in energy, a serious need for supporting the coal mining arises. Salaries are applied as two times more than the minimum wage for personnel working in underground coal operations. Such increase in personnel costs has placed a burden which can’t be lifted by the employer in our country where productivity rates are being relatively low and hence many business places had to stop its operations. A minimum wage support has started to be provided, which will be applied as from the early 2016. Whereas high personnel costs in underground operations, high fuel costs are affecting negatively the open pit operations. Exemption for Special Consumption Tax (ÖTV) as a new implementation reduces the costs on the one hand and accelerates coal mining by increasing productivity on the other hand. Support given to the thermal power plants based on local coal will be the most important aid to cause a tendency towards local sources in energy and will also help to reduce the foreign dependency in our energy resources. License and permission regulations are very complicated in coal mining and power plant investments and cause dif-

Muzaffer Polat, President of KÖMÜRDER

ferent implications. This situation has constituted an obstacle for the investments needed mostly by our country. Implementation of same regulations in different ways has constituted another dilemma. It is necessary to reduce permission formalities and to ensure that all permissions are given by one authority. Our regulations related to occupational health and safety conform to western standards. To keep the inspectors responsible also at the occupational accidents during the audits performed by the inspectors of the Ministry of Labor and Social Security doesn’t compromise with the nature of business. Because audit is performed instantly and to keep him/her responsible for the situation to be encountered after 30 minutes or following one meter in underground causes inspector to feel under pressure. Following this implementation number

of the operations being closed have increased and affected the national economy negatively. Criminal liability of the inspectors should be removed and this unfair application should be eliminated. With another application exercised newly, a penalty to restrict the freedom is imposed to the employer, in the event production has been found to be done at the non operating facilities. Employer gets prison sentence for transporting the ore produced by earlier operation or arisen out during maintenance works. Such gap between crime and punishment should be removed. Should coal mining be performed at the point reached today in Turkey? Why it should be done? Of course it should be done. Moreover it should be done more than today by increasing its contributions to the national economy. Our country has never needed at this level of coal mining and electricity generated by the thermal power plants based on local coal. We have something to say also about coal mining and so called effects of ther-

mal power plants on public health. As a country we have a trace effect in the world for the emission of carbon gas of which has the most important effect among the greenhouse gases. Because Turkey causes only 0.95% of global carbon emission. Rate arising from the use of coal is 0.99%. 42% of global carbon emission is caused by China and USA. There is nothing to fear about the nega-

tive environmental effects and human health. Because technology is developed quickly in the sectors where coal is used as in every sector, latest coal technologies are implemented instantly here in our country. Environmental legislation in our country has been structured completely in accordance with the regulations of European Union and implemented more strictly than the many countries in the world. Our emission rates are not higher than EU countries. Even though filters are developed, where heavy metals are held and it is understood technologically that even carbon can be held, it is quite thoughtprovoking that environmental sensitivity has constituted an obstacle for investments. We can’t stay back from implementing sustainable development policies including sustainable life as in the whole world. Human and environment sensitive technologies have been used in our country as well. I think that a serious progress will be carried out so, if government and industrialists move forward together.

FROM DARKNESS

TO LIGHT

Kömür Üreticileri Derneği / Coal Producers Association Phone : (0312) 418 1849 - Fax : (0312) 418 1849 Address : Paris Cad. No: 4/4 Kavaklıdere Çankaya - Ankara info@komurder.org www.komurder.org

Profile www.miningturkeymag.com

MinenCo Mining Engineering Consultancy For the last 20 years, mining activities in Turkey have been diversified and accelerated. Correspondingly, new mine deposits have been discovered, new projects with various stages have been generated and the number of domestic and foreign investors has increased. Therewithal, the demand for internationally experienced independent companies which would guide domestic sector investment companies and support them for technical, administrative and financial requirements, increased evenly. For that reason, MinenCo was founded on March 9, 2016 with the experienced and assertive staff who can fulfil the sectoral demand. The aim of our company is to give technical and administrative support, especially to mining, geothermal energy and insurance companies, governmental institutions and investors, in fields of mineral exploration in line with the international standards (NI 43-101, JORC2012), resource/reserve studies, mine feasibility, engineering, plant design, permitting, health and safety, quality control, financial analyses. For this reason, we have internationally experienced engineers in mining sector who are competent with this sector in both Turkey and worldwide and who follow changes and technological innovations closely. Our activities under the mining business are grouped under two main headings. The first group is “Geological Studies” which includes exploration (gold, copper, lead, zinc, iron, tin, silver, molybdenum, nickel, chromium, and coal), project management, resource/reserve estimation, and database management. We prepare our reports in accordance with NI 43-101 or JORC with the signature of QP/CP if required. Additionally,

Spring 2016

Turkey Mining Sector Experts Meet in METU GEOE Career Fair.

we are also conducting IP, EM, MT, VES, Seismic (2D, 3D) studies with the geophysical equipment we have. Our second main group under the mining business is “Mining Studies”. These studies can be summarized as, plant design, engineering studies, mine planning, open pit design, plant optimization, flow-chart generation, generating solutions to the problems that may occur during the operation and bankable feasibility studies. We have a core team of highly skilled and experienced professionals. İlhan Poyraz has over 23 years of experience in the mining industry, especially in precious and base metal exploration, plant design, engineering, construction, plant operation, as a Geologist, Project Manager, General Manager, and Vice President Positions of international companies. During this period, he specialized in mineral exploration, mine operation, heap leach, tank leach, gravity gold mining plant design, engineering, feasibility, due diligence, valuation, and permitting at various regions fore mostly Turkey, Africa, Eastern Europe, and Central Asia. He also managed all discovery, feasibility and engineering period of Turkey-Erzincan-Çöpler Gold Mine (~8,5 Moz Heap Leach) and Sudan-Abu Sara Gold Mine

(~1 Moz Gravity&Tank Leach). This period also includes the company management, vendors’ relations, EPCM contractor management and all community and press relations as a top executive according the World Bank and IFC Standards. Cemal Kaya, business partner of MinenCo Engineering in Geophysics and Geothermal studies, has over 30 years of experience in geothermal and mining research and exploration. He worked at MTA (Mineral Research and Exploration Institute) in the mining and geothermal research projects. He was the President of Earth Crust Project of Turkey by using MT, gravity and seismological methods. He studied at the Cumhuriyet University as lecturer and academician between 2000 and 2009. Erdem Atalar, Project Manager of MinenCo Engineering, has over 10 years of experience in the mineral exploration, structural geology, resource estimation, project management, QA/QC, data management, Health and Safety, environment, remediation, procurement, logistics, finance, contracting and construction in different countries including Turkey, Sudan and Qatar. His expertise is vein type epithermal and mesothermal gold deposits, porphyry related gold deposits. www.minenco.com.tr

www.minenco.com.tr

Üsküp Cad. 16/24 Çankaya-ANKARA-TURKEY Telephone/Fax: +90 850 808 28 13 E-mail: info@minenco.com.tr

Article www.miningturkeymag.com

Coal Mining in Turkey and its Role in Energy Supply CONTACTS Halim Demirkan Mining Engineer, MSc KĂ&#x2013;MĂ&#x153;RDER Secretary-General komurder@gmail.com

According to some people coal is a material which pollutes the environment, poisons around when it is used maliciously in energy generation at power plants and furthermore increases greenhouse gas emission and carbon emission. Moreover for production, deforestation, environmental impact and,tens of people who passed away at occupational accidents should also be noted. Actually it is completely a contradiction in terms. Whilst forest area destroyed for mines are stated in millesimal, double-digit figures given for road and construction works by percentage are being ignored and coal becomes an undesired raw material for energy. Place of Turkey in global coal sector was tried to be determined in this study which intended to show where Turkey takes place generally across the world in coal mining and electricity generation based on coal, its global power and/or status in the light of the vicious cycles into which Turkey goes through during the stages of availability and sustainability like foreign dependency in energy by 62% and great risk brought by it, security of supply, current deficit and loss of employment.

Coal

Coal is a combustible sedimentary rock which is made up of heterogeneous contents with different chemical and physical characteristics with the color ranging from brown to black. It is mainly made up of carbon, hydrogen and oxygen. It has sulphur and nitrogen as secondary elements. It completes its formation by going through physical and chemical changes under temperature, pressure and microbiological effects between

Spring 2016

other sedimentary rocks of plants and inorganic minerals for millions of years. It is also described as solid and combustible compositions which are observed as fossils today within geological formations of different ages that deposit as a result of dissolution and degradation of plants that once were alive.

Carbonization

It occurs with continuous sedimentation of peats (plant material) and decomposition under physical and chemical changes under sufficient pressure and temperature. Time of exposure to temperature and pressure effects is the most important factor affecting carbonization. Carbonization is geologically a low-level metamorphism and comprised of peat, lignite, bituminous coal and hard coal formation series. Carbonization is made up of biochemical and geochemical phases. Whereas biochemical phase causes plant residues to turn to peat in anaerobic environment, geochemical phase causes peat to turn to lignite and bituminous coal respectively and eventually to anthracite (hard coal) under sufficient pressure and temperature. As the degree of carbonization increases, volatile content and moisture decreases and calorific value increases.

Characteristics and Classification

Since coals form at different geological times, they are observed at different carbonization levels with varying organic and mineral content. Coal formations show variations prominently according to geological age of formation. Their chemical properties affect the industrial use of them. Coal is known to be made up of carbon (C), hydrogen (H), oxygen (O), nitrogen (N) and sulphur (S), water (moisture) and ash. As coal gets older it loses moisture. Coals are classified in two main categories in accordance with their carbonization degrees: low-rank and high-rank coals. Physical and chemical characteristics of coal are important factors in this

classification. Low-rank coals (lignite and sub-bituminous) are called also as brown coals and contain high moisture and high volatile substance. They are grey, soft and fragile. High-rank coals (bituminous and anthracite) are called as hard coals also and contain low moisture and low volatile content. They are black, hard, rigid and have vitreous luster. They are classified in four main categories: 1. Low Rank (brown) Coals: These are non coking coals. They are used in electricity generation 2.1. Hard coal: They are bituminous coals. They are divided in two categories as coking coal and steam coal. Steam coals cover sub-bituminous coal in some countries. Steam coals are used mainly in heating and electricity generation. 2.2. Anthracite: This group is of non coking coal type. It is used mostly in industry.

1. Global Reserves

According to the assessment of German Federal Institute for Geosciences and Natural Resources (BGR) values regarding global proven coal reserves are listed in Table 1. In this assessment all coals with heating value over 3.940 kcal/kg are considered as hard coals and sub-bituminous coal and anthracite are included. Coals with heating value lower than 3.940 kcal/kg are classified as lignite (brown coal). According to this table global hard coal reserve is totally 688 billion 456 million tons. Almost half of it pertains to USA and China. When India, Russian Federation and Australia following them on the table are added to it, 81% of global reserves are seen to be obtained. The said five countries are understood to have 81% of global anthracite reserves. Reserve figure of Turkey is seen to be 506 million tons on the table. Considering Turkeyâ&#x20AC;&#x2122;s over all anthracite reserve is thought to be 1 billion 309 million tons, lowness in the said value is understood to be caused by reserve classification and 800 million tons are understood to be taken as an probable reserve (Table 1).

Considering global lignite reserve, it is seen to be 279 billion 762 million tons. Russian Federation has 32% of the said reserve by itself. Australia and Germany follow this country. Total reserve of these three countries constitute 63% of global reserve with 175 billion tons. Turkey is at the lowest position with 2 billion tons. According to the data of Turkey total lignite reserve is 14 billion 490 million tons. Reserve description comes into play at this point and 12,5 billion tons is considered as an estimated reserve (Table.1). TABLE.1- GLOBAL PROVED COAL RESERVES (MILLION TONS ) Row

Hard coal

Lignite

USA

Country

223.435

30.555

China

120.697

7.350

India

81.897

4.755

Russia

69.634

90.730

Australia

62.095

44.164

Germany

Ukraine

32.039

40.300

Kazakhstan

25.605

2.336

Poland

15.890

4.971

Indonesia

13.511

9.002

South Africa

9.893

Serbia

7.112

New Zealand

6.750

Colombia

4.881

Canada

4.346

Vietnam

3.116

Mozambique

1.792

Brazil

1.547

Uzbekistan

1.375

Iran

1.203

Chile

1.181

Mongolia

1.170

Mexica

1.160

Turkey

506

Greece

2.236

5.049

2.055 2.876

Pakistan

2.857

Czech Republic

2.635

Hungary

2.633

Bosnia-Herzegovina

2.264

Bulgaria

Others

Total

2.174 11.483

6.958

688.456

279.762

2. Reserves in Turkey Turkey’s coal reserves are in contrast to global reserves. Its lignite reserves are more than anthracite reserves. Turkey’s anthracite reserves are located at the Zonguldak basin in the Black Sea Region of Turkey (Zonguldak District). All of the reserves are held by the General Directorate of the Turkish Hard Coal Enterprises (TTK). According to the data for

