Mining Turkey Magazine Number 4 by Madencilik Turkiye (Mayeb Ltd.)

ISSN: 2146-9423

Mining & Earth Sciences Magazine 01 March 2013 | Vol 2 | Number 4 | www.miningturkeymag.com

• A Complete Overview of Turkey’s Copper with Park Elektrik’s Madenköy Mine

• Turkey: The Rising Star in Global Mining Interview with M. İlker Aycı, President of ISPAT

• In the Shadow of Die-Hard Legal Concepts

contents Mining Turkey is published biannually by Mayeb Madencilik ve Yer Bilimleri Basım Yayın Dağıtım Ltd. 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 - International Relations O. Çağım Tuğ cagim@miningturkeymag.com General Coordinator Onur Aydın onur@madencilik-turkiye.com Administrative Affairs Volkan Okyay volkan@madencilik-turkiye.com Graphic Design M. Anıl Tuğ anil@madencilik-turkiye.com Merve Mallı merve@ideakup.com Web Technologies Bilgin B. Yılmaz bilgin@madencilik-turkiye.com Legal Adviser Av. Evrim İnal evrim@madencilik-turkiye.com Academical Advisers Prof. C. Okay Aksoy Prof. Erol Kaya Assoc. Prof. Ali Sarıışık Assoc. Prof. Hakan Başarır Assoc. Prof. M. Emin Candansayar Assoc. Prof. Melih Geniş Assoc. Prof. Melih İphar Assoc. Prof. Niyazi Bilim Assoc. Prof. Nuray Demirel Assoc. Prof. Talip Güngör Advertising Sales reklam@madencilik-turkiye.com Annual Subscription Enquiries abonelik@madencilik-turkiye.com Printhouse Atalay Matbaacılık Büyük Sanayi 1. Cadde Sütçü Kemal İşhanı No: 7/236-237 İskitler - Ankara / Türkiye Circulation 3000

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2....... FROM THE EDITOR 4....... TURKISH MINING SECTOR NEWS 14....... SANDVIK MINING TURKEY - EVALUATION OF 2012 AND EXPECTATIONS FROM 2013 17....... INVICTUS GOLD LTD - Tamer Gezbul 18....... ORTADOĞU DRILLING LTD 20....... A COMPLETE OVERVIEW OF TURKEY’S COPPER PRODUCTION AND ADVANCED STAGE PROJECTS - Mining Turkey Magazine 28....... PARK ELEKTRİK’S SİİRT MADENKÖY COPPER FIELD - Ciner Group 34....... TURKEY: THE RISING STAR IN GLOBAL MINING - M. İlker Aycı 40....... TURKEY TAKES A LEADING ROLE IN NATURAL STONE RESERVES - Mehmet Çapik

48....... 52....... 56....... 60....... 68....... 72.......

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MINOR, CRITICAL AND STRATEGIC: ANTIMONY - Sait Uysal HISTORICAL MINING AND PROCESSING CENTERS IN THE VAN PROVINCE OF EASTERN ANATOLIA: REDISCOVERED - Yusuf Ateş THE POWER OF PLANTS FOR GOLD PROSPECTING - Colin E. Dunn STRATEGIC PLANNING & VISION - THE KEY TO SUSTAINABILITY IN MINING - Alan E. Clegg IN THE SHADOW OF DIE-HARD LEGAL CONCEPTS - Cemâl Dursun THE PROCUREMENT TRIO: IMPROVEMENT OF PROCUREMENT BY STRATEGIC SOURCING, SUPPLIER RELATIONSHIP MANAGEMENT AND P2P (PROCURE-TO-PAY) PROCESS DESIGN - Alper Günaydın NEED FOR A NEW AMENDMENT? - Şebnem Önder, Ayşe Eda Biçer BUSINESS INTELLIGENCE IN MINING - Sean Dessureault, M. Mustafa Kahraman

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

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

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Editor www.miningturkeymag.com

Where Does the Sector Go with the Regulations and Legislations as the Mining Boom Continues? O. Çağım Tuğ | cagim@miningturkeymag.com Mining in Turkey has been experiencing a “mining boom” for nearly the last ten years due to providing sustainable mining activities by particularly gaining foreign investors’ trust and subsequently a significant entrance into the sector made by the local investors who have not been involved in mining but followed the example of the foreign mining companies. This boom in the sector fuelled in particular by the record rise in precious metal prices has forced the country to update its Mining Law and regulations. Although the amendments introduced in the Mining Law No. 3213 in 2010 offered solutions to certain key issues, they also brought about some new problems. Moreover, the legal environment subsequent to the amendments to the legislations and permissions has set a conundrum for mine manufacturers. In regard to this particular matter, the articles titled “In the Shadow of Die-Hard Legal Concepts” and “Need for a new Amendment?” will provide you with an overview of the legal environment. This phase, indeed, should be assessed as a part of Turkey’s modernisation efforts, and the importance the country places on mining should be duly recognised. The adjustments that are attempted to be made in a fast and efficient way are currently unable to deliver satisfactory results; nevertheless, the sector contin-

ues to change at a rapid rate, and swift steps are taken to rectify mistakes. Mining holds a significant place in the economic policy of the current government, which aims to increase the cash flow and added value provided by mining. Under the circumstances, mines are considered as sources expected to produce profit before commencing production, whereas the work and regulations rather focus on obtaining permission and licence. However, mining is an entire process from exploration to end of production and departing the site. Therefore, explorations should be encouraged, and more mines should be enabled to go into production under the right conditions. I believe that the government of Turkish Republic will quickly address the shortcomings and support exploration and project development activities in the forthcoming period, and that even more than the target added value can be obtained from the projects that proceed to production stage. Also, we are going through a phase in which the companies that have recently entered or will soon enter the sector in Turkey need to pay careful attention to finding local partners. As I have pointed out earlier, the big companies that achieved remarkable success in different sectors have made a brave attempt in entering into the mining sector. As