TABLE.2.1-HARD COAL 2015 as seen in the table, RESERVES IN TURKEY (TONS) total hard coal reserve is Reserves Non-Coking Semi-Coking Coking Total 1 billion 309 million tons. In Stock 400.060 1.763.675 6.493.293 8.657.028 406,2 million tons are Proved 169.268.317 6.874.821 330.326.837 506.469.975 Probable 115.052.000 15.859.636 294.043.000 424.954.636 non coking, 32,4 millions Possible 121.535.000 7.883.164 239.029.000 368.447.164 tons are semi-coking Total 406.255.377 32.381.296 869.892.130 1.308.528.803 and 870 million tons are coking type hard coals. TABLE.2.2-LIGNITE RESERVES IN TURKEY66%, 32% and 3% of the INSTITUTIONAL HOLDINGS reserves are respectively Institutions Proved Probable Possible Total coking, non-coking and 1 TKİ 3.459.764 157.333 18.451 3.635.548 semi-coking. Heating 2 EÜAŞ 7.448.657 133.706 2.964 7.585.327 3 MTA 1.207.484 5.629 1.213.113 values of hard coal re4 Private Sector 2.897.853 32.800 2.930.653 serves in the basin range Total 15.013.758 329.468 21.415 15.364.641 between 5.400 and 7.200 kcal/kg. 506 milHalf of the lignite reserves of our counlion tons of the reserve (39%) is proven try (7 billion 280 million tons) was deter(Table 2.1). TTK put 4% of the sites out to mined during the exploration efforts betender for coal production. tween 1976 and 1990. Coal discoveries Turkey’s lignite reserves spread throughare achieved through the studies made out the whole country. Since lignites are across the whole country between the young, they have high moisture and low years 2005 and 2014 due to the increase heating value. The said values are quite in foreign dependency in energy, risks in lower than the upper heating value desupply security and increase in current scribed in the relevant standards. Heatdeficit and a total of 7 billion 210 miling value range between 1.000 kcal/ lion tons were added to the reserves. 5 kg and 4.200 kcal/kg. Heating value of billion 705 million tons of it are carried almost half of them is below 1.500 kcal/ out in MTA’s sites and 1,5 billion tons of it kg. Coals with heating value under 2.500 are carried out in grounds held by other kcal/kg reach 80% of total value. public organizations. Lignite reserve of our country is 15 bilCoal Productions lion 365 million tons of which 329,5 mil1. Global Coal Production lion tons are proved, 21 million tons are Production values are calculated over probable and 15 billion 14 million tons not raw coal but marketable quantities. are possible (2015, MTA). 81,1% of these Data of Turkey are assessed in accorreserves (12.433.988.000 tons) are held dance with same criteria. As seen in Taby three public corporations. These are ble 3, global hard coal production beGeneral Directorate of Turkish Coal Encame 6 billion 276 million tons in 2013 terprises (TKİ), Electricity Generation and Brown coal production became 1,5 Company (Turkish: Elektrik Üretim A.Ş.; billion tons in the same year. Whereas EÜAŞ) and General Directorate of Mintotal coal production was 3 billion tons eral Research and Exploration (MTA). in 1971, it was seen to reach 7 billion MTA carries out research and explora823 million tons in 2013. Considering tion and doesn’t perform exploitation China produced 3,5 million tons by itand transfers its licenses to producer self in 2013, level of the increase in coal companies. Part of reserves which beproduction may be figured out. In 2013 long to private sector is 2 billion 931 China carried out 45% of global promillion tons and constitute 19% of toduction and 57% of global hard coal by tal amount. One third of them (581,45 itself (3,5 billion tons) (Table 3). million tones) are the sites assigned to There is a difference of 3 billion tons private sector by privatization. Public between China and India following it data for the studies carried on the sites (9%) in global hard coal production. of private sector other than MTA are Production of USA, third in hard coal not sufficient. They are estimated to be production is equivalent to only 12% over the said value (Table 2.2).

Spring 2016

COAL FIELDS WITH EXISTING AND PLANNED THERMAL POWER PLANTS IN TURKEY

TABLE.3-GLOBAL COAL PRODUCTION (2013-1000 TONS) Row

Country

Hard Coal

Brown Coal

China

India

568.095

44.679

612.774

USA

431.672

472.322

903.994

Australia

372.915

86.389

459.304

Russia

274.079

73.138

347.217

South Africa

255.851

Indonesia

269.648

Kazakhstan

114.645

Colombia

85.387

Poland

76.978

Ukraine

65.768

Vietnam

39.655

Canada

38.282

North Korea

27.942

Mongolia

22.282

United Kingdom

12.840

Czech Republic

8.594

40.385

48.979

Germany

8.260

182.696

190.956

Turkey

2.789

63.324

66.113

Greece

53.571

Serbia

39.558

Romania

24.724

Bulgaria

28.618

Thailand

17.591

Mexica

13.147

Bosna Herzegovina

12.568

Hungary

9.545

Kosovo

8.219

Others

39.931

60.678

100.609

6.276.333

1.546.596

7.822.929

TOTAL Note: Turkey’s value fixed.

3.560.720

Total

Spring 2016

3.560.720

255.851 218.969

488.617 114.645 85.387

65.849

142.827 65.768 39.655

30.626

68.908

of China’s production (6% of global production). Australia becomes fourth with 373 million tons (5,9%). Turkey’s hard coal production ranked last with 2,8 billion tons. When compared with Turkey’s reserve of 14,5 billion tons, It is possible to say that China is capable of producing a quantity as much as Turkey’s total reserve in about 4 years. China doesn’t take any place in the table of brown coal production (lignites are given within hard coal). USA producing 472 million tons of total production which is equivalent to 1 billion 547 million tons takes its place. USA carried our 31% of global brown coal production in 2013. Indonesia (14%) and Germany (11,8%) follows USA respectively with 219 million tons and 183 million tons. Turkey becomes sixth (63,3 million tons) in world ranking for brown coal production by following Australia and Russian Federation ( Table 3).

2. Coal Production in Turkey Turkey’s coal production is carried out on total 469 sites of which 293 openpit (25 public) and 176 underground (6 public) facilities. Totally 31 of them are operated by public organizations. Turkey’s coal production is shared by private sector and predominantly public sector. Whereas total coal production was 54 million tons in 2002, it became 90,9 million tons in 2009, 66 million 911 thousand tons in 2013 and reached to 77 million tons in 2014. Turkey’s hard coal production is carried out by TTK in Zonguldak. Raw coal production was 2 million 789 thousand tons in 2013 and 2,68 million tons in 2014. This value was recorded as 4,57 million tons in 1974 and 2,62 million tons of saleable coal in 2011 (Table 4). TTK gave only a part of production to private sector through royalty. Brown coal (lignite+asphaltite) is produced by public organizations, TKİ (electricity generation and heating) and EÜAŞ (electricity generation) and by private companies. Turkey’s total lignite production (including public sector) was 78 million tons in 2012, 63,3 million tons in 2013 and 74,34 million tons in 2014. This figure was 84,3 million tons in 2008.

Private sector’s production was 38 million 148 thousand tons in 2014. Coal production is given out by tender to private sector for the purpose of electricity generation. This is given as both production on its name and privatization. There are also power plants operated by EÜAŞ itself. This is discussed in details in the following sections of the report.

Turkey’s share in global consumption in 2013 was 1% with 84 million tons in total consumption, 0,4% in hard coal with 28 million tons and 3,7% in brown coal with 56 million tons (Table 5).

2. Coal Consumption in Turkey

Turkey’s hard coal consumption was 28,18 million tons in 2013. This value was 31,46 million in 2012. 11 million Coal Consumptions tons of hard coal was consumed in our 1. Global Coal Consumption country in 2001, reaching to 26 million Global coal consumption was totally 7 tons in 2007. Total usage areas are as billion 875 million tons in 2013; 6 billion follows; 41.8% in generating electricity, 368 million tons and 1,5 billion tons of 20,1% in, housing and services,,19,8% it were consumed respectively as hard in coking plants 9,8% in cement procoal and brown coal. As in production duction and 3,4% in iron and steels secChina carried out 61% of total hard tors (2013) (Table 4). coal consumption by itself. USA and InWhereas 75,65 million tons of brown dia were the closest countries in rankcoal (lignite+ asphaltite) was coning with respectively 843 million tons sumed in 2009, it decreased to 56 mil(10,7%) and 791 million tons (10%). The lion tons in 2013. The said value was difference in consumption rate with 45,5 million tons in 2004. According to other countries is very high. the data for 2013 it was used at most in electricity generation by TABLE.4-TURKEY’S COAL 85,4%. Remaining was used PRODUCTION-CONSUMPTION (2013-1000 TON) mainly for heating purposes. ROW

PRODUCTION

LIGNITE-ASPHALTITE

HARD COAL

CONSUMPTION

58.424

TOTAL

55.967

1.968

28.178

60.392

84.145

TABLE.5-Global Coal Consumption (2013-1000 TONS) Row

Country

Hard Coal

Brown Coal

3.880.592

Total

China

India

659.482

131.758

791.240

USA

358.956

483.926

842.882

South Africa

186.988

Japan

195.587

Russia

161.946

South Korea

124.599

Kazakhstan

82.409

Poland

78.725

Ukraine

75.865

United Kingdom

60.252

Germany

58.485

Taiwan

57.445

Turkey

28.178 35.411

3.880.592

72.850

65.751

234.796

144.476 75.865 60.252

182.537

241.022

55.967

84.145

85.919

121.330

57.445

Australia

Greece

53.084

Indonesia

62.186

Czech Republic

39.264

Serbia

40.115

Romania

25.417

Bulgaria

28.534

Canada

32.806

Thailand

19.103

Others

323.453

128.072

451.525

TOTAL

6.368.373

1.507.289

7.875.662

Spring 2016

Coal Trade 1.Global Coal Trade

Coal is produced in more than 50 countries and consumed in more than 70 countries. Because of this characteristic it has a significant place in global trade. Coals which are economic for marine transportation are dealt with at most in global trade. Since lignite is low-calorie and it is not economic for long-distance shipment, it is preferred to be used in the power plants located near the source. 20% and 60% of the coals in global trade are respectively coking coal and bituminous coal (classified as hard coal, excluding anthracite and coking coal) In steam coal (anthracite, other bituminous coal and sub-bituminous coal) there are two main markets; Atlantic Market (Western Europe) and Pacific Market (Japan,

Korea and Taiwan etc.). Because of their positions Russia and South Africa shuttle between two markets. 90% of global coal trade is made through marine transportation. According to the data of 2012, 887 million tons (78%) and 250 million tons (22%) of total global marine trade of 1,14 billion tons are respectively steam coal (78%) and coking coals (22%). Exportation: Whereas global coal exportation was 1,33 billion tons in 2013, it constitutes 16% of total global production. This shows that coal is consumed in the country where it is produced. According to the data of 2013, Australia and Indonesia leads the hard coal exportation respectively with 336,3 and 269,3 million tons. Russian Federation ranking as third and exports as much as half of Indonesia. Global brown coal exportation is only 176,7 million tons. 97% of it is constituted by bituminous coal. As being sub-bituminous coal, lignite does not takes place in international trade. Indonesia leads inarguably brown coal exportation by 89%. It carried out 89% of total exportation of 176,7 million tons in 2013 by itself (Table 6.1). TABLE.6.1- GLOBAL HARD COAL EXPORTATION (2013-1000 TONS) Row

Country

Exportation

Australia

336.302

Indonesia

269.328

Russia Federation

138.980

USA

95.367

Colombia

74.299

South Africa

72.382

Canada

36.470

Kazakhstan

Others

TOTAL

32.540 100.965

1.156.633

Importation: Total coal importation was 1,36 billion tons in 2013. 91% of importation is constituted by hard coal and remaining by brown coal. Even though China is an exporting country, it is the greatest importer also. It became leader with the importation of 341 million tons. Japan and South Korea follow it with 195,6 million tons and 124,7 million tons respectively. These three countries carried out 53% of total global hard coal importation of 1,25 billion tons in the same year (Table 6.2).

Turkey ranks eighth in the first fifteen countries in global hard coal importation with 27,75 million tons. Turkey carries out only 2,2% of global importation. TABLE.6.2- GLOBAL HARD COAL IMPORTATION (2013-1000 TON ) Row

COUNTRY

IMPORTATION

China

341.024

Japan

195.589

South Korea

124.705

India

92.867

Taiwan

57.445

Germany

50.440

United Kingdom

49.402

Turkey

27.747

Others

307.386

TOTAL

1.246.605

2. Coal Importation in Turkey Turkey, which was making production to meet the internal demand until 1981, started coal importation with respect to the development in industry. In 1987 internal production became capable of meeting only half of the demand. Coal importation exceeding 10 million tons in 1990s exceeded 20 million tons per annum in 2000s. Importation which was 27,2 million tons in 2013 became 30,14 million tons in 2014 and reached to 34,5 million in 2015. The aforementioned increase is caused by the rapid increase in the number of the power plants based on imported coal (Table 7). 11,35 (32,9%), 11,311 (32,79%), 2 (5,83%), 4,98(14,42%), 2,8 million tons (8%) and 175 thousand tons (0,5%) of global importation of 34,5 million in

TABLE.8-HARD COAL 2015 were made from IMPORTATION IN TURKEY respectively Colombia, (2015-TONS) Russian Federation, 2014 2015 Row COUNTRY QUANTITY RATIO QUANTITY RATIO USA, South Africa, Aus(Tons) (%) (Tons) (%) tralia and Ukraine. 94% 1 Colombia 9.404.547 31,20 11.350.548 32,90 of coal importation was Russia 2 8.651.381 28,71 11.311.068 32,79 Federation seen to be made from 3 USA 4.325.498 14,35 2.011.912 5,83 Colombia, Russia, USA, Republic of 4 3.985.473 13,22 4.975.663 14,42 South Africa South Africa and Aus5 Ukraine 2.023.592 6,71 174.854 0,51 tralia (Table 8). 6 Australia 632.132 2,10 2.792.141 8,09 International payments 7 Canada 491.793 1,63 504.464 1,46 which was 3 billion $ in 8 Others 623.571 2,07 1.379.031 4,00 2015 had been 3,2 billion, TOTAL 30.137.987 100,0 34.499.681 100,0 3,5 billion and 4,6 billion $ respectively in 2014, 2013 give priority to coal as a source in elecand 2012. Reason of the decrease in total tricity generation (Table 9). payments as long as quantity of importaConsidering these values on the basis tion increases is the rapid decrease in coal of countries we encounter with very prices. We should be ready up to the mointeresting data (Table 10). Kosovo has ment when they start to rise at the breakthe greatest rate in terms of the share ing point. Coal-Generated Energy of coal in electricity generation with Production 98,8%. Mongolia, China, Greece and Coal-Fired Electricity Generation Germany follow it with 95%, 75,8%, in the World 51% and 45,6%. According to the data According to the data of 2012 share for 2012 coal rate in Turkey is 28,4%. of coal in the global electric power It follows from this, that there is much generation was 40,3% on the average. progress to be made for Turkey in order Natural gas, hydraulic sources and nuto reach peer countries. clear power plants follow it with 22,4%, TABLE.9- GLOBAL ELECTRICITY 16,5% and 10,8% respectively. CoalGENERATION RATIO ON generated electric power is produced SOURCE BASIS (2012 ) by hard coal and brown coal. Shares Source Ratio in Electricity Source Production (%) of hard coal and brown coal are 77,6% Coal 40,29 and 20,8% respectively. Coal is underNatural Gas 22,41 stood to be the most important source Hydraulic Energy 16,51 Nuclear Energy 10,82 in electricity generation. Countries with Petroleum 4,96 high coal reserves are understood to

TABLE.7 (In Graphic)-HARD COAL IMPORTATION IN TURKEY (1000 TONS)

Solar/Wind

2,77

Biofuel/Waste

1,93

Geothermal Energy

0,31

TABLE.10-ELECTRICITY GENERATION OF COUNTRIES ON COAL BASIS(2012) COUNTRY

Coal Ratio in Electricity Generation (%)

Kosovo

98,80

Mongolia

95,00

China

75,79

Bosna Herzegovina

69,43

Australia

68,80

Greece

51,02

Germany

45,57

USA

38,30

Turkey

28,40

North Korea

27,03

World Average

40,29

Spring 2016

Electricity Generation and Coal in Turkey Turkey’s electricity production is 250.435 GWh in 2014 and 48% of it (120.437 GWh) is obtained from natural gas. Coalfired electricity generation which was 74.040 GWh in 2014 constitutes 29,6 of total quantity. Share of imported coal in coal-sourced electricity generation is 46,7% and its rate in total is 13,8%. Share of local coal in total coal is 53,3% and its rate in total is 15,8%. Hydroelectric sources which are considered in the class of renewable energy with 40.396 GWh (16,1%) take third place in electricity generation. When wind, geothermal and other renewable sources are added, share of renewable energy in total electricity is seen to be 20,9% (Table 11). TABLE.11-SOURCES OF ELECTRICITY GENERATION IN TURKEY (2014) Row

Natural Gas

Production (GW/h)

Ratio (%)

120.437

48,09

Local Coal

39.493

15,77

Imported Coal

34.547

13,79

74.040

29,56

Coal

Source

Total

Hydraulic

40.396

16,13

Others

11.978

4,78

52.374

20,91

3.062

1,22

Renewable Energy

Fuel-Oil

Diesel-LPG-Naphtha

Total Renewable Energy

TOTAL

521

0,21

250.435

100,00

Dependence in Foreign Energy Whereas share of coal use in electricity energy was 33% in 1970, it decreased to 24% in 1980s and increased up to 49% in 1986. It became 29,6% in 2014. But considering local coal rates beside total coal figures import coal i.e. foreign dependency is seen to constitute second factor beside natural gas. The entire 49% in 1986 was completely made up of locally produced coal, the said rate decreased unfortunately to 15,8% in 2014. In 1980s the fact that natural gas operated power plants come into play inflicted a heavy blow into coal and decreased the rates enormously. Reasons like the fact that total share of imported coal in electric energy being 61,9%, foreign dependency in energy, security of

Spring 2016

supply and foreign trade deficit require immediate precautions.