you can see in the news section, almost all foreign companies are teaming up with local partners or experienced and renowned experts, who have been resident in Turkey for many years, serve in their Board of Directors. And it does not seem very unlikely that in the future, the giants of the international sector might come to Turkey and take over the companies that have succeeded in going into production. In the 4th issue of Mining Turkey, we intend to bring you the developments in the Turkish mining sector over the last six months. Our copper and antimony inventories will inform you about these strategic and critical metals, while the interview with Prime Ministry Investment Support and Promotion Agency of Turkey (ISPAT) President M. İlker Avcı will give you valuable information on the investment opportunities in the country. I hope that the following articles will spur your interest, and I welcome your suggestions and contributions for Mining Turkey’s next issue. “We offer our special thanks to Afrasia Mining & Energy Consulting AŞ Chairman Alan M. Clegg who has taken on the task of international editing for this issue and significantly contributed to the preparation of the journal.”

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01 March 2013

News www.miningturkeymag.com

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

other mining products with 123 million USD of exportation. In 2012, China was in first place with 1.8 billion USD of exportation, with the 20% increase compared to the previous year, among the countries to where sectoral export was carried out. China was followed by the USA with 330 million USD (6.80% increase), India with 132 million USD (28.22% increase), Italy with 122 mil-

lion USD (1.14% increase) and Iraq with 119 million USD (20.73% increase.) Ferro Alloys and Other Products Natural Stones Metallic Ores Industrial Minerals Dispersion of Mining Export by Product Groups in 2012

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

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

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

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

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

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

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

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

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

SOFTWARE IN YOUR MIND Imagine a software, which handles all the processes of ore body and mining operations, brings you quickly the vital information and does the required works.

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

ditional on the conversion of six exploration licences to two operation licences, which are currently under application and are expected to be issued before the end of the first quarter of 2013 and other customary conditions. After the agreement, Centerra released an initial resource estimate and reserve and resource update on February 2013. According to the release, the company outlined a new resource estimate of

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

Empire Mining Changed its Name to

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

required to take any action in connection with the change of name; physical share certificates of Empire Mining Corporation will remain valid share certificates of Columbus Copper in full force and effect. According to the company, the changes

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

Dedeman is to Take Loan 100 Million USD for Upcoming Mine Investments Dedeman Holding signed a loan agreement of 175 million USD with Denizbank its future investments mining and tourism sectors in January. In his statement, Dedeman Holding CEO Murat Dedeman indicated that the new collaboration with Denizbank has to do with the public offering of business lines developed under the umbrella of Dedeman trademark and further reinforcing the cooperation with do-

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

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

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

01 March 2013

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

the studies carried out, in August, commercial molybdenum concentrate was produced in Turkey for the first time. This is considered to be a significant development in the Turkish mining sector.

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

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

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

Mine Permitting Proceeds at Ariana’s

Red Rebbit Gold Project Ariana Resources plc., the gold exploration and development company focused on Turkey announced the approval of forestry permits by the Prime Ministry and issued by the Department of Forestry for the Kızıltepe Sector of the Red Rabbit Project on 4 December 2012. Following the approval, on 4 February 2013 Ariana announced the submittal of Environmental Project Summary Document to the Ministry of Environment and Urban Planning for the Kızıltepe Sector and formal process for the permitting of the mine has been initiated with Environmental Impact Assessment positive certification

expected no later than the beginning of Q4 2013. According to interim feasibility results published in October 2012 demonstrated attractive economic fundamentals are achievable at Kızıltepe. Combined reserve in designed pits at the Kızıltepe Sector of the Red Rabbit Gold Project reached 1.1 million tonnes at an average grade of 3.1 g/t gold and 39.8 g/t silver, corresponding to 115,460 oz Au and 1,468,200 oz Ag. Ariana announced positive drill results at its Salınbaş and Ardala projects in Febru-

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

Tenders for Thermal Power Plants of

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

01 March 2013

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

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

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

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

IVG

INVICTUS EXPANDS INTO TURKEY • Exploring the Himmetdede South Gold Project next to Koza Gold’s Himmetdede Mine. • Fast, effective exploration programme managed by a skilled team. • New technical approaches to soil geochemistry and geophysics. • Negotiations in progress to acquire new projects. • Looking for new opportunities in all commodities. • Contact Tamer Gezbul at Invictus Gold’s Ankara office +90 530 113 3220.

Non Executive Chairman: Peter Unsworth Managing Director: Dr Mike Jones Technical Director: Michael Busbridge Non Executive Director: Richard Basham Managing Director, Turkey: Tamer Gezbul

Major shareholder: Impact Minerals ~75% Options:

INVICTUS MADENCİLİK SAN. VE TİC. A.Ş.

Mustafa Kemal Mah. Dumlupinar Bulvari Tepe Prime B Blok No: 266/130 Çankaya, Ankara Turkey Tel: +90 312 286 1023 Email: tgezbul@invictus.com.tr Web: www.invictusgold.com.au

IVGOA

INVICTUS GOLD LIMITED

ABN 34 145 891 907 309 Newcastle Street Northbridge WA 6003 Australia Tel: +61 8 6454 6666 Email: info@invictusgold.com.au Web: www.invictusgold.com.au

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

Menderes project, located 20 km from the provincial capital of İzmir, western Turkey, consists of 62 km2 in a high potential epithermal gold environment. Frontline Gold made another release on Menderes project and announced that the final payment on the property option agreement with ENA Mad. Tic. ve Nak. Ltd. Şti press released on August 25th,

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

VTG Holding’s Second Coal Mine in South Africa Is Now Operational Sustaining its coal production in conjunction with its partner in South Africa, VTG Holding has put its second coal mine into operation. The company raised its turnover up to 205 million USD in 2012 upon producing 4.5 million tons of coal. In the press conference organized in the South African facility as part of Schoongezicht Mine’s grand opening with a view to reviewing the sector activities, VTG Holding’s CEO Gökhan Kantarcıgil made several statements in December 2012. Upon pointing out that VTG Holding has become a substantial manufacturer in South Africa, a leading country in mining sector around the globe, Kantarcıgil noted “In six years, we have managed to acquire a share of 1.8% in the total annual coal production of the country. Our goal is to become a global company with its origins in Turkey as we carry out mining activities with an understanding of sustainability. Our short-term objectives include significant growth in the mining sectors of both Turkey and South Africa. In the medium term, we aim to take part in mining projects in Colombia and Mozambique. In the long run, we plan to grow by taking over companies in countries which stand out in the mining sector such as Canada, Australia and the USA.”

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Upon the commissioning of Schoongezicht Coal Mine in South Africa, VTG Holding which initially set out for its mining activities in South Africa and subsequently included Turkey and Colombia in its portfolio, now has 2 mines on production. 40% of the production is exported to Turkey, the UK, France, India, Pakistan and Eastern African countries. Referring to the “clean coal” produced in the South Africa facility in line with the European Union standards, Kantarcıgil suggested that they managed to bring the level of hazardous emissions of burning coal even under the standards set out by the European Union, by virtue of the “coal washing unit” installed in the facility, which ensures 67% water and energy efficiency compared to average initiatives. Kantarcıgil noted that VTG Holding has been carrying out initial exploration activities for iron ore, platinum, gold, coal, manganese and chrome in 175 sites in South Africa. VTG Holding, performing its activities in Turkey via its subsidiaries Oremine Mining, VTG Nikel, VTG Copper and VTG Coal, took over in 2011 the Çaldağ Project carried out in Turgutlu district of Manisa province which bears the largest nickel reservoir in Turkey. Pointing out that Çaldağ Project whose reservoir has been testified in line with the international standards, is the only

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

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

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

Kızıldağ project), which have been the subject of past resource statements and a preliminary economic assessment in September 2011. As part of Mediterranean Resources’ plan to make the Kızıldağ project self-funding and to also “Turkify” the project, the company will be incorporating an as yet unspecified company in the Ramsey Group as a 20% shareholder in Akdeniz, and a further 5% stake will be in the hands of

Turkish Construction Company NTF

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

be determined, instead of operating cash flow from Inlice in 2013, although despite the expressions of interest and several early offers, it must be noted that sale on satisfactory terms cannot be guaranteed. Before the proposal that both parties monetize their investments, GBM Minerals Engineering Consultants undertook a review of both the 2010 Feasibility Study on the Inlice project and the contents of an Environmental Impact Assessment. Incorporating a revised capital cost of

25.9 million USD, the all-equity, post-tax NPV at a 10% discount rate is 17.5 million USD and the IRR is 178% on a mine life of two years. This return was based on a reserve of 59,600 oz comprising 0.63 Mt oxide ore at a grade of 2.36 g/t Au and 0.47 Mt of unconsolidated talus ore at a grade of 0.79 g/t Au. Stratex is still planning to be in production during H2 2013 at its Altıntepe project, where the Company is carried to production by Turkish partner Bahar Mining.

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

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

Underlining the world’s most advanced technologies employed in Kışladağ Gold Mine for production, Hakan Ünal indicated “Our aim is contribute more and more to the production, the economy and employment. Kışladağ Gold Mine is titled as the biggest gold mine in Europe based on the amount of gold produced annually. The mine, in addition to making a major contribution to both national and regional development, was at the top of the list by outdistancing other companies in 2012 in terms of providing employment in Uşak province upon achieving a local employment of 80% and currently employs over 1000 people.” 01 March 2013

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

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

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

EXPLORATION GOES ON AT CEVİZLİDERE PROSPECT

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

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

Tunçpınar Madencilik authorities stated to our magazine that the exploration program continues at the company’s asset and one of the Turkey’s most promising copper deposit Cevizlidere prospect at Ovacık - Tunceli. According to Tunçpınar’s PR Manager Hacı Karakuş’s statement to Hport, there are still numerous works to be accomplished to clarify the edges of the mineralization. Following this work, some drilling programs have to be done to reveal the mining site and then a feasibility study has to be accomplished. Karakuş continued “We are not planning to produce gold in this prospect because the gold

mineralization is low grade. Our company informed its legal liability about the subject to the relevant institutions, organizations and representations. Human health, environment and protecting sentimental values are very important for us. Due to moral responsibility, environmental and community values will be protected along with a successful practice of actual laws, legislations, international standards for a sustainable mining activity.” and show the company’s sensibility. Tunçpınar Madencilik is a joint-venture of Çalık Group and Alacer Gold. According to an equal shares agreement, which comprise this prospect along with 15 projects in 2011, Çalık Group and Alacer Gold gave a start to Tunçpınar Madencilik at Cevizlidere prospect. At the prospect, it is estimated to be 450 million tonnes copper reserve with % 0.4 Cu along with 0.11 g/t Au. 5,000 meters drilling has been accomplished at the prospect so far and the mineralization shows signs of extensions along the mineralization and to the deep.