Greenhouse gas emissions in Turkey

Turkey became a party to The United Nations Framework Convention on Climate Change (UNFCCC) in 2004 and has started to publish its greenhouse inventories since 2006. According to the agreement greenhouse gases of which emissions are determined are as follows: TABLE.12-GREENHOUSE EMISSIONS OF TURKEY (MILLION TONS ) Greenhouse Gasses

1990

2012

Increase Rate (%)

Carbon dioxide ( C02 )

141,6

357,5

152,5

Methane ( CH4)

34,1

61,6

81,0

Dinitrogen monoxide (N20 )

12,2

14,8

21,0

0,5

6,0

1.100,0

Hydrofluorocarbons ( HFCs ) Perfluorocarbons ( PFCs ) Sulphur hexafluoride ( SF6 )

Total Greenhouse Gas Emission

188,4 439,9

133,5

Energy Related Greenhouse Gas Emission

132,9 308,6

132,2

this, carbondioxide, methane and dinitrogenmonoxide are important among the six gases measured as greenhouse gas and others are considered as negligible. Considering the rates of increase within 12 years there are three gases which are most negligible and increase in them is seen to be 1100%. But since their rate in total is 1,4% for 2012, they are not taken into consideration. Considering first three gases methane (81%) and dinitrogenmonoxide (21%) are seen to be under 100% and carbondioxide is remarkable with 152,5%. All these values attribute the reason of the increase in greenhouse gas to carbondioxide and carbon emissions in common use.

Carbon Gas Emission in the World and Turkey

They are considered in two parts as energy-related carbon emissions and coalrelated carbon emissions (International Energy Agency). Total global carbon emission became 31.734 million tons in 2012 and coal-related carbon emission became 13.924 million tons (Table 13). As seen in the table, China leads the way in both emissions. Its carbon emissions are 8.206 million tons (25,86%) and 6.764 million tons (48,58%) respectively in energy-related carbon emissions and coal-related energy emissions. USA follows China in both emissions with 5.074 (18%) and 1.613 (11,58%) million tons. Turkey ranks 19th and 15th respectively in energy-related carbon emissions and coal-related carbon emissions with 302 and 139 million tons.

Carbondioxide (CO2), methane (CH4), dinitrogenmonoxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) and sulphur hexafluoride (SF6). According to 2013 inventory published by Turkish Statistical Institute, Turkey produces less than 1% of global greenhouse emissions. This rate is in proportion to Turkey’s population and economic magnitude. Considering the sectoral distribution of greenhouse for 2012 shares of energy, TABLE.13-CARBON (CO2) GAS EMISSIONS OF industry, waste and agCOUNTRIEs (2012) ricultural activities are Energy Related Coal Related COUNTRY Million Ton % Million Ton % 70,2%,14,4%, 8,2% and 8.206 25,86 6.764 48,58 China 7,3% respectively. Rate 5.704 17,97 1.613 11,58 USA of energy in total green1.954 6,16 1.359 9,76 India house gas emission 1.659 5,23 425 3,05 Russia (70%) are same for 1990 1.223 3,85 420 3,02 Japan and 2012 (Table 12). 755 2,38 318 2,28 Germany Data of greenhouse gas 376 1,18 291 2,09 South Africa emissions for 1990 and 593 1,87 134 0,96 South Korea 2012 are listed in the 534 1,68 132 0,95 Canada 532 1,68 İran table. Rate of increase 302 0,95 39 0,28 Turkey in total greenhouse gas 9.896 31,18 2.429 17,45 Others emission for 12 years is TOTAL 31.734 100,00 13.924 100,00 133,5%. According to

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CARBON GAS EMISSIONS OF COUNTRIES South Korea Turkey %1 %0 South Afrika Canada %2 %1

Others %13 China %49

Germany %2

Japan %3

Given our topic is coal and considering coal-related carbon emission, our country is found not to be so responsible for carbon emission as exaggerated and considering the power plants to be established with new and clean technology its place in global carbon emission is understood not to be changed so.

Coal-Fired Thermal Plants 1. Local Power Plants Russia %3

India %10

Total 28 power plants using local coal (1 hard coal-fired and 1 asphaltite-fired power plant) are in operation in Turkey. 4 of them are small-scale auto producer and 24 of them have the sufficient capacity which may be taken to consideration. All the ones commissioned before 2013 were operated by public sector until 2013. Today Çanakkale-Çan, Afşin Elbistan A-B and Manisa Soma A power plants with total installed power capacity of 3.159 MW (Table.14) held by public sector. Total installed power of Turkey is 9.812 MW in which 9.107 MW is lignite-fired power, 335 MW is hard coal-fired power and 405 MW is asphaltite-fired power.

USA %12

Total emissions of both countries are 44% and 60% respectively in energy and coal related carbon emissions. So, half of the carbon emissions in the world are caused by these two countries. Russia, Japan and Germany follow these countries. Actually majority of the global carbon emissions are caused by the said five countries. Turkey is responsible for 0,95% of total global energy-related carbon emissions and 0,99% of total global coalrelated carbon emissions. Coal-related emission constitutes 46% of energy emission in the country.

TABLE.14-OPERATED COAL-FIRED POWER PLANTS IN TURKEY Row

SOURCE

TABLE.15.1- CONTRACTED LOCAL COAL-FIRED THERMAL POWER PLANTS IN TURKEY

RATİO (%)

POWER (MW)

Lignite-Fired Power Plant Capacity

92,81

9.107

Hard Coal-Fired Power Plant Capacity

3,06

300

Asphaltite-Fired Power Plant Capacity

TOTAL LOCAL PLANTS

8 power plants (2 asphaltite-fired power plant) with installed power capacity of 3.065 MW have production license and are under construction. 8 power plants with installed power capacity have obtained pre-operation license. Pre-operation licensed projects are listed in the table 15.1. All of the projects with pre-operation licenses are the original projects of private sector and 3 of the power plants under construction are the joint works of public-private sectors (TTK, TKİ). Other than these, there are projects which are contracted out by TKİ and TTK and have been still in progress. In addition of the power plant of Bartın, joint project of TTK/HATTAT under construction with a capacity of 1.100 MW, a second project with a capacity of 1.200 MW is in progress. Bingöl Karlıova project with 150 MW capacity which is given out by TKİ by contract to FLAMİNGO for assessment has been still in progress. TTK has made four tenders; one of them is intended for electricity generation.

4,13

405

100,00

9.812

Row

Capacity Stage ( MW )

County

Institute

Bartın

Amasra

TTK/HATTAT

1.100

Konya

Ilgın

CİNER

500

Eskişehir

Mihalıçcık

TKİ/ADULARYA

145

Manisa

Soma

TKİ/HİDROGEN

450

Row

Province

County

Source

Installed Capacity (MW)

Management

Çanakkale

Çan

ODAŞ

330

Kahramanmaraş

Afşin-Elbistan A

Lignite

1.355

EÜAŞ

Sivas

Kangal

SOYAK

135

Çanakkale

Çan

Lignite

320

EÜAŞ

Şırnak

Silopi (Asphaltite)

TKİ/GLOBAL

270

Manisa

Soma A

Lignite

EÜAŞ

Şırnak

Silopi (Asphaltite)

TKİ/ANADOLU

Ankara

Çayırhan

Lignite

620

EÜAŞ

Kahramanmaraş

Afşin-Elbistan B

Lignite

1.440

EÜAŞ/PARK

TOTAL

135

3.065

Şırnak

Silopi

Asphaltite

405

PARK

İzmir

Kınık

FİNA

660

Zonguldak

Çatalağzı

Hard Coal

300

BEREKET

Kahramanmaraş

Elbistan

DİLER

400

Muğla

Yatağan

Lignite

630

BEREKET

Kütahya

Domaniç

ÇELİKLER

300

Sivas

Kangal

Lignite

457

KONYA ŞEKER

Amasya

GÜRMİN

300

Manisa

Soma B

Lignite

990

KONYA ŞEKER

Bursa

Keles

ÇELİKLER

270

Bursa

Orhaneli

Lignite

210

ÇELİKLER

Adıyaman

Gölbaşı

SANKO

150

Kütahya

Seyitömer

Lignite

600

ÇELİKLER

Çankırı

Orta

ÇALIK

150

Kütahya

Tunçbilek A

Lignite

ÇELİKLER

Bursa

Osmangazi

DOSAB

Kütahya

Tunçbilek B

Lignite

300

ÇELİKLER

Muğla

Yeniköy

Lignite

420

İÇTAŞ-LİMAK

Muğla

Kemerköy

Lignite

630

İÇTAŞ-LİMAK

Adana

Tufanbeyli

Lignite

450

ENERJİSA

Bolu

Göynük

Lignite

270

AKSA

Kütahya

Lignite

POLAT

Eskişehir

Lignite

145

ADULARYA

Karabük

KARDEMİR

Other

60,16

PRIVATE

TOPLAM

Spring 2016

Mihalıçcık

Lignite

9.812

2.280

Adana

Tufanbeyli

TKİ/FLAMİNGO

Bingöl

Karlıova

TTK/HATTAT

600 150

Bartın

Amasra B

TTK/DEMİR

1.200

Zonguldak

Gelik Güneyi

TTK

160

Zonguldak

AlacaağzıKandilli

Zonguldak

Bağlıkİnağzı

TTK

Coal Production

Kastamonu

Azdavay II-A

TTK

Coal Production

Coal TTK/SOMA A.Ş. Production

On-Going

TOTAL

Pre-Operation

Construction

Province

DEMİR Mining Co has been at the design stage of a power plant based on hard coal. It will be clear whether these projects will turn to power plant projects in the future (Table 15.1).

2.) Potential Local Coal Fired Power Plant Sites

Public Grounds: Licenses that are assigned to EÜAŞ and TKİ for power plant following the completion of reserve determination by MTA and that are assigned to MİGEM for tender and their power plant capacities are listed in the table. However information of the sites which have not been assigned yet and still in progress are also stated in the table. The ones of which capacities are de-

termined are totaling more than 24.000 MW. 3.750 MW of them is arising from the projects which have been prepared in advance and still in progress and of which other part have been developed newly. Recently, EÜAŞ announced an auction to ensure that exploration resource and reserves identification processes meet the relevant international standards for Konya Karapınar-Ayrancı and offers received are being assessed. Unique Projects of Private Sector: Power plant sites which are developed by private sector by itself and licensed duly for it are listed in the table 15.2. Total capacities of the projects which are at the stages of exploration, project design, evaluation and waiting guarantee of purchase and/or other incentives are over 2.500 MW.

3.)Imported Coal-Fired Power Plants Imported coal-fired power plants have gained currency since 2000. As by 2014, their installed power capacity was equivalent to 8,7% of Turkey’s installed power. There are total 10 imported coal-fired power plants which have still been in operation. As seen in the table their total capacity is 6.289 MW. 8 of them are over 150 MW in capacity and other two of them have smaller capacities (Table 16). Other imported coal-fired power plants are as follows: 2 plants under construction with total capacity of 1.945 MW and 8 plants with ongoing production license with a total of 5.195 MW, pre production license for 4 plants with a capacity of 4.200MW and pre-license at the stage of assessment for 13 plants with a capacity of 12.655 MW.