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

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

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

29.5 Tons of Gold produced in 2012 1.7 billion USD worth of 29.5 tonnes gold have been produced in 2012 in Turkey. In his statement, Chairman of Gold Miners Association Ümit Akdur suggested that Turkey is expected to increase its total

01 March 2013

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

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

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

tonnes of pure sodium, processed. The facility has an annual sodium sulfate production capacity of 150,000 tonnes. In his statement, company’s CEO Reha Kora indicated that the facility which embodies a number of international precursors in technical and many other aspects, currently has a daily production capacity of 400 tonnes. Kora emphasized that ‘’glauberite’’, the raw material for sodium sulfate, is produced in facility via solution mining without harming any land forms, whatsoever. Indicating that the facility

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

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

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

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

Record Rise in Koza Gold’s Reserves Koza Gold Inc. has announced a record rise in its country-wide reserves for the year 2012. In the statement made to İstanbul Stock Exchange (ISE), as of 31.12.2012, their resources had reached up to 12.6 million ounces while the reserves had hit 3.7 million ounces. As of the end of 2011, company had 11 million ounces resources and 2.3 million ounces reserves. Considering the

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

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

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

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

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

01 March 2013

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Sandvik Mining Turkey - Evaluation of

2012 and Expectations from 2013 EVALUATION OF 2012 Sandvik is a global industrial group with advanced products and world-leading positions in selected areas - tools for metal cutting, equipment and tools for the mining and construction industries, stainless materials, special alloys, metallic and ceramic resistance materials as well as process systems. Sandvik Mining and Construction was one of Business Areas within Sandvik Group providing solutions especially to underground and surface mining and construction (quarrying, projects and recycling) customers. Sandvik Mining and Construction was restructured in 2011. The two business areas have been working separately since 1st of January 2012, as Sandvik Mining and Sandvik Construction. In line with this global strategy, Sandvik Mining and Construction in Turkey also restructured. Sandvik Mining Turkey moved to their new office and has been operating as a separate Business Area. Here are the outstanding activities of Sandvik Mining Turkey in 2012.

TÜPRAG METAL MINING (ELDORADO GOLD) CG850 GYRATORY CRUSHER ORDER CG850 Gyratory Crusher order - given by Tüprag Metal Madencilik AŞ, an affliation of Eldorado Gold Co. operating in Kışladağ, Uşak - is the fourth order for Sandvik worldwide and the first one in Turkey. The crusher will be delivered to the mine site in Q2, 2013. Design features include the spider bearing, hydraulic adjustment, secured concave liners, hydraulic tank instrumentation system and the unique Automatic Setting Regulation System. Sandvik’s CG series of primary gyratory crushers complements its well established cone

01 March 2013

KOZA GOLD - HİMMETDEDE HEAP LEACH CRUSHING AND SCREENING PLANT Koza Gold, one of the key gold producers of Turkey, purchased a crushing and screening plant, including 1 unit of CJ815 jaw crusher and 3 units of CH870 cone crushers for their mine site in Himmetdede, Kayseri. CJ815 is in operation for heavy duty applications with its strong structure and unique design, easy repair and maintenance and installation features. CJ815 is the biggest jaw crusher within Sandvik product range and this will be the first application in Turkey for this model.

crushers for secondary and tertiary crushing.

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

The CH series are unique with thier ASRi and special designs, which enables the machine to protect itself against the uncrushable tramp materials. Sandvik cone

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

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

The CH870 cone crusher order given by Koza Gold will be the first application for this model in Turkey. In addition to CJ815 and CH870, Himmetdede Project includes also one unit of CJ411, two units of CH660 and required screens and feeders to prepare leach pad liner material.

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

VIBROCONE - A CRUSHER WITH GRINDING PERFORMANCE The Vibrocone crusher is the next generation of crushing technology, combining the best of conventional crushing and grinding principals. Thanks to its unique design, which enables to crush down to 7 mm with a product size distribution of P50 = 3mm. That results in saving upto 30% energy in the downstream of the milling process. The Vibrocone crusher is in operation at copper, gold and iron ore mine sites and provides highly increased efficiency in the comminution process.

SARGIN AŞ - RAISEBORING MACHINE Sandvik Rhino 1088DC Raiseboring machine was purchased by Sargın AŞ in 2012, which is the first sale of this machine in Turkey. The machine is operating at Balya, lead - zinc mine owned by Esan - Eczacıbaşı.

SANDVIK STANDARD PLANTS (MODULAR) EXPECTATIONS FROM 2013 Sandvik Mining Turkey will be supporting the mining industry by focusing on the following outstanding products in 2013.

Sandvik Mining offers standard plants for green-field projects. The flexible, well optimized and versatile design of Sandvik standard plants shortens the erection and commissioning time which 01 March 2013

results in quicker return of investment even up to 5 months! The idea behind the Sandvik standard plants is enjoying the advantage of perfectly pre-designed modules with Sandvik engineering quality. Primary jaw crushers, secondary and tertiary cone crushers and several feeders and screens in different capacities, within the Sandvik product range are applicable for this approach. Sandvik Mining will be your first choice with standard plants when you count on your time!

01 March 2013

HYBRID CRUSHERS

Sandvik Hybrids are perfectly designed for primary and secondary crushing of soft and medium-hard materials that also have the tendency to be wet and sticky. The feed material will be crushed between the counter-rotating rolls using the principal of compression. The crushing rolls are driven individually by electric motors with couplings and gears. The hybrids are equipped with an advanced hydraulic gap adjustment system with integrated overload protection

to realize different product sizes. Having one of the rolls as moveable also protects the machine against tramp materials together with the smart automation system.

CONTACTS Sandvik Mining Turkey Address: Ivedik OSB, ArÄą Sanayi Sitesi 1122 Cad. 1417 Sok. No: 60 Yenimahalle, Ankara - Turkey Phone: +90 (0312) 551 49 00 Email: info.mining@sandvik.com Website: mining.sandvik.com

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Invictus Gold Ltd Australian listed company Invictus Gold Limited is the “new kid on the block” for gold and copper exploration in Turkey and the company is proving to be a fast mover. The Turkish subsidiary, Invictus Madencilik San. ve Tic. AŞ was set up in June 2012, it acquired its first project, the Himmetdede South Gold Project in July and is now waiting for assay results from its first drill programme there. Invictus Gold’s Managing Director, Dr Mike Jones, has been very impressed with the exploration potential of the country and this has been enhanced by the relative lack of exploration in recent decades. Prior to Invictus Gold’s arrival in Turkey the company had been focussed on its exploration projects in eastern Australia. However increasing difficulties of operating in Australia and the lack of good quality, poorly explored projects led Invictus to consider a number of overseas countries in which to expand. It only took one trip by Mike to decide that Invictus should come to Turkey and follow in the footsteps of not only other successful foreign exploration companies such as Chesser Resources Limited and Stratex Limited but in the older footsteps of the ancient gold miners such as the Lydians. Perhaps it should not be said that other reasons such as Turkey’s fabulous history, scenery and food as well as the friendly welcoming people were also Drilling at the Himmetdede South Project

part of the reasons for setting up in the country.

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

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

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

CONTACTS Tamer Gezbul Managing Director, Turkey Invictus Madencilik San. ve Tic. AŞ Address: Mustafa Kemal Mah. Dumlupınar Blv. Tepe Prime B Blok No: 266 / 130 Çankaya - Ankara - Turkey Mobile: +90 (530) 113 32 20 E-mail: tgezbul@invictus.com.tr Website: www.invictusgold.com.au

01 March 2013

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Ortadoğu Drilling Ltd Ortadoğu Sondaj San. Tic. Ltd. Şti. was established in 1995 with the purpose of furnishing drilling services in the field of mining industry by performing deepdrill holes. Over the years, with its experienced drill crew and own manufactured drill rigs, our company has positioned itself as one of the largest specialized and leading drilling companies in Turkey. With its drill fleet capable of drilling deep holes, specialized drill crew and well-qualified equipment, our company performs all kinds of drilling services;

including surface and underground coring, multipurpose, directional, RC, slim hole and geotechnical drilling in order to meet our clients’ demands. Moreover, performing engineering operations in the drill holes, such as; geophysical tests, single shot / multi shot surveying, core orientation, well development and geothermal tests are among our company’s services. In the year of 2010 Ortadoğu Sondaj has established its own group company called; ‘Geo Makine İmalat Ltd. Şti.’, which

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

01 March 2013

projects. Especially with our own manufactured deep hole drill rigs, Ortadoğu Sondaj is capable of drilling deep slim holes in the exploration phase of geothermal and oil / gas industry. Our target is to complete all of our projects in economical manner; acceptable with the international standards; at high quality and sensitive to environment, health and safety laws.

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

01 March 2013

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A Complete Overview of Turkey’s Copper Production and Advanced Stage Projects Turkey has very diverse mineral deposits due to its extremely complex geology and tectonic setting. A wide variety of primary metallic minerals and a significant amount of lignite are produced in the country along with its world leading boron production from its world class boron deposits. Turkey has a long mining history going back over 9,000 years but only recently has its mineral existence and sustainability been properly appreciated by both international and nongovernmental local investors. Changes in Turkish Mining law during the past decade have stimulated investment in the mining sector and provide an opportunity for Turkey to become a leading producer of gold and an emerging pro-

ducer of base metals. In this article, we will examine the copper mining industry of Turkey and you will find the latest updates and information about Turkey’s most important copper producers and most important copper projects. There is excellent potential for both Cyprustype and Kuroko-type VMS deposits in Turkey, especially in the productive northeastern Black Sea coast area (the Pontide Belt). Exceptionally, Siirt - Madenköy Copper Mine which is to date one of the most important VMS deposits of the country, is located at the south-east of Turkey on the border folds. A detailed Project summary of Park Elektrik’s Siirt - Madenköy Copper Mine can be found later in this article.

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

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

01 March 2013

Copper production of Turkey covers just 20% of the country’s copper needs currently and is losing ground due to the rapid economic growth and demand for refined Copper which contributed in excess of 5 billion USD negative to a current account deficit in Base metals in 2012. There is only one copper smelter in the country and most of the companies involved in copper mining produce concentrate to be exported and imported back as final refined copper products. In order to overcome this deficit the country needs more copper smelters along with higher production. Eti Bakır’s (Cengiz Holding) Kastamonu situated - Küre mine and Artvin situtated - Murgul copper mine produce enough concentrates to keep Eti Bakır’s copper smelter at full capacity. Eti Bakır’s copper smelter which is located at Samsun, a coastal city at Black Sea Region, produces 40,000 tons/year of blister copper and 220,000 tons/year sulfuric acid. The 2012 Turkish copper ore exportation realized 457.4 million USD with an increase of 23.06% in value while 2012 monthly average copper prices were around 1 - 10% higher than 2011 monthly copper prices so the export volume also increased. Turkey definitely needs more copper smelter projects in order to meet country’s copper needs, which continue to grow. Focusing on Turkey’s most important copper mines and their production levels and starting from Park Elektrik’s (Ciner Group) Siirt - Madenköy Copper Mine which is one of the most important copper projects today. Some brief production numbers of Eti Bakır’s Kastamonu - Küre and Artvin - Murgul mines can be found later in the article. Subsequently Inmet Mining’s Çayeli Bakır project,