TABLE.16.1- IMPORTED COAL-FIRED POWER PLANTS IN TURKEY

TABLE.15.2-LOCAL COAL -FIRED POWER PLANTS IN EXPLORATION AND PROJECT STAGES Row

Province

County

Instution

Capacity (MW)

Ankara

Beypazarı/ Çayırhan

EÜAŞ

750

Kahramanmaraş

Afşin-Elbistan - C

EÜAŞ

3.000

Kahramanmaraş

Afşin-Elbistan - D

EÜAŞ

Kahramanmaraş

Afşin-Elbistan - E

EÜAŞ

3.000

Konya

Karapınar-Ayrancı

EÜAŞ

5.250

Afyon

Dinar

EÜAŞ

1.200

Trakya

Havzası

EÜAŞ

5.000

Eskişehir

Alpu

TKİ

6.150

Kırklareli

Pınarhisar

TKİ

550 120

Konya

Ilgın

TKİ

Amasya

Merzifon

TKİ

Malatya

Yazıhan

MİGEM

Isparta

Şarkikaraağaç

MTA

Row

Province

County

Installed Capacity (MW)

Hatay

Ceyhan /Sugözü

1.320

OYAK

Çanakkale

Biga

405

İÇTAŞ

Çanakkale

Biga/Bekirli

1.200

İÇTAŞ

Kocaeli

Gebze

190

ÇOLAKOĞLU

Management

Zonguldak

Çatalağzı

1.390

EREN (ZETES 1-2)

İzmir

Aliağa

350

İZDEMİR

Hatay

İskenderun

1.200

ATLAS

Hatay

İskenderun

220

İSDEMİR

Others

TOTAL

Stage

6.289

TABLE.16.2-NEW IMPORTED COAL-FIRED POWER PLANT PROJECTS IN TURKEY

To be Tendered

Row

Province

Yumurtalık

Ayas

Çanakkale

Cenal

Zonguldak

Çatalağzı

Name

Process

Installed Capacity (MW) 625

OYAK

Construction

1.320

ALARKO+CENGİZ

1.400

EREN (ZETES 3)

TOTAL

65 To be Transferred

Management

3.345

Hatay

Selena

900

ENSARİ

Çanakkale

Kirazlıdere

660

DOĞTAŞ

Adana

Hunutlu

Sinop

Gerze

License

1.200

EMBA

1.000

ANADOLU

Adana

Yumurtalık

600

İÇTAŞ

Çanakkale

Karaburun

135

SARIKAYA

500

Adana

100

HAKAN

150

Hatay

600

DİLER

Denizli

Çardak

MTA

Denizli

Çivril

MTA

Kahramanmaraş

Afşin Elbistan

ANADOLU

Denizli

Tavas

AVDAN ENERJİ

Ankara

Çeltikci

ÇOLAKOĞLU

300

Merzifon

Suluova

PLT

270

Denizli

Kale

HOLUN

275

Bingöl

Sancak

HOLUN

Bingöl

Sancak

Eskişehir

Alpu

ESAN

TOTAL

5.195

Hatay

İskenderun

1.200

Hatay

İskenderun

800

SANKO

250

Adana

Yumurtalık

660

ATAKAŞ

600

Çanakkale

Biga

1.540

DD ELEKT.

Exploration/ Project

TOTAL

Pre License

TOSYALI

4.200

Spring 2016

Such investments together with natural gas which are being the reason of our foreign dependency in energy should be balanced with local coal-powered investments.

Incentives

All legal regulations, incentives, economical structure, banking system and social opportunities sought by foreign investors are available in Turkey. A strong government is in charge, which commits to support coal investments. Our incentive legislation is divided in six regions in accordance with the development level of country. Coal investments equivalent to and lower than 5 benefit from the incentives for 5th Region. So it means a serious incentive throughout the country. Value added tax exemption, customs duty exemption for the machinery and equipments coming from abroad, employer’s national insurance contribution support, free investment place allowance, tax reduction by 70%, investment contribution by 30%, loan interest support by 2 points for external loans and 5 points for internal loans are implemented. In addition to such incentives implemented in the industry, employee salary support is applied also. This constitutes to the half of the salary of a worker employed with minimum wage. Furthermore guarantee of purchase will be applied for the electricity to be generated at the power plants based on local coal. Negotiations between price and rates have been still in progress.

Conclusion

According to coal reserves accepted by German Federal Institute for Geosciences and Natural Resources (BGR) we have 0,26% of total global coal reserves in the world, 0,73% of total lignite reserves and 0,07% of hard coal. China produces one fourth of our total coal reserves by itself in one year. Share of Turkey in global consumption is totally 1% in 2013. Our effect on the world in the production and consumption of coal are at the rates stated. We caused 0,95% and 0,99% of global carbon emission respectively in

Spring 2016

energy-related carbon emission and coal-related carbon emission. When all power plant investments planned in Turkey are commissioned, abovementioned rate won’t exceed 1,5% even if global emission remains stable. On the other hand rate of coal in energy is just 29% where 16% of it is provided from local sources in Turkey where foreign dependency in energy has reached to 61%. Such dependency to natural resources and imported coal puts Turkey strategically in a difficult position. Foreign dependency in energy, security of supply, current deficit and vital need for employment oblige Turkey to increase production of the coal as the safest local source. Other than the investments under construction Konya Karapınar, Eskişehir Alpu, Bingöl fields, coal fields in Thrace region and non-assessable parts of Ankara Beypazarı held by public sector (TKİ, EÜAŞ, TTK and MTA) are planned to be offered to prospective investors. Their potential is known to be about 16.000 MW and it is expected that an investment area of totally 20.000 MW together with private sector will be created. On the other hand it is possible to operate deep coal fields which don’t allow production economically thanks to the new technologies like gasification on site. Relevant amendment in legislation is now at the final stage. Now it is possible to make investments economically thanks to new clean coal technologies developing day by day where heavy metals and even carbon can be filtered. It is possible to take the technological precautions to minimize the negative effect on the environment for the assessment of local coals. Thus relevant investments will be carried out in line with the sustainable development principles covering sustainable life.

References 1.)Enerji Atlası. Kömür ve Linyit Santralları, www.enerjiatlasi.com/komur. Access date:28.05.2016. 2.)Turkish Republic Energy Market Regulatory (EPDK). Elektrik Piyasası Lisans-

lar, www.epdk.gov.tr/TR/dokumanlar/ lisanslar. Access date:28.05.2016. 3.)Ministry of Energy and Natural Resources (ETKB). September 2015. Kömür Raporu, Ankara, 69 s. 4.) Ministry of Energy and Natural Resources (ETKB). 2015. Yerli Kömür Kaynaklarının Elektrik Üretim Amaçlı Değerlendirilmesine İlişkin Strateji Belgesi, Ankara, 26 s. 5.)Güner Ünalan. 2013. Kömür Jeolojisi, Ankara, MTA Genel Müdürlüğü Yayınları, 557s. 6.)General Directorate of Mining Affairs (MİGEM). January 2016. Kömür Madenciliği Brifing Notu, Ankara. 7.)Muzaffer Başaran. 13-14 October 2015. Investing in Non-Renewable Energy Coal Fired Power Plants, İstanbul, 7th Turkey Energy Forum (presentation). 8.)Nejat Tamzok. 2015. Coal in The World and in Turkey, Ankara, Faculty of Economics, Administrative and Social Scienses Bilkent University (conference). 9.)Sabancı University, The Istanbul Policy Center, November 2015. Kömür Raporu İklim Değişikliği, Ekonomi ve Sağlık Açısından Türkiye’nin Kömür Politikaları, İstanbul, Sabancı Üniversitesi, 85 sayfa. 10.)TMMOB Maden Mühendisleri Odası Enerji Çalışma Grubu, July 2015, Enerji ve Kömür Raporu, Ankara, 128 s. 11.)Türkiye Ekonomi Politikaları Araştırma Vakfı (TEPAV). August 2015. Ankara, Türkiye Kömür Madenciliği Sektöründe Sözleşmesel Düzenlemeler, 162 s. 12.)Turkish Electricity Transmission Co. July 2015. Türkiye Elektrik Enerjisi 5 Yıllık Üretim Kapasite Projeksiyonu, Ankara, 97 s. 13.)Turkish Coal Enterprises (TKİ). 2015. 2015-2019 Stratejik Planı. Ankara, 78 s. 14.) Turkish Coal Enterprises (TKİ). 2015. Kömür (Linyit) Sektör Raporu, Ankara, 76s. 15.)Volkan Ş. Ediger. 2014. TKİ ve Kömürün Tarihçesi İle Türkiye Kömür Stratejileri, Ankara, Türkiye Kömür İşletmeleri Kurumu Yayınları, 497 s. 16.)World Energy Outlook 2015. 2015. France, International Energy Agency, p.700.

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Spring 2016

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INFORMATION NOTE ON SUPPORT REQUIREMENT FOR ENERGY GENERATION FROM LOCAL COAL Why is electiricity generation from local coal important? 1 It provides base load electricity generation with security of supply and at lowest cost Amount of electricity

Hourly electiricity consumption during day time (10 August week 15 )

45 40

Max load

Thousand MW

Medium range load

30 25 20 15

Base load

10 5 0

Monday

Tuesday Wednesday Thursday

Friday

Saturday

8 16 24 8 16 24 8 16 24 8 16 24 8 16 24 8 16 24

consumption in the country never falls below certain base load amount. It is very important to produce this base demand from the most secure and the lowest cost possible from supply viewpoint. By orientation of the strategic resources of the country to energy generation, base load demand will be met independent from the international ﬂuctuating energy prices.

2 It has a lowering eﬀect on the current deﬁcit of our country For every 1000 MW installed capacity 2.7 m ton coal

1 MWh 1 ton electricity imported coal Imported coal power plant (1000 MW installed capacity) 2.7 m ton coal import

7.5 TWh electricity per annum

~200 m $ leaving the country per annum* *Cost of imported coal at 6000 kcal/kg caloriﬁc value is 75 $/ton

Every 1000 MW imported coal power plant installed instead of power plants ﬁred by local coal pays abroad a fuel price of 200 m $ per annum An equivalent power plant ﬁred by local coal ensures 6 billion $ foreign currency to remain in our country for 30 years of operation life

3 The energy investments create the highest employment 1450 employees mining

1800 persons are employed directly by 1000 MW local coal ﬁred power plant and the underground mine feeding the power plant When the suppliers, servicemen, trade created and the ﬁnance activities are considered together, an additional indirect employment opportunity for 4850 persons is created in general in economy.

~4850 employees indirect *

Total 6650 employed persons

Together with family members 26600 persons

350 employees power plant

Upkeep of a population of 26600 with their families may be provided .

*Her bir maden/enerji istihdamı ilave 2.7 dolaylı istihdam yaratmaktadır *Each direct mining/energy related employment creates 2.7 additional indirect employments.

Spring 2016

INFORMATION NOTE ON SUPPORT REQUIREMENT FOR ENERGY GENERATION FROM LOCAL COAL Why do local coal ﬁred plant investments need more support? 1 A long and arduous investment period is necessary. Start

Mine construction

Feasibility

2 years

Research

Mine project

It would be very risky to start construction by providing ﬁnance, before ensuring that coal production may be carried out with full eﬃciency as the power plant investment is huge.

Coal production 3 years

Finance

Long preparation period is necessary for starting construction in local coal mine and power plant projects.

Coal analysis

Power plant construction

Permissions

3 years

Electricity generation 4 years

First electricity generation from local coal ﬁred power plant may only be realized 9 years after the project start up

Boiler design spesiﬁc to coal Finance

9 years

2 There is no possibility to choose and change location. Local coal ﬁred power plant has to be installed at the location of coal source or at very close vicinity. As there is no chance of changing location, local coal ﬁred power plant project process may be blocked due to land problems, negative institutional views and delays in necessary permission processes.

3 Financing is diﬃcult. Source of ﬁnance

Finance relevance

Multilateral development banks

OECD development agencies European and American export ﬁnance

decreasing

Asian export ﬁnance Overseas commercial banks

With export ﬁnance and strong guarantees

Domestic commercial banks

To projects for which investor guarantee is provided

Spring 2016

Institutions such as world Bank, European public improvement and development bank, European investment bank reduced their finance possibilities for coal fired power plants Although export financing is possible under certain circumstances, this approach weakens the investors argument in technical and commercial bargaining against suppliers and adversely affect the future of the project. On the other hand, commercial banks consider financing only under aggravated circumstances and at high cost due to excuses such as long preparation and investment period, uncertainty permissions, and high risk perception towards electricity market.

INFORMATION NOTE ON SUPPORT REQUIREMENT FOR ENERGY GENERATION FROM LOCAL COAL How can the future electricity generation from local coal projects be supported? Positive side Subject which may be improved

Project design and realisation of mine and power plant investments one after another necessitate a long preparation and investment period.

Structural diﬃculty

Simplifying permission periods Vagueness in conditions and timing of approvals and permissions to be obtained from Public Institutions and Organisations impose further uncertainties on the investment period. Investment cost is very high due to the fact that the power plant to be installed necessitates special design for coal and also includes mine project in advance.

In the event of carrying out the project and preparation works properly, coal extraction [fuel] and operation costs become predictable to a great extent. Generation of reliable revenue Because of being a very long term investment, it is not possible to make commercially reliable price and revenue estimates pertaining to the operation period within free electricity market conditions.

Revenue Investment Capital

Operation Loan

Expenditure

Proﬁt

Pay-back As the investment size is rather high, the ratio of a reasonable capital to be invested to the coverage ratio of the investment is low, and thus, the need for external source to a signiﬁcant extent is obvious.

The necessity is imposed by the long investment period, long loan period and grace period.

The loan amount increases due to the size of the investment and low ratio of capital coverage, and therefore, the grace period is prolonged; despite this, long term ﬁnance possibilities in our country are rather bleak. * Generation reliable revenue Financing costs are very high and may be provided under extremely heavy guarantee conditions due to the fact that it is not possible to make reliable revenue projection on such a long term basis by the ﬁnancier

* Only 4% of the bank resources have 5 years or more tenure period. (BDDK Turkish Banking System Report, March 2015)

Possibility to direct loan pay-back payment of operational proﬁt by the tax advantages applied in the scope of existing investment incentives has grown strong.

Spring 2016

INFORMATION NOTE ON SUPPORT REQUIREMENT FOR ENERGY GENERATION FROM LOCAL COAL What do we suggest to support New Projects? 1 Special law similar to mining law As the mining investments need to be made where the resources are located, Mining Law has been made to bring ease to public works, utilising of forests etc. If the power plants to be installed for electricity generation from local coal are similarly included in the scope of special arrangement, permission and approval processes will be simpliﬁed and the prospect of new investments will be ensured.

2 Electricity price guarantee with time limit to render suitable financing possible In the prevalent finance environment, long-term credits of banks for major projects are for about 10 years. In order for a project to be suitable for bank financing, it should be in a position to generate sufficient cash within this period for back-payment of the credit.

Investment & Finance

1000 MW power plant example Approximate investment and ﬁnance structure

mine

300 m $

1500 m $ Average loan date 4.3 years

When interest costs of credits used and the re-ﬁnancing during the investment period are subtracted, the investor will be 1.45 billion $ in dept at the start of the operation period. The interest to be accrued during the pay-back period and the total to be paid will reach 1.9 billion $.

Excluding research period 300 m $

Power plant 1200 m $

%20 capital %80 dept

1200 m $

When the total credit amount is taken into account, average year of loan is 4.3, and this means that at the end of 7 years, when the operation period starts, the creditors will have carried the loan for 2.7 years.

With ~7% interest

Loan transfer until operation stage 2.7 years

When ﬁnance conditions are considered, the investment should be in a position to pay the total loan in maximum 8 years of operation period. (Even so, the period between the initial credit borrowing and closing of the loan reaches 15 years.)

Interest Credit usage Back payment

Operation & profitability

Mine construction

The annual loan service to be made during the operation period is approximately 235 million $.