Demir Export’s (Koç Holding) Giresun - Lahanos mine, Nesko’s (Yıldızlar SSS Holding) Yenice mine introductions will take place. The important advanced stage copper - polymetallic projects are; Columbus Copper Corp.’s (formerly Empire Mining Corp.) Karapınar and Demirtepe projects, Aldridge Minerals’ Yenipazar polymetallic project, Özdoğu İnşaat Ltd.’s Balıkesir - Havran Cu-Mo project, RCR’s (Red Crescent Resources) Sivas and Hakkari copper projects, Pilot Gold and Teck Resources joint venture İzmir - Halilağa porphyry Cu-Au project, Alacer Gold’s Cevizlidere Cu-Au-Mo and Karakartal CuAu porphyry projects, Mediterranean’s Taç - Çorak Cu-Au deposit, Özaltın Holding’s Cerrattepe Cu-Au porphyry project. Summaries follow the mine updates hereunder.

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

ETİ BAKIR’S KASTAMONU - KÜRE AND ARTVİN - MURGUL MINES Purchased by Cengiz Holding via the Turkish privatization of the production assets of Eti Bank, the company undertakes copper mining at Kastamonu Küre and Artvin Murgul facilities and operates the copper smelting factories at Samsun. Production of copper and pyrite concentrate at the Kastamonu Küre facilities are realized with an annual capacity of 1,000,000 tons ore, 90,000 tons copper concentrate and 400,000 tons pyrite concentrate and the Murgul plant extracts raw copper ore over 2,700,000 tonnes per year through 3 open-pit mines, and processes to produce 75,000 tonnes of copper concentrate per year for supply of Concentrate Copper to Samsun Smelting Facilities. The Küre Mine and Samsun Smelter plants launched in 1973 for processing the copper ore deposits at the Black Sea region, joined into Cengiz Holding’s structure in 2004, the Murgul facilities were acquired in 2006. Today the Samsun Smelter is the sole facility that produces copper metal from ore in Turkey and the facilities consist of Smelting, Sulfuric Acid and Concentrator facilities. In addition, a Hydro-electric Power Plant with an installed capacity of 2 x 2.35 MW at Murgul mine, has been built and operated to generate power within the frame of production license. Kastamonu Küre Mine: 3 open-pit and 1 underground mine; 1,000,000 tonnes/year run-of-mine copper production; 90,000 tonnes/year copper concentrate. The company is still working for improvement on the capacity of production and percentage of copper tenor and a cobalt leaching facility is under design together with BRGM/ France technology (Bio Leach Plant). 01 March 2013

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

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

MTonnes

Cu%

Zn%

Proven

4.70

3.77

5.85

Probable

6.90

3.57

5.8

11.60

3.65

5.87

Total

It produces three types of concentrates: copper concentrate, copper and zinc bulk concentrate and zinc concentrate and these concentrates are sold to a number of international and domestic smelters and traders. At Çayeli, Inmet produced 31,400 tonnes of copper and 40,700 tonnes of zinc in 2012. For 2013 the company plans to produce 27,800 - 30,900 tonnes of copper and 35,900 - 39,900 tonnes of zinc with 1.02 - 1.09 USD cash cost per pound of copper.

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

01 March 2013

Demir Export’s Giresun - Lahanos Mine

2006 because of fluctuations of metal prices in the global market. Copper concentrate production continues at Lahanos without production break since 2006. Total number of workforce employed at Lahanos Copper Mine is around 130. Cut and fill underground mining method is the principal mining method for ore production at Lahanos. Production is divided into five sublevels according to the geometrical layout of the ore body. Production levels are designed to start from the bottom of the ore body and advance in upward direction. Cemented rockfill is used to backfill the depleted underground stopes. Run of mine ore is then milled at the onsite flotation plant. Processing plant established in 1992, runs at 500 tonnes per day capacity. Annual run of mine production from the underground mine is nearly 130,000 tons and 15,000 tons per annum of copper concentrate is produced from the processing plant. 800,000 tons of run of mine ore and 100,000 tons of copper concentrate had been produced since 2006. Produced copper concentrate is being exported to overseas smelters in Europe and China.

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

units like quartzite-meta arcosis, metasiltstone, meta-diabase, gabbro, and towards west, neogene aged dasitic igneous rocks are seen. The deposit has a hydrothermal type polymetallic (Pb, Cu, Zn, Au, and Ag) ore formation which is located within a diabase massive. Proven and possible reserve amounts are as follows (dates back 2007): Proven reserve amount: 713,006 tonnes. Possible reserve amount: 210,469 tonnes. Total reserve amount: 923,475 tonnes @ 1.36% Cu, 7.38% Pb, 2.85% Zn. Production of 306,000 tons of ore since the beginning of the year 2001 to the end of year 2007 has been realised. Production values of the last three years are given as follows. Years

Amount (t)

Grade (%)

2004

65,000

4.79 Pb

0.70 Cu

2.37 Zn

2005

60,000

6.69 Pb

1.58 Cu

2.64 Zn

2006

2007

72,000

5.85 Pb

1.35 Cu

2.62 Zn

TURKEY’S IMPORTANT ADVANCED STAGE COPPER PROJECTS ALDRIDGE MINERALS’YENİPAZAR POLYMETALLIC PROJECT The Yenipazar polymetallic VMS deposit (Ag, Cu, Pb, Zn) is the Aldridge Minerals’ most advanced property and is located at the geographic center of Turkey, approximately 220 km east-southeast of the capital of Turkey, Ankara. The Yenipazar Project has a currently deter-