Power plant construction

Internal consumption %9

Mine 20 $ / ton cost of coal

Coal 1 ton fuel (2,250 kCal/kg)

Power plant 5 $ / MWh operation cost

Electricity 1 MWh generation

Sales 0.91 MWh marketable energy

Proﬁtability Revenue: 0.91MWh x Electricity price Expenditure: 25 $ / MWh generation

To be able to pay an annual loan of 235 m $ for a Power Plant at 1000 MW capacity, operating 7500 hours per year, it is neccesary to make a proﬁt of minimum 31 $ per MWh generation, excluding tax.

*Calculation was made by taking the tax advantages imposed in line the existing incentive laws.

Spring 2016

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Akçelik Madencilik

Mining, supplies the needs of industrial raw materials and thus form the basis of a country’s economy and that makes it a leading industry initiating economic development. Akçelik Madencilik is amongst the leading coal producers in Marmara Region. Since its foundation, Akçelik Madencilik has been working to increase natural wealth with environment friendly policy and care for ecological balance. Since its establishment, the company has served for mining industry for years without compromising from its quality, service and trust principles. Akçelik Madencilik serves all customers for their success. All products and services offered by Akçelik Madencilik are accredited according to international standards. Mission of Akçelik Madencilik is to offer its customers; products and services according to the international quality standards, to implement further development and innovation, to contribute positively to national economy and achieve sustainable growth. We continuously follow and apply latest technology at all stages of our activities from exploration to exploitation of underground resources to finally provide higher added value for our country. Our basic principle is to act environment friendly complying with legal regulations and procedures in a human centered strategy with increased customer satisfaction

Spring 2016

Akçelik Madencilik was founded by Haydar Akçelik in 1961. Since its foundation, this family owned company has been producing coal with open pit mining in Akpınar village, İstanbul. At the time due to lack of infrastructure and services with limited technology, company developed best practices to overcome those difficult times. Akçelik Madencilik was one of the main suppliers of coal for İstanbul’s heat demand when there wasn’t any natural gas and imported coal in Turkey. After Haydar Akçelik passed away, his son Nadir Akçelik took over the company and carried on family business. Nadir Akçelik died in 2006 and Umut Akçelik took his place as being third generation family member and made the decision to invest in a coal mine outside of İstanbul. In 2011 the company started coal production at Malkara, Tekirdağ. Coal production is continued from the mine in İstanbul at lower capacity, is mainly used for domestic heating. The coal being produced in Malkara operation is consumed both by industrial facilities and for domestic heating. The

coal produced in Malkara needs to be enriched and accordingly there are 2 coal washing facilities in the minesite and raw coal is cleansed from clay and dirt in the process. After cleansing and enrichment, coal goes through dewatering processes and water is removed at 3 dewatering facilities in the minesite. 1500 tonnes/day coal is produced and 1000 tonnes of this daily production supply needs of local textile, paint, paper and brick industries. Company made 3 royalty agreements specifically on coal mining at Edirne, Süloğlu in 2016. Necessary planning and preparations are completed for commencing production and the permits are awaited Akçelik Madencilik does not compromise health and safety. Company’s health and safety expense forms 8% of its general expenditure. There are 4 occupational health and safety engineers and 13 mining engineers employed in the company. Akçelik Madencilik carries out an intensive educational program for its personnel at all levels in a mining school manner. www.akcelikmadencilik.com

Himmetdede Gold Mine

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Famur-Erkom Delivers High End Products for Mining Operations FAMUR is one of the world leading manufacturers of machinery and equipment used for underground and open-pit mining operations. For over 100 years our products have provided excellent performance and work safety in underground mining. We focus our efforts on manufacturing technologically advanced longwall systems with cutting edge performance parameters. FAMUR machinery is equipped with control and monitoring solutions supported by computer engineering and information technologies improving occupational safety and work efficiency of miners. Our products are designed for operations under extremely harsh mining and geological conditions, which enables us to fulfill even the most demanding orders worldwide.

Spring 2016

In addition, the activity of FAMUR includes the manufacture and delivery of machinery and equipment for continuous handling and reloading of bulk materials as well as manufacturing of roadheaders. We provide our services in the field of engineering, erection and construction of various machinery for shaft winder towers and coal preparation plants furnished with the most advanced technological lines. Export drives our development. With over 2500 employees FAMUR machinery and technology are recognized in numerous mines all over; we are constantly trying to reach places where mining is still in development stage and in need of reliable equipment. FAMUR has been actively developing its business activity on foreign markets, including the Turkish market. We have been working with ERKOM as our distributor in Turkey. ERKOM is

a well-known and expert company in Turkey, trading industrial, mining and construction machinery for 40 years. ERKOM’s head office is in Ankara and it has got three branches in İstanbul, Soma and Trabzon. All equipment manufactured by FAMUR, both roadheaders and shearer loaders, as well as belt conveyors and armoured face conveyors are present at two mines in Soma area, these are Demir Export Fernas and İmbat Madencilik. Recently, FAMUR has delivered to İmbat Madencilik minesite the equipment for two faces to be exploited by the LTCC method (longwall top coal caving), including two KGS-245N shearer loaders mounted on the PSZ-750/1x85/250 armoured face conveyors and one set of the FRS-16/26-4x785 powered roof support. The KGS-245N shearer provided with the Eicotrack haulage system is intended for bi-directional,

pocketless cutting and loading of coal in longwall system exploitation of seams from 1.4m to 2.63m high. The shearer is provided with cutting drums of Ă&#x2DC;1400 mm, powered by motors of 120 kW. Total installed power of the shearer is 300kW. The KGS-245N haulage operation is carried through SOK-250 hydraulic motors with the maximum pulling force of 2x270kN. The shearer can reach a speed of up to 6 m/min during cutting. It is provided with a water motor cooling and an oil cooling systems. An automatic control (regulation) of the haulage speed, a remote radio control and a double brake system the shearer is provided with, make the machine operations easier and significantly improve safety of operation. The PSZ-750/1x85/250 armoured face conveyor is provided with a drive unit of 85/250 kW integrated on the head discharge. The tail station structure enables installation of an additional drive unit. The chain tension is provided through the application of the telescopic tail unit. Pans eliminate the need to shorten the chain up to 1,0m of its elongation. In addition, the conveyor is provided with a hydraulic chain tensioning device integrated on the drive unit. It enables safe chain pre-tensioning and fastening operations. The toothed coupling installed between the drive unit and the drive frame (body) allows to replace the drive sprocket without necessity of removing the drive unit. Construction of the route components, as well as properly matched shape of chain flight bars enable to optimize wear and to decrease frictional resistance,

which ultimately allows to increase the lifetime of these components. The FRS-16/26-4x785 powered roof support set includes 94 line shields and 6 end shields provided with stabilization devices. The powered roof support was designed in consideration of specific requirements of the customer, as well as with geological and mining conditions prevailing in the intended face location. The hitherto experience of the Ä°mbat Madecilik minesite in the LTCC mining operation was taken into account in designing process. A prototype shield of the FRS-16/264x785 powered roof support was subjected to fatigue tests for symmetrical and asymmetrical loads of 30.000 cycles, which corresponds to 10 years of the powered roof support lifetime. The FRS 16/26-4x785 is intended for working

within the operational height range of 2,0 to 2,4m. Due to the expected operation in soft floors, the powered roof support is provided with enlarged bases (bottom sprags) equipped with base lifting mechanism enabling self-cleaning of the area between the powered roof support and the armoured face conveyor and crossing over ground braces of 180 mm high. Compact structure of the powered roof support, as well as application of proven and verified solutions resulting from the extensive knowledge and expertise of the engineering staff cooperating with the end customer, enables to guarantee reliable, failurefree and effective operation of the longwall system equipment and the customer satisfaction. www.erkom.com.tr

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Ortadoğu Drilling Ortadoğu Drilling was established in 1995 with the purpose of providing services to mining sector by deep wireline holes. With our own manufactured drill rigs GEO-500, GEO-900 and GEO-1500 having the most recent technology, we complete underground and surface wireline diamond drilling holes with success. In order to meet the demands of civil engineering sector, geotechnical holes/studies and hole tests can be performed in tunnel, dam, airport or railway projects by our company. In the projects for exploration of geothermal reservoirs in the energy sector, continuous coring “slim holes” deeper than 2.000 meters are being drilled by our company. Among our targets, we plan to exceed the depth of 3.000 m, in order to be able to provide exploration services in petroleum and natural gas sector. With our GEO-1500 drill rig model, we have just completed a “slim hole”, which is recorded as the “deepest wireline drilling in Turkey” with the following depth measures; 1.024 m PQ, 2.206 m HQ and 2.503 m NQ.

Especially in coal mining, Ortadoğu Drilling is the leading drilling company in Turkey as drilled more than 300.000 meters in total only in coal projects in all wireline coring sizes. Our experienced drilling crew successfully completed many coal drilling projects with holes deeper than 1.200 m. Our company

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performs all required drilling applications to be able to recover the coal at its original situation. Also, any required hole tests are being done conveniently. Our selected coal references are as follows: • MTA (General Directorate of Mineral Research and Exploration): • Konya/Karapınar-Coal Exploration and Development, 2008-2009 Total 63.000 m drilling • Eskişehir/Alpu-Coal Exploration and Development, 2012 Total 31.000 m drilling • Afyon/Dinar-Coal Exploration, 2011-2012 Total 11.000 m drilling-Over 1.000 m continuous coring holes • ADULARYA • Eskişehir Koyunağılı-Coal Exploration and Development for the Establishment of “Yunus Emre Thermal Power Plant”, 2007-2009 Total 67.000 m drilling • Kütahya/Gediz-Coal Exploration, 2010-2011 Total 13.000 m drilling • Ankara-Coal Exploration, 2013 Total 4.000 m drilling • POLYAK EYNEZ • İzmir/Elmadere-Coal Exploration and Development, 2011-current Total 32.000 m drilling-Over 1.200 m continuous coring holes

• SOMA KÖMÜR İŞLETMELERİ • Zonguldak-Coal Exploration, 2012 -2013 Total 9.000 m drilling-Over 1.100 m continuous coring holes • Amasya/Merzifon-Coal Exploration, 2012-2013 Total 14.000 m drilling-Over 1.100 m continuous coring holes

• DEMİR EXPORT • Manisa/ Eynez-Coal Exploration and Development, 2012-current Total 9.000 m drilling • DEBA MADENCİLİK • Edirne/Uzunköprü-Coal Exploration and Development, 2013-2014 Total 11.000 m drilling • Edirne/Enez-Coal Exploration and Development, 2015 Total 5.000 m drilling • İCK AMETİST • Tekirdağ/Şarköy-Coal Exploration, 2015 Total 6.000 m drilling www.ortadogusondaj.com

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Golder Associates Established in 1960, Golder is a global, employee-owned organisation driven by our purpose to engineer earth’s development while preserving earth’s integrity. From over 180 offices worldwide, we help our clients to find sustainable solutions to the challenges they face every day. We do this by providing a wide range of independent consulting, design, and construction services to our clients in our specialist areas of earth, environment, and energy. Golder has been delivering quality technical solutions and risk management to the mining sector for over 50 years. Golder has worked on diverse mining projects in over 150 countries offering experience from a range of metals and minerals, including coal, gold, uranium, zinc, copper, and diamonds. Golder provides unique, broad expertise, and experience in all aspects of mining

projects from exploration through construction, operations, and finally closure. Golder’s integrated mine planning and permitting service provides tremendous efficiency and benefits to clients. Our solutions combine practical mining engineering designs with complete environmental permit application and support. We are familiar with a variety of surface and underground mining methods. We help to provide the foundations for successful and sustainable mining operations using proven approaches developed from our experience with mining projects around the world. Our reputation rests on our wealth of practical mine operations experience and technical capability. Our strength lies in our global network of specialist expertise, offices in all key mining areas, and in helping our clients to balance profitable mine operations with care for the environment and

community. We continue to build our reputation by integrating engineering, environmental, and social solutions at every stage of mining projects. Golder Associates Turkey was established in 2006 in Ankara and has been serving the mining, oil and gas, manufacturing, power and infrastructure sectors. Supported by a global team, our main areas of expertise include international code (JORC, NI 43-101) resource reserve estimations, environmental and social impact assessment (ESIA), hydrogeology and groundwater modelling, geotechnical, and mining engineering, feasibility studies and tailings & heap leach engineering and design. Golder Turkey has successfully completed many projects for various stage and scale mines, major natural gas pipelines, oil refineries, power plants, and ports in Turkey. www.golder.com

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Exploration Laboratory Services

Developing a coal deposit is a complex process. Mining exploration programs supply a company with vital information for future mine development and current mine planning. The implementation of an appropriate borecore program is an integral part of any mining operation. As such it is essential that the programs are performed by experienced and reliable coal technologists and are undertaken in a professional manner. ALS Coal delivers a high commitment to excellence and accuracy. With over 65 years of experience in exploration testing and analysis, ALS has the highest expertise, skills, equipment, people, knowledge and management systems solely dedicated to borecore testing and analysis. ALS Coal has the largest number of laboratories in Australia dedicated to exploration testing and analysis. Our “Centres of Excellence” are located at Brisbane & Newcastle with additional borecore capability performed at Lithgow, Gladstone and Emerald. ALS Coal has a demonstrated ability to perform multiple projects simultaneously without compromising the quality and turnaround of results. In addition ALS Coal has the ability to utilise

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the laboratory network to ensure all customers agreed time frames are met. ALS Coal is recognised internationally by the coal industry as leaders in exploration analysis, delivering results that can be relied upon and providing technical expertise for existing or new coal projects or developments.

Our Services • Physical Testing • Superintending and Certification • Carbonisation and Coke Testing • Combustion Technology • Environmental Testing and Monitoring • Coal Quality Management • Exploration Testing and Analysis • CHPP Services • Training • Coal Utilisation & Consulting www.alsglobal.com

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Independent Reporting for Coal Mines in Türkiye CONTACTS Keith Philpott Principal Geologist and Corporate Consultant SRK Consulting (UK) Limited

SRK Consulting, through its offices in the UK and Türkiye, has over the past decade undertaken numerous independent reviews and reports which were required by mine owners and operators, often at the instigation of lending banks or investors, to help secure external funding or internal approval for the financing of both operating and prospective underground mines and open pits. The products included hard coal, brown coal, and asphaltite. In addition, SRK Consulting has provided independent reporting relating to environmental and hydrogeological permitting and issues, and the investigation of slope failures on large open pits. The scopes of work and reporting formats have been varied and the author sets out below some of the variation in the work undertaken, the relationship between consultant and owner/operator, and the lessons learnt. SRK’s coal clients in Türkiye have included HEMA, Asia Minor Mining, Akenerji, AKSA, TEYO, AF-Consult, Garanti and international various banks. The work undertaken has varied from full Independent Technical Reports (ITRs) for financing, to scoping studies, resource assessments, Feasibility Study (FS) reviews, and plain written and verbal advice after review. All have entailed site visits by a multidisciplinary team of coal experts. SRK’s work for HEMA during the development of the Amasra B underground hard coal mine illustrates the benefit to both parties which accrues from a long-

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standing relationship established early in the project development cycle. Initially contracted to undertake a scoping study for the mine in 2005, soon after the acquisition of the licence by HEMA, SRK has continued to advise the company on the standards it needs to meet in the fields of exploration, resource and reserve assessment, mining, processing, financial modelling etc. in order to raise external finance. At the same time SRK has provided independent reports jointly for HEMA and prospective lending banks. As part of this process, SRK experts, including a port specialist who visited the proposed site for the shipment of processed coal, have visited the mine regularly during its development and taken part in discussions with mine staff, HEMA management and various banks to ensure the required standards are met and to explain any points of issue to both sides. At the same time HEMA produced various internal technical documents which were reviewed by SRK. In terms of reporting Resources and Reserves the JORC Code 2012 (The Australasian Code for Reporting of Ex-

ploration Results, Mineral Resources and Ore Reserves) was adopted and the original MTA exploration database supplemented by an extensive drilling programme undertaken by HEMA’s rigs and drill crews. Since the completion of the vertical shafts and the commencement of underground development HEMA has added further to the geological database through the detailed measurement of underground drivages and underground drilling. Mine safety has been a particular concern and focus of HEMA, given the poor safety record in the Turkish mining industry and in particular the Soma disaster. SRK’s experience, both in Türkiye and elsewhere in the world, is that safety is always a significant concern of lenders and that large mining accidents, whether they be at a mine operated by the company seeking finance or another unrelated company, can significantly affect the appetite of lenders and investors. For further information on the development of the Amasra B Mine the reader is referred to an article published in World Coal magazine in 2015.

In the work SRK has carried out on prospective and operating pits or mines associated with coal supply to a mine mouth power plant it is noticeable that often preliminary agreement for the power plant, often with an overseas company, has already been provisionally agreed before an independent view on the coal supply quantity, quality and economics has been sought. The latter has usually been instigated by the prospective lender or owner at a relatively late stage. As a result the available coal resource may not be realised to its full potential or exploited in the most economically and environmentally friendly method, or in extreme cases warrant the construction of the power plant at all. Investigations for a mine mouth power plant and its coal or asphaltite supply should go step by step, always ensuring that the investigations for one do not race ahead of the other. Another feature of the coal industry in Türkiye apparent to SRK has been the lack of exploration data, coal analysis and assessment carried out to rigorously applied protocols, or national or international standards. As a result check drilling and additional drilling to strict standards is usually required before resources or reserves can be declared in line with any of reporting codes that fall under CRIRS-

CO (Committee for Mineral Reserves International Reporting Standards). These codes include JORC (Australasia), PERC (Europe), CIM (Canada), SME (USA), NAEN (Russia) as well as codes from South Africa, Mongolia, Brazil and Chile and generally have similar standards but different terminology. Running through all of them is the aspects of transparency, materiality and competence. All require sign off by a Competent (Qualified) Person (CP). This person must have a certain number of years’ experience relevant to the mineral being assessed, five years in the case of JORC. In SRK’s opinion this should preferably be someone with long experience both in industry and consulting, although sign off could also be by a less experienced qualified coal specialist mentored by a more experienced expert. Some codes require the CP to have physically been to the mine or licence area, others do not. Reputable banks, stock exchanges or other lenders will normally require CPs to have reported on the assets and signed off Resources and Reserves to one of the international codes. Which one sometimes depends on the location of the asset, sometimes on the location of the lender or stock exchange, and sometimes simply the preference of the company or consultant. In Türkiye, SRK has usually applied the guidelines of

the JORC Code, the latest version (2012) of which requires the completion of four sections of a supporting table detailing all aspects of sampling techniques and data, reporting of exploration results, estimation and reporting of mineral resources, estimation and reporting of mineral reserves. Another feature of independent consulting is that frequently consultants, as part of a due diligence process leading to financing, are asked to review other consultants’ work as well as the company’s internal reporting and standards. In Türkiye, as elsewhere in the world, consultants vary in standard and SRK would always recommend a company, before appointing, to closely examine the CVs of experts that will be investigating, along with the previous work undertaken by the consultancy. SRK has in Türkiye come across reports supposedly undertaken to JORC guidelines and by a CP, which when examined could not be supported by SRK in either respect. Cheapest is not always best! Often an added bonus of independent reporting from a good consultant is that the company also gets good advice on how to improve certain aspects of its operation leading to technical or financial benefits. SRK is also able, helped by its worldwide network of over 40 offices dedicated to the mining industry, to assist companies in examining the potential of coal assets outside of its home country. It can supply local experts and interpreters who can assist with document translation, provide expertise in the national legislation and converse with in country experts in their own language. For example, SRK was able to assist Yıldırım Holding in its assessment of underground and open pit green field licences in Colombia and a Turkish investment company in the evaluation of underground mines in Rostov, Russia. To summarise, we would suggest that although it may at first glance seem that hiring a good international consultant is an unnecessary expense it is often a way to save time, money and mistakes. www.srkturkiye.com

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ÚJV Řež, a. s., Division ENERGOPROJEKT PRAHA Scope of Services and Experiences ÚJV Řež, a. s., ENERGOPROJEKT PRAHA Division (UJV EGP) provides multiprofessional Design, Engineering and other Special services for the Power and Heat generation sector and Incineration Plants including negotiating with state administration, Engineering, Consultancy and Advisory activities, Engineering Construction Supervision, Authorized Supervision, Technical support for the investor and Special services - Environment Impact Assessment Documentation and other documentation according to the law. Division provides coordination and management of large designs in Nuclear and Conventional energy sector as a General Designer. The UJV EGP services include: • Elaboration of Preliminary and Project Design documentation (Feasibility Studies, Technical - Economic studies, Documentation for Site and Construction Permit proceedings, elaboration of Basic Design, As-Built, coordination of Detail Design, etc.) • Engineering, Consultancy and Technical guidance (preparation of tenderrelated documentation, bidding docu-

Visualisation of coal fired power plant

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3D model of thermal power plant machine hall

ments, authorized supervision, start-up, commissioning, decommissioning etc.) • Environmental Impact Assessments Documentation • Safety assessment of waste disposal and repository systems. • The Division has over 120 designers in all required professions (mechanical, electrical, civil engineering, I&C), capable in data processing, 2D technology schemes, 3D models, schematic model and engineering database

Plant Schema (AxsysEngine), space model PDMS and databases (Oracle, PostgreSQL, MS-Access). EGP is division of ÚJV Řež, an engineering and scientific-research company dedicated to utilizing energy technologies in various fields and developing long-term sustainable environmentally-friendly energy. ÚJV is a company with high professional employee potential (ca. 650 employees, more than 1000 in the ÚJV Group), unique technological facilities, production and scientific capabilities, and research and workshop potential. History of ÚJV was started by its establishment in 1955. ÚJV is involved in many various international projects (with e.g. EU, USA, RF, Turkey and other partners) and has implemented many reference projects in countries of Europe and Asia (in the Czech Republic, Slovak Republic, Turkey, Ukraine, Pakistan, …). www.ujv.cz

Examples of projects realized the Czech Republic with participation of projects realized in theinCzech Republic with participation of of Examples ÚJV Řež, s., Division ENERGOPROJEKT PRAHA ÚJV Řež, a. s., a. Division ENERGOPROJEKT PRAHA 1st Integrated Combined 1st Integrated Combined CycleCycle Gas Gas Vřesová (2x220 PowerPower Plant Plant Vřesová (2x220 MWe)MWe) – 2001 1996 1996 – 2001

Complex Refurbishment ofFired Coal Fired Refurbishment of Coal Complex Plant PRUNÉŘOV II (3xMWe) 250 MWe) PowerPower Plant PRUNÉŘOV II (3x 250 2012 (illustrative 3D model) 2006 –2006 2012– (illustrative 3D model)

Supercritical Coal Power Plant LEDVICE Supercritical Coal Power Plant LEDVICE (660 MWe) heat supply (250 MWt) (660 MWe) with awith heatasupply (250 MWt) 2005 –2005 2008– 2008

Combined Gas Power Plant POČERADY Combined Cycle Cycle Gas Power Plant POČERADY (840 MWe) (840 MWe) 2008 –2008 2010– 2010

Incineration Plant MĚLNÍK to energy) Incineration Plant MĚLNÍK (waste(waste to energy) Feasibility at 2014 Feasibility study study at 2014

ÚJV a. s., 130, Hlavní 130, Řež, 68 Husinec, Česká republika ÚJV a. s., Řež, 250 68 Husinec, Česká ÚJV Řež, Řež, a. Řež, s., Hlavní Hlavní 130, Řež, 250 68 250 Husinec, Česká republika republika v obchodním vedeném Městským Zápis obchodním rejstříku vedeném Městským soudem vv Praze Zápis vvZápis obchodním rejstříkurejstříku vedeném Městským soudemsoudem Prazev Praze B, 1833, vložkaIČ: 1833, IČ: 46356088, DIČ: CZ46356088 oddíl vložka 46356088, DIČ: oddíl B, B,oddíl vložka 1833, IČ: 46356088, DIČ: CZ46356088 CZ46356088

tel.:227 +420 tel.: 133 313 tel.: +420 +420 227 133227 313133 313 fax:227 +420 fax: 133 340 fax: +420 +420 227 133227 340133 340

www.ujv.cz www.ujv.cz

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The History of Coal in Turkey and the Story of its Origins CONTACTS Arda Ayhan Geological Engineer, MSc Sectoral Event Planner and Organizer

Overview In the somber autumn of 1829, the reformist Sultan Mahmud II was grieving about the humiliating terms of Edirne Treaty which he reluctantly signed with his foe Tsar Nikolai I. On the other hand, in a Black Sea village, a few hundred kilometers East of İstanbul, a young mariner who was recently disbanded from the Navy was finally living the joy and pride of his discovery which he had been searching all over the mountains in his region for some time. He was appointed by the the Sultan’s writ and was motivated by the promised prize of fifty gold coins.

Russian-British fleets two years ago at Navarino was also forced to face this modernization, but they didn’t have the necessary technology, personelle and the fuel to sail the boats. That fuel was coal and that mariner was Mehmet. Also known as Tall (Uzun) Mehmet. As an educated person, Sultan Mahmud most probably didn’t know how this organic rock was formed but he knew that this burning rock was mentioned in the ancient writings of Chinese, Greeks and Romans and that they had used it in blacksmith stoves. But it wasn’t the fires of the blacksmiths that Sultan was curious about. His concern was the military advances of his Western rivals and his main foe in the North and these advancement was rapidly incresing because of a new invention that was called the steam machine. On the other hand Mehmet was unaware of this rock or at least its importance until the Navy officer gave hand samples of coal to every disbanded mariner with the writ of the Sultan. They were ordered to search for this black, burning rock in their own counties.

sample to dry and secretly entered the mill and throwed the stone in the stove. It was burning. Tall Mehmet finally found what he was looking for. Now it was time to find the source of the burning rock. His luck and will helped him. It was November. The cold Black Sea winter was coming. But Tall Mehmet wasn’t cold. Because in his stove he was burning coal. Mehmet had found the source and hit the first dig. According to the story Mehmet spent the winter in his village and when he was called back to Navy he went with a sample of coal in his bag. He showed the sample to his officers and when it was proved that the sample was really coal the news flew to the Sultan himself. The Sultan was very happy. He gave Tall Mehmet the promised prize and did more. He employed Mehmet for the mine with a salary of six golds per month.

Story of Tall Mehmet

Sultan Mahmud II

It was October and on the Northern coast of Black Sea, the victorious Russian Navy was discarding the old galleons and replacing them with steamboats. The Ottoman Navy which was almost totally destroyed by the allied

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Tall Mehmet was from the Kestaneci Village of Ereğli. He directly returned to his village after being disbanded and quickly started to search the region he was familiar to, for his Sultan and the prize. One day he was waiting in a mill to grind wheat. He was bored of waiting and had a short walk to the river shore without a purpose. Though he was unaware his subconscious was in a continious search for the mentioned stone. At that very moment he saw a black piece of rock on the river shore and remembered the sample in his bag. He took the stone and compared it with the sample. They looked quite similar. He wasn’t confined so he waited for the

Historical Town of Ereğli

Sultan Mahmud had his goal but Tall Mehmet couldn’t see this. Just before he started his journey back home, he was either poisoned or choked at an inn called Leblebici in İstanbul where he was hosted as a guest. As far as known the murderers were the men of Hacı İsmail Ağa who was the feudal lord of Ereğli. İsmail was probably unaware of the Sultan’s writ and he was angry because a commoner inhabiting his land directly went to Sultan without in-

forming him. Maybe his anger was due to the cancellation of a probable profit source. Whatever the reason was, Tall Mehmet was the first victim of the coal cause. Unfortunately he wasn’t the last victim. The historians are divided into two opposing groups on the reality of this story. While some accept the story, others point to the chronological conflicts in the story and claim the story and its heroes as fiction; excluding Sultan Mahmut II. According to their opinion this story was deliberately faked up in 1930s in order to give hope to the citizens of the young Republic and ignite their nationalism. They say there is no writ either. But whatever they say coal is still where it was meant to be. There are several similar stories too. For example there is an other story about a man from Elvan village (in Ereğli) named Black Hüseyin. It is said that in 1840 he showed the coal samples in his bag to the authorities on the wooden wharf which will be mentioned below. After that these samples are taken to İstanbul and foreign scientists surveyed the Ereğli-Amasra region. There is a similar story to Tall Mehmet from the 17th century Belgium about a blacksmith called Houillos, too. That shows how coal ignites the imagination of people in history.

There are several rumours regarding the origins of the name, Zonguldak. Some say that the future French miners of the region call the region jungle due to the dense forests of the region. The local people used to call the region davdağ which means “greenwood mountain” in Turkish. The combination of these two may be jungledag and in time it may be transformed into Zonguldak. Others claim that the name is transformed from the maps of French miners which refers to a coal zone near a mountain in vicinity named Göl Dağı: Zone de Gouldag. According to the historical records, while Tall Mehmet was living the greatest adventure of his short life, the center of the modern city of Zonguldak was a Black Sea bay near the town of Ereğli in the State of Bolu. The bay had one wooden wharf and was used as harbour for the shipping of the timbers of Middle Black Sea forests to the Haliç dockyards of İstanbul. In the future the coal which was discovered in the region was also going to be shipped from here too. For example there is an Imperial Memorandum dated 1843 about the marketing of the vapur (ferry) coal produced in Ereğli and Amasra and the shipped from this bay.