•• All of these sulphides indicate Volca-

Contained Metal Au (g/t)

Ag (g/t)

Category

Tonnes

Indicated

29,669,000

0.95

31.3

369,000

0.47

25.5

Inferred

Cu (%)

Pb (%)

Zn (%)

0.31

1.01

1.47

0.18

0.94

1.89

Au Eq (g/t)

Au (M oz)

Ag (M oz)

Cu (M lbs)

Pb (M lbs)

Zn (M lbs)

Au Eq (M oz)

2.42

0.90

29.85

204.8

660.2

961.2

2.30

1.88

0.01

0.30

1.5

7.7

15.4

0.02

Total Mineral Resources of Yenipazar Project

mined strike length of at least 1,700 metres averaging 200 metres in width and approximately 20 metres in thickness at depths between 30 and 190 metres. During 2012, Aldridge successfully completed a 10,000 m diamond drilling program, which confirmed the continuity of the resource and resulted in a better understanding of the geology of the Yenipazar deposit and its mineralized zones. Aldridge is currently building on its December 2010 Preliminary Economic Assessment with a feasibility study that it is expect to complete in March 2013. (Please find Aldridge Minerals’ news release dated 11/26/2012 for detailed information)

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

ÖZDOĞU İNŞAAT LTD.’S BALIKESİR HAVRAN CU-MO PROJECT Özdoğu İnşaat Ltd. won the government tender of the rights for the copper - molybdenum mine located at the Balıkesir Province Tapioca village region on 17.11.2007 by the General Directorate of Mining Affairs (MİGEM). The company obtained its “Operating License” from MİGEM at 06.03.2008, the positive certificate of “Environmental Impact Assessment (ÇED)” from “Ministry of Environment and Urbanization” on 20.11.2009, the “Business and Work Permits” from Balıkesir Province Special Administration Directorate in 20.08.2010 and finally “Forest Permits” from “Ministry of Forest and Water Affairs”. According to MTA’s (Mineral Research & Exploration General Directorate) drilling reports related to the licence area which covers 1439 hectares, the resource of the Havran deposit revealed as 17.5 million tonnes @ 0.32% Cu and 0.04% Mo. After the positive results of subsequent

01 March 2013

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

nic Massive Sulphide origin and the latter two; chalcocite and covellite are interesting as strong indicators for a significant zone of secondary enrichment (supergene) of a major copper sulphide deposit. Generally though we are looking at a broadly disseminated copper deposit with secondary nickel and gold within an extensively altered shear zone;

•• The “silicified carbonate zone” is in-

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

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

•• There are now more than twenty sur-

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

The physical structural confinement that defines the SCP mineralised zones, i.e. the Main Zone (“MZ”) and the South-East Zone (“SEZ”), along with the detailed geochemical and deep IP (“Induced Polarisation”) geophysical profiles that have been generated, initially by Falconbridge and subsequently independently verified by consultants to RCR, the surface mapping and chip sampling, the structural geological review and lastly the drilling and core sampling, collectively define a number of clear physically measureable blocks of potential resources. The actual measured physical dimensions of the shear hosted mineralisation, and the dip orientation which is aligned to the clearly visible and mapped struc-

ture of approximately 40° degrees to the south-east, enable a purely volumetric calculation of the listvenite mineralised MZ. This equates to approximately 240 million cubic metres in-situ which, when discounted conservatively for geological (-35%), mining (-15%) and other (-15%) losses represents at least 260Mt of potential mineralised material as resource. Falconbridge estimated, within the wide outcrop target area only, some 200Mt for the MZ and therefore with all the evidence and independent assessment, one can say that it is a high probability to confirm a reserve of between 150Mt and 250Mt. Such a body at a grade of 0.8% Cu, 0.25% Ni and 0.12g/t Au could contain approximately 5 billion pounds (2.27Mt) of copper, 1.1 billion pounds (499kt) of nickel and 1.1 million ounces of gold. Collectively the SEZ blocks display higher grade mineralisation both at surface and in the buried material than the MZ and which appears on average, to be 75% higher grade both for primary copper and the by-product nickel and gold values. This could be attributed to localised enrichment and/or less time exposure to the oxidizing process. Through the utilisation of the measured dimensions of the blocks and accounting for losses in the same way as the MZ, but with higher attributable geological losses of up to 50% due to the later faulting, with a measured average dip of +30°, the estimated total tonnage in the SEZ area is approximately 130Mt of mineralised material. Falconbridge estimated a target of 100Mt for the SEZ in the same area and therefore with all the evidence and independent assessment it is possible to say that it is a high probability to confirm a reserve of between 80Mt and 130Mt. Such a reserve at a grade of 1.2% Cu, 0.5% Ni and 0.25 g/t Au could contain approximately 2.5 billion pounds (1.13Mt) of copper, 1.1 billion pounds (499kt) of nickel and 800 thousand ounces of gold. In total then the SCP represents in-situ potential for 7.5 billion pounds (3.4Mt) of

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

at least another five years.

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

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

Any mine design at the SCP is ofcourse clearly to be premised on a multiple open pit design in the potentially foreseeable years of the life of mine which will be at least 20 to 25 years. This will deliver large flexibility in the operational ability to sustainably deliver ROM ore either within a specified grade range, allow high grading if required to take advantage of price peaks in the commodities cycle and allow blending to optimise Leach pad delivery and process management as a whole. Within the confines of the future confirmation of the mineralised zones being open at depth, underground designs for extension of mine life may be contemplated at that time. It is envisaged that the MZ will be mined by one large pit centred in the wide outcropping zone. This main pit would be ramped up to produce 4Mtpa or 20,000 tonnes per day (“tpd”) for the first five years, then 6Mtpa or 30,000 tpd for a second five year period, then 8Mtpa or 40,000 tpd for a third five year period and finally 10Mtpa or 50,000 tpd for the balance of the life of the mine which will be

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

Cumulatively the SCP could be expected deliver in its life more than 2Mt of Cu and significant by-products of nickel (300kt to 900kt dependant on silicification effects) and gold (750,000 oz to 1 Moz). It was announced in late 2012 by RCR (TSX-RCB) that it was looking to monetize (sell) the SCP as its size and requirements for development capital are beyond the capability and capacity of the Junior company. No announcements have been made since but it is believed that strong interest has been shown by a number of companies and that talks are ongoing for its transfer to a new owner and Turkey is looking forward to the development of this potentially very significant project. Hakkari Copper Projects RCR undertook a significant satellite imagery survey of the overall project area and extensions in Hakkari very early on in its tenure and work in the province 01 March 2013

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

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

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

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

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

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

PILOT GOLD AND TECK RESOURCES JOINT-VENTURE İZMİR - HALİLAĞA PORPHYRY CU-AU PROJECT

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

Halilağa is development-track copper-gold porphyry located in northwest Turkey, discovered by Fronteer Gold. The project is located in a regional industrialized zone that includes large open pits, a major power plant, and tile factories. Power lines from a nearby coal-fired generating station run through the property. The project is interpreted to be a single widespread mineralized system containing porphyry-related high-sulphidation style gold and coppergold mineralization.

Cevizlidere is located in Ovacık Township, Tunceli Province within the mountainous east-central Anatolian region of Turkey 600 km east-southeast of Ankara. The project is 80 km by road to the northwest of the provincial capital of Tunceli (pop. 26,000) and 20 km southwest of the town of Ovacık (pop. 5,800), the project’s logistical base.

Grade

Contained Metal

(%)

(g/t)

(%)

(lb)

(oz)

(lb)

Sulphide resource (1) indicated

168,167

0.30

0.31

0.006

1,112,223

1,665

20,391

inferred

198,668

0.23

0.26

0.007

1,007,361

1,661

29,783

4,914

0.08

0.60

0.004

Oxide resource (2) inferred

Halilağa Resource Estimate Strip Ratio: 2.5: 1 (1) At a 0.2% copper equivalent cut-off grade.

The rock types at Cevizlidere include Mesozoic limestones overlain by Tertiary andesitic flows and pyroclastic rocks. These units are cut by multiple intrusive phases, varying from the early “crowded” feldspar porphyry to massive dacite porphyry to narrow, late-stage, phenocryst-poor, feldspar porphyry dikes, all of which combine to make up a NW-SE elongate composite porphyry stock. Cevizlidere falls in the copper-gold-molybdenum class of porphyry copper deposits. The mineralization is associated with multiple porphyry intrusions and zoned alteration and mineralization.

Cevizlidere Project

Since its discovery in 2007, Halilağa has

Tonnes (x1000)

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

(2) At a 0.2 g/t gold cut-off grade

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Alacer Gold is the operator of Cevizlidere, which is a 50/50 joint venture with Turkish partner Lidya Madencilik San. ve Tic. AŞ and is currently undertaking preparatory work prior to recommencing drilling at Cevizlidere. Karakartal Project Karakartal is located roughly 550 km east of Ankara, Turkey. The project is 115 km by road from Erzincan, Turkey and about 15 km south-southeast from the town of ĺliç (population 2,500). Karakartal is roughly 10 km from by road from the Çöpler mine. Alacer Gold picked up the Karakartal tenements in 1998 and conducted a targeting exercise, culminating in an initial eight-hole diamond drill program in 2001. This work was followed up in 2008 with a campaign involving 22 holes for a

total of nearly 7,800m of diamond drilling. The information from these drilling programs was used to estimate an initial mineral resource for Karakartal. Karakartal is a copper-gold porphyry system hosted in variably altered diorite that has intruded a sequence of carbonates and metasedimentary units. Copper mineralization as primary sulphides is seen as chalcopyrite with rare secondary covellite and chalcosite. Oxide copper is malachite, with azurite and neotocite. The copper mineralization is commonly developed as part of a weak quartz stockwork with the quartz veins being less than 1cm in width. The best copper mineralization is associated with the potassic alteration zone. Drilling at Karakartal during 2012 has been aimed at better defining and extending the current resource as well as testing nearby targets. Alacer Gold is the operator of Karakartal, which is a 50/50 joint venture with our Turkish partners Lidya Madencilik San. ve Tic AŞ (“Lidya Mining”).

MEDITERRANEAN’S TAÇ - ÇORAK CUAU DEPOSIT Mediterranean Resources Ltd. is actively working on its two 100% owned properties which were in Teck Cominco’s possession during 90’s and they spent more than 4 million USD for the development of the projects. During 2006 Mediterranean spent 3.1 million USD more for the exploration activities on Taç, after which it earned an undivided interest in the properties, and during 2007 Mediterranean spent 4.5 million USD of exploration on Taç and Çorak. On March 2008, Mediterranean announced new NI 43101 compliant resource estimates for Taç and Çorak. Highlights of the study are as follows:

•• Indicated resource of 1,598,417 ozs of

gold at both Taç and Çorak on a goldequivalent basis with a threshold of 13 USD/tonne contained metal value (and inferred resource of 730,889 ozs);

•• Indicated resource of 1,335,249 ozs of

gold at both Taç and Çorak on a capped