Coal Powered Steam Boat-Swift Statue of Tall Mehmet in Zonguldak

A Brief History of Zonguldak & Ereğli The importance of the reality of the story may be a matter of discussion but it is certain that Tall Mehmet is a symbol of Turkish mining. Other than his statue, there is even a university called after him in a Black Sea city: Zonguldak. The city of Zonguldak is another symbol of mining in Turkey.

Ottoman Galleon

The word vapur was probably transformed from French bateau à vapeur

which means steamboat. It is known that even in the early times like 1828, when the Ottoman Navy was consisted only of galleons, a merchant named Artemis presented a steamboat named Swift (Sürât) to Sultan Mahmut II. as a gift and Sultan sailed from İstanbul to Rhodes and came back with this steamboat.

Sultan Abdulmecid and the Era of Imperial Management The region and coal remained important during Sultan Abdülmecid, the son and successor of Mahmut. During his time first coal company was founded in the region called Ereğli Coal Mine Company with six partners and started production in 1842. Four years later the number of the partners increased by one with joining of Abdülmecid among them. In 1848 the borders of the basin was identified for the first time. This year is accepted as the offical starting of the hardcoal mining in the country and can be seen in the emblem of TTK (Turkish Hardcoal Enterprises). In the same year by the order of the Sultan the hardcoal basin was given to the Administration of Foundations and was accepted as the property of the Sultan. The management was later given to some British merchants living in Galata with an annual fee of 30.000 pennies. The leasing income was donated to religional foundations. This leasing to British was the first step of foreign dependancy in mining. In 1869 with some regulations in the mining law, the rights of Turkish and foreign mining enterpreises became equal. Back in 1849, the only customer of the British Coal Company was the Navy in those years. In 1850 with the railway equipment and carriages brought from Great Britain, the company managed to built a tram line from Kozlu Basin to the coast. They had equipments and privileges given to them, but the prouduced coal was below 50.000 tonnes per year. This was far below the Ottoman Navy requirements. So on demand of the company; the British engineers, Barclay Brothers and eight mining supervisors were invited to the mines by the Ministry of Foundations. This resulted of an increase in production.

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On June 22, 1853 Russia decided to harden its politics on Ottoman Empire and invaded Wallachia and Moldovia. The European states tried to negotiate between two countries but couldn’t succeed. So Ottoman Empire sent a diplomatic note to Russia but could get no reaction. Onto War of Crimea broke out and lasted two and a half years. Ottoman Army was successful but the Navy was destroyed in the shores of Sinop. On behalf of Great Britain and France this was a thread on the Straits and Mediterranian. The allies didn’t remain unresponsive and with the support of the Kingdom of Sardinia, they joined the war on the side of Ottomans. Because of the primary thread of the Russian Navy on the Straits, they had to overcome them in Black Sea. Using this excuse, in 1854 they demanded the management right of the mines in the Kozlu-Zonguldak regions till the end of the war and used the coal for their Navy needs. During this period the Barclay Brothers built the Zonguldak, Çaydamar, Üzülmez and Kilimli tram lines. With the help of the allied factions, Russia was defeated. By the end of the war the mine again started to operate for Ottoman Navy benefits. The British Coal Company was still in charge of the business and was going to be monopoly till 1865. During this time an autonomous British bank was also founded to support the company.

• Licencing became compulsory. • The transportation issues were regulated. • Dormitories for the workers were built. • The purchasing of the poles for underground was regulated and Ereğli forests were reserved for these poles. • Ereğli became the center of the Basin and here was founded the Ministry of Mining. • A science commision in Kozlu was founded. • Officers and mariners were appointed to the mines and a militarial order was given to the management. • The work hours were regulated. • The working age was stated as between 13 and 50 and only men were allowed to work. • People of 14 towns of Ereğli were forced to work in the mines.

Dilaver Paşa & The Era of Navy Management

In order to increase the production in the hardcoal basin, the workpower and transportation insufficiencies had to be minimized. So, by the order of Sultan Abdülaziz the successor and brother of Abdülmecid, the management of the Basin is given to the Ministry of Navy in 1865 and Admiral Dilaver Paşa was appointed as the Minister of Mines of Empire with an additional title of Governor of Ereğli. Two years later a constitution was declared by the ministry regarding the management of the Basin and mines. This is also known as the Constitutions of Dilaver Paşa and was operated till 1908. Such regulations were established with the Constitution:

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Dilaver Paşa

On May 30, 1876 with a military coup, Abdülaziz was dethroned by Mithat Paşa and Abdulaziz’s nephew Murat was elected as the new Sultan. The unfortunate new Sultan could sit on the throne only for 93 days. He was claimed to have a mental disease. The military had to give the throne to his brother Abdülhamid II. His era was the most restless years of the fading Empire. Rebellions, wars, bankrupts and revolutions… Among all

these chaos, the 1877-1878 OttomanRussia War was the most important event for the faith of mining. The war ended with the victory of Russia. In this war the Ottoman Navy was heavily damaged and as a result of the reduced modernized war ships the demand for coal was also decreased. The Imperial Treasury was also in trouble. The miners tried many ways to minimize the effects of this war on them; even sold their properties, but a few could survive in the business. According to the Constitutions of Dilaver Paşa the abandoned mines were State property so only Turkish miners were affected from this problem. The foreign miners were supported from their countries and they formed alliances among eachother. Thus they survived.

Constitutionalism and the Era of Ministy of Forestry, Mining and Agriculture

During Abdulhamid’s 33 years reign, because of his strict rules he had many opposers. These people then gathered in a political party named İtthat ve Terakki and this party finally dethroned Abdülhamid in 1908. Now it was the time for constitutionalism and the throne was only a symbol now. Also the properties of the Sultan were limited. The party with puppet Sultans were to rule the Ottoman Empire till its collapse. In this era the control of the basin first was given to the Ministry of Public Works. Then in 1909 the Ministry of Forestry, Mining and Agriculture was founded and took the control of the basin. The French were the major group in the Basin now and the French Ereğli Coal Company was the most important company. This advantage helped the French Government to support their future ambitions. In February 1914, in order to maintain electricity requirement of İstanbul, a power plant was built in Silahtarağa. The resource was hardcoal and was shipped from Zonguldak. This system could only survive for a couple of months because in July 1914 what was feared for so long finally broke out: The First World War. The alliances were already decided in this war and the

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Mineral Processing and R&D

Silahtarağa Power Plant

Ottoman-German alliance was signed a month ago. This affected the coal mines too. The War Coal Commision was founded and the management of the basin was given to Germans. The connection between Zonguldak and Silahtarağa continued for some time but when the Russian Navy sunk the trade ships of Ottomans the power plant had to maintain its demand from the little lignite pits around İstanbul with tram lines. In 1916 and 1917 the German geologists and mining engineers worked on the basins of Kozlu, Zonguldak, Kilimli and Çatalağzı and stated that the French Ereğli Coal Company was producing 600.000 tonnes of coal per year. When the war was over in November 1918 there was neither an independent Sultan nor a government. The counry was under the thread of invasion and seperation. French were among the invaders and had a large dominion in Syria and Southeastern Anatolia but they also didn’t want to give up their acqusitions in Ereğli. So that in March of 1919 the French army deployed a battalion of 350 soldiers and started to control the mines. In June 1920 this time they decided to control the whole State of Ereğli but couldn’t succeed. With the opposing of the National Parliament in Ankara and the resistance of the local people of Ereğli on June 21, 1921 the French army in Ereğli had to

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leave from Zonguldak Harbour. This day is still celebrated as the salvation day of Zonguldak. Although the army left the region, the French Ereğli Coal Company continued to manage the operations in the basin till 1937.

The New Republic and Advances in Coal Mining

During the tough days of Independence War the National Parliament in Ankara was also dealing with nonmilitary issues. Mining was among these issues too and many legistations were accepted about mining. Mining was such an important issue for the parliament that during the war about 5000 mine workers were kept in the mining operations and not sent to frontlines for defending the country. In September 1921 the first labour act of the new parlament was about mining: The law regarding the rights of mine workers in Coal Basin.

By the end of 1922 the last remnant of the invaders were wiped out from the country. The victorious commander and the head of the parliament Field Marshall Mustafa Kemal had not shared his Republic idea with the parliament yet, but he was organizing congresses and building the foundations of a young republic. In 1923 between February 17 and March 4 he called for an economical congress in İzmir and in this congress the foundation of national trade banks was accepted. Following this in 1924 Turkish Labour Bank (Türkiye İş Bankası) and in 1925 Turkish Industry and Mining Bank were founded. 1924 is an important year for the Turkish mining industry for an other reason too. This year in Zonguldak, Mining and Indusrty High School started its education. The school continued to serve the nation until 1931. In 1926 and 1927 İş Bankası founded four new Turkish companies including Kömüriş and Türkiş. The following ten years (from 1927 to 1937) were the multinational mining era in the basin. Besides the Turkish and French companies there were also Italian companies in the basin. During this period in 1930 Society of Turkish Mining Engineers was founded. This society is one of the four first members of future Chamber of Turkish Engineers and Architects. Also in 1935 for the exploration of the new mining potentials in Turkey, MTA and for mining facilites, energy production and distribution, Etibank were founded.

Logos of ETİBANK & MTA

Establishment of ETİBANK & the Era of EKİTAŞ

Field Marshall Mustafa Kemâl

Mustafa Kemal Atatürk visited the mines in the region in these ten years and he decided to nationalize the mining sector. So in 1935 on his demand

Etibank and in 1937 under Etibank the Ereğli Coals Enterprise (EKİTAŞ) were founded. After buying all the shares of French and Italian compaines, EKİTAŞ was anounced to be the only owner of the rights and authority of the mines in the Ereğli Basin. EKİTAŞ continued to control the whole operations untill the foundation of Turkish Coal Enterprises (TKİ) in 1957. The same year Zonguldak was connected to Ankara by railway. There were many railroads in the region indeed but most were built only for mining facilites and most of these were compatible only with trams. These lines had to be adapted and linked to main railroads built by TCDD (Turkish State Railways). To support this necessity in March 1941 Karabük Iron and Steel Factory (Kardemir) was founded and the first national iron plate was produced. Kardemir accelerated the innovations and EKİTAŞ managed to build electricity, water, road and railway networks all around the region. In November 1948 by three British companies ( Metropolitan-Vickers, Babcock and Wilcox & Holloway Bros) Çatalağzı Termal Plant (ÇATES) was built and started to operate. In 1950 in Filyos a firebrick factory was built to produce construction materials to be used in mines. Such investments in Zonguldak needed to be protected so EKİTAŞ formed coal regiments for the security of the region and facilites. In 1939 another enterprise was founded by ETİBANK in Manisa. The already known and operated lignite mines of Tavşanlı, Değirmisaz (Kütahya) and Soma (Manisa) were reorganized under

Western Lignite Enterprise (GLİ) based in Soma. The lignite basin in Soma was discovered in 1913 by Osman Ağa from Darkale. Same year two partners called Ragıp and Çimeris founded a company and supplied the army demands during the First World War. Later the mines were operated by French companies until 1922. From that time till the foundation of Etibank, many Turkish companies operated the mines and one of them was the famous journalist and newspaper owner Yunus Nadi. The discovery of lignite in Tavşanlı on the other hand is said to be even older than Soma. The discoveries are dated back to 1906. The discovery was referred to a villager from Tavşanlı named Mehmet. Also known as Akkaş Mehmet, he will later add the surname Tunçbilek after his name. Later the Tavşanlı Mine was going to be called as Tunçbilek Mine to honour the discoverer. In 1978 some mines under the management of GLİ are reorganized under the management of ELİ (Aegean Lignite Enterprise).

low capacity of the mining facilities compared to EKİ era. Bu after EKİ, the accidents and casulties were recorded. Some major accidents and numbers of casulties are as follow: • Explosion in Kozlu-Kasaptarla pit in 1939 (23 casulties) • Explosion in Çamlı pit in 1942 (63 casulties) • Explosion in Kozlu-İncirhamamı pit in 1947 (53 casulties) Same year the Labour Union of Ereğli Coal Basins Workers was founded but the accidents continued. • Explosion in Kozlu-İncirhamamı pit in 1954 (13 casulties) • Explosion in Gelik pit in 1955 (55 casulties)

The Logo of TKİ

Yunus Nadi

Akkaş Mehmet (Tunçbilek)

Before EKİTAŞ (later the name was converted to EKİ) the management of the mines were dominantly under the control of foreigners so we do not know much about the accidents or casulties. An other reason for this is the

In 1956 the Armutçuk Coal Enterprise (AKİ) was founded. This enterprise was going to be TTK (Turkish Hardcoal Enterpise) in the future. But in 1957 AKİ, EKİ and GLİ were reorganized under one management and the new organization was called as Turkish Coal Enterprises (TKİ). The industrial activities in the region accelerated after that. For example in1962 Bartın Cement Factory and in 1965 Ereğli Iron and Steel Enterprises (Erdemir) were founded.

Afşin-Elbistan Lignite Basin and Thermal Power Plant

First Turkish Iron in Kardemir

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During these innovations in Zonguldak, MTA had a new lignite discovery in Eastern Anatolia. The lignite zone was in Afşin and Elbistan towns of Kahramanmaraş. The calorification of lignite in this zone was poor but the reserves were widespread. So TKİ got involved and together, the two establishments initiated a power plant project in

the area in 1968. With 5000 Mw capacity the plant was planned to be the largest energy producing facility in Turkey. The construction of the plant started in 1973. The plant was constructed in four sectors. The first sector started to produce electricity in 1984. The plant was the highest public investment in the history of Turkey and was fed from the Kışlaköy lignite pit. Following this Afşin-Elbistan A Thermal Power Plant, a second plant was required. The new plant’s construction started in 1996. Afşin-Elbistan B Thermal Power Plant started electricity production in 2004.

accidents and numbers of casulties in the TKİ era are as follows: Explosion in Kozlu-İncirhamamı pit in 1960 (25 casulties) Explosion in Armutçuk pit in 1967 (17 casulties) Explosion in Kozlu-İncirhamamı pit in 1968 – 1974 (34 casulties) Explosion in Armutçuk pit in 1983 (103 casulties) Explosion in Kozlu-İhsaniye pit in 1983 (10 casulties) Explosion in Kozlu pits in 1992 (263 casulties)

References • www.taskomuru.gov.tr • www.afeltesa.gov.tr • www.gli.gov.tr • www.eli.gov.tr • www.kardemir.com • www.erdemir.com.tr • www.etimaden.gov.tr • www.tki.gov.tr • www.ereglihakimiyet.com • Yrd.Doç.Dr. Alaaddin ÇAKIR: Zonguldak’ın Madencilik Tarihi ve Kültürü Ders Notları (Kasım 2013) • Cevat Ülkekul: Taş Kömürü Havzasında (İşletmelerinde) Bahriye Nezareti Dönemi (1865-1908) ve Dilaver Paşa Nizamnamesi • Murat Kara: Osmanlı Devleti’nin Son Döneminde Ereğli Kömür Havzası (1829-1920), History Studies (International Journey of History) ISSN: 1309 4173 (Online) 1309 - 4688 (Print) Volume 5 Issue 1, p. 223-250, January 2013

A historic (1800s) view from port of Zonguldak. Kışlaköy Pit

Soma & Ermenek Incidents

Afşin-Elbistan Power Plant

Founding of TTK and Recent Situation of Coal Mining This massive growth in both lignite and hardcoal required a new organization. So in 1984 for the operations of hardcoal in Zonguldak, Turkish Hardcoal EnThe Logo of TTK terprises (TTK) was founded under TKİ. TTK had the control of a couple of mines in the basin but in 2001 the enterprise had control on all harcoal mines. In 2003 the Ministry of Energy and Natural Resources started to control the enterprise. Unfortunately in these progressive years of Turkish mining the accidents and casulties were also increasing. Some major

The list continues in time both for the state mines and those of the private enterprises until 2014 Soma and Ermenek tragedies. On May 13, 2014 in Soma coal mine a fire broke out from an electricy problem and 301 miners choked due to fume. This was the highest number of casulties in a mine accident in Turkey. After five and a half months this time in Ermenek mine in Karaman, due to water flood 18 miners were trapped underground and none could be saved.

AUTOBIOGRAPHY

sometimes there are no words left to say...

Even after these two very recent incidents, the mining accidents and casulties are still not over. Although it is said that death is natural in mining, to honour the pioneers of coal mining and those who sacrificed their lives it is our duty to value that life over coal.

Arda Ayhan was born in 1977, Ankara. After graduating from Hacettepe (BS) and METU (MSc) Geological Engineering Departments and participating in multidisciplinary projects in METU, he started to work for INTA Spaceturk. In 2006 he was employed by TÜPRAG and in 2011 by ESAN respectively. He worked as a GIS specialist during this time. Arda Ayhan is still working as a freelance geoscientist and is a dedicated collaborator of the MAYEB family.

Spring 2016

Profile www.miningturkeymag.com

Sandvik Bit Grinding Machine Is Operated With Full Performance at Tüprag A.Ş. Efemçukuru Gold Mine Sometimes we have such a journey that makes us excited like little children. Our trips to Tüprag Efemçukuru Gold Mine operated near Efemçukuru Village, Menderes District, İzmir are the favourite ones in this respect for which we have experienced such feelings. Green and peaceful nature welcomes us at the mine suited highly above sea level although it is located within the borders of Izmir. While getting filled up with green during your trip in forest to reach the mine, you have the opportunity to see the unique sea coast of İzmir from distance. Vineyards that you pass along the way give a novel touch to your trip. Tüprag A.Ş. Efemçukuru Gold Mine located in the said wonder of nature is managed within a concept where mining and agriculture are carried out together with an understanding which can be shown as a case study to the whole world. Viticulture is performed by Tüprag Metal Madencilik in an area of 6.200 acres at the mine site where ore production is carried out by underground mining. Famous Efemçukuru grapes are cultivated with the responsible team of Tüprag Metal Madencilik for the agricultural affairs. Maximum attention is paid to environment and human life in Efemçukuru where such an important agricultural operation like viticulture is carried out. Tüprag, being aware of the fact that it has to perform safe mining activities is seen to perform a successful operation at Efemçukuru in all respects. It is impossible not to admire the running operation at this facility where health, safety and environment procedures kept at the highest level of importance, that we witnessed. The purpose of our visit to Efemçukuru

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Gold Mine that we have already visited twice as the team of Mining Turkey magazine was to see Bit Grinding Machine manufactured by Sandvik on site, which is the leading machinery-equipment supplier of mining industry and to get to know the system established for sharpening. Drilling tools used in drilling-blasting works constituting the basis of the production in the underground mining industry comes to the forefront as the most expensive products taking the biggest part in expenditures. While Sandvik provides its customers with a substantial amount of savings in consumables, it experiences the pride of winning their confidence. We got the opportunity to make a conversation with the related parties in Tüprag Efemçukuru Gold Mine in order to learn the details for the matter concerned and we gave ear to related experts about the significant points. We talked about the details on “Bit Sharpener and Operation System” in our conversation with Ergün Altıntaş, Efemçukuru Gold Mine Operating Manager, Hüseyin Aytekin, Mine Site Supervisor

and Tuğçe Gürkan, Sales Engineer of Sandvik Mining Rock Tools. Hüseyin Aytekin, Mine Site Supervisor stated that bit sharpener was put into operation in 2014 and that the said machine has already been available but it was put into service following a preliminary preparation. Tuğçe Gürkan, Sales Engineer of Sandvik Mining Rock Tools stated that there is a great number of mining operations using this system and that Efemçukuru Gold Mine is one of the most successful examples of them. Gürkan stating that considering the causes and results of the abrasion of bits, advantages offered by grinding machine show themselves clearly said that this operation comes into prominence just because gain is more than 50% following an organized and planned work. Gürkan said “Bit expenses of the operation decreased approximately 50% following the commissioning of the said machine. Furthermore better quality holes without hole deviation are drilled thanks to bit grinding. One of the most important things in drilling applications is penetration rate. One of the biggest ad-

vantages of bit sharpening is keeping penetration rate continuously high. Thanks to this advantage, efficiency of production operation in Efemçukuru also is also highly increased. One of the contributions of Efemçukuru to this system is the casing cabinet constructed later. This cabinet shows to what extent Efemçukuru Operation pays attention to occupational health and safety. The said cabinet is not a standard feature for the equipment. Even if the cabinet is not available, our system is located in a superior position in terms of occupational health and safety but Efemçukuru Gold Mine made a fine contribution to the operation with this cabinet. We observed an operation conducted in a very organized way with respect to cabinet system and attention and continuous tracking system of the operators using the machine.” Aytekin also remarked that availability of grinding machine in the operation is not sufficient alone and emphasized that there should be an organization for grinding and reusing the bits; said “There are personal lockers for jumbo operators next to the containers where bit grinding machine is located. When the diameters of the buttons of the bits decrease by one third, grinding should start. It is very difficult to make measurements continuously in order to reach the said rate in mine conditions. Our operation developed some methods to overcome this situation. We took an average value as a basis at the end of related tests and we car-

ried out grinding operation after different meters of drilling for every bit. Although relevant distances change up to the diameter of bit, we have determined an average value of 120 meters. Bits are directed to grinding machine for grinding process following every 120-meter excavation. Such 120-meter distance may also vary based on the characteristics of the rock excavated. It is all up to the experience of Jumbo operator. When jumbo operator says “this bit should be ground”, bits are taken out. Jumbo operators leave the bits after the shift to lockers labeled with their name tags. Bit grinding operator conducting the relevant process at one shift per day examines the said cabins and decide whether bits are ground or not and continues the application. If bit is able to be ground, it takes and grinds it and then put it in the locker of jumbo operator and process continues. If bit is unable to be ground, it is scrapped and such bits are accumulated in the special container which complies with the related rules&regulations established by Sandvik. At the last stage, filled containers are reported to be collected and the scrapped bits are sent to Sandvik for recycling.” Aytekin giving information about the trainings given to operators remarks the data obtained as a result of the follow-ups and added “Previously our operation have a training program for all personnel entering to the mine site. This training is an essential process in our operation. Considering the bit

grinding equipment specifically, studies supported with engineering data are of great importance for this type of works. The operators are subjected to a training as a result. While our training department conveys information on new data gathered during the tests to the operators in the process; they find the opportunity to comment on and experience in this valuable information also.

We took technical support from Sandvik following the commissioning of bit grinding machine. We benefit from the experience of Sandvik to the end. Refresher trainings are still being given periodically by Sandvik following the first training given to the operators. The purpose herein is to be able to follow the experiences gained by them while observing the current status of operators. Related feedbacks are also very important for us. Most important factor to be efficient in bit grinding appears in the success of operators. Experiences gained by operators bring the use of right bit in the drilling operations where different parameters are in question. Our operators may well become capable of giving training for the subject matter in the course of time.” Sandvik representor Gürkan interrupting the conversation at this point said “we stand by our clients always as Sandvik with our trainings and technical support. We are always in the field to solve all kinds of problems of our customers from commissioning to maintenance and from trainings to our strong supply chain. One specialist directed by Sandvik for bit grinding provided training to the operator determined by the client for 3 days following the commissioning

Spring 2016

of the machine. Bit grinding operation does not take long periods of time. It is sufficient for an operator to allocate a little part of its shift to grinding.” We learnt that the biggest concern for the client and the commissioner was thought to face some difficulties on breaking the habits of old-style operators during the commissioning of this system. Aytekin informing us about this said; “Training department becomes a part of the operation at this stage. As a result of the continous technical support given by the training department created the values aimed. Habits were broken by the use of continous daily supports. Comparing the data that we took first and the ones we take now we may observe the results of the said supports. This is an indicator how previous habits are broken in the course of time. Most critical words herein are “continuous training and tracking”. Considering the data that you collect during the tracking process we have the opportunity to see the misuses and deficiencies. Since you may assess each operator one by one thanks to the data collected, you may correct the mistakes and deficiencies by explaining them to that specific operator. The efficiency of the system increases by applying these techniques. Hüseyin Aytekin, Mine Site Supervisor stating that one bit may be used almost three times for drilling, said that they were using the bits only one time efficiently and then scrap them before commissioning of grinding machinery. He emphasizes that working with blunt bits damages the drilling system of jumbo driller. Gürkan interrupting the conversation to give detailed information for the matter concerned said “Buttons of bits are of very importance, because first thing to contact with the rock is the button of the bit. Drilling system of jumbos generate more energy than the one generated by a jet plane during operation and in the event that energy is not transferred to rock correctly, it returns back through the drill string. Energy without transferred to rock and transmitted back is the worst thing seriously damaging the drill string, drifter and machine at most. As

Spring 2016

a result, opening of couplings, damage in the machine and drifter may be observed. Preventing them is one of the advantages of grinding. Aytekins says on this subject “Since we started grinding operation we have been receiving positive feedbacks from mobile maintenance department keeping technical data of machinery about the problems experienced in the jumbos. Technical team reports a better performance as compared to before. We may consider the subject in terms of not only bit but also machinery. So there is a serious decrease in the maintenance-repair costs of jumbos with the operation of new bit sharpener. Ergün Altıntaş, Efemçukuru Gold Mine Manager who offered his opinions for bit grinding remarks the moral part rather than material part for the matter concerned while talking about the culture installed said “Actually I would like to bring the spirituality rather than materiality of the subject. Jumbo operators didn’t have too much information on bits. Actually a new culture has been installed to them with this system. It is an important benefit for us. Moreover grinding the bits prevents the scrap bits thrown and forgotten underground. Even though grinding of the bits has no economic return, it is very important to prevent it from being mixed in the ore product processed. When the bits which are forgotten underground and mixed in production process in any way, they may damage the liner of the crusher if got caught by it. Life of liner may be shortened and it may affect the crushing performance. For instance we had to replace the liner once in 1.5 month, which should be replaced once in 2 months. What matters is not only to establish this system but also to manage it in a sustainable manner. We managed to make the system completely operational within one month of the establishment. We saw that what we planned before beginning this work and what we are achieving now match up with each other. One of the factors affecting us in the use of bit grinding was the fact that the Sandvik being our supplier company for the bits was encouraging us with this idea. If

any other company had come and proposed us on bit grinding, we may keep the idea at a distance. What encouraged us was the fact that the Manufacturer coming to us with such an idea for their own products. At the end of conversation Gürkan said “Together with this project Sandvik proved that it is an innovative company paving the way for the mining in Turkey and taking the sector one step further. We have some global standards and our purpose is to render service. We are glad to increase the operational productivity of the mine and to fulfill our environmental responsibilities with this system being first in Turkey. We are also proud of ensuring one of the most important goals of Sandvik being a leader with innovation in this operation with this system. We raise awareness by putting our signature to a study to take the sector one step further. We can say that missions of Efemçukuru Gold Mine and Sandvik match up perfectly with each other. As Mining Turkey magazine team, it was a great experience for us to follow the works of two leading brands in our sector and to observe their communication, sharing and friendship on site during our visit. We had the opportunity to observe what Efemçukuru Operation has done for the matter which is not actually too difficult but for which a little effort should be consumed in changing the habits. The fact that we listen to the experts in their field about the cultural achievements as well as the economic achievements obtained as a result of this effort enabled us to comprehend the significance of the subject matter. But we saw with the support of a company like Sandvik that Efemçukuru Gold Mine made the related work more functional with its own touches in the project carried into effect. Organization continues to work perfectly with the gainful synergy arising out with the efforts of both firms.

TRUST THE NUMBERS SANDVIK 365. ROCK TOOLS YOU CAN COUNT ON. Up to 80 percent longer grinding intervals*. Up to 60 percent longer bit life*. A unique, innovative design with a new, more wear-resistant cemented carbide grade to deliver unprecedented improvements in durability, productivity and safety. We’ve reinvented the top hammer drill bit to create a rock tool that delivers the long life you expect. Our ‘top center’ bit features a raised front, making room for more inserts as well as larger flushing holes and bailing grooves. More gauge buttons increases resistance toward diameter wear, extending bit life. Coupled with GC80, our resilient new cemented carbide grade, you’ll drill more meters per shift than with a standard bit, thanks to fewer bit changes and faster penetration rates. Learn more about how our rock tools can make your drilling more productive and profitable, 365 days a year, at mining.sandvik.com/en/services.

*Test results are to be considered as results reached under certain and controlled test conditions. These test results should not be treated as specifications and Sandvik does not guarantee, warrant or represent the outcome of test results in any or all circumstances.

MINING.SANDVIK.COM

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İzmir/ Elmadere (2011-Current) :

ADULARYA :

Total 32.000 m drilling

•

1.350 m deep exploration coring

Eskişehir/Koyunağılı (2007-2009) : Total 67.000 m drilling

Explore the deepest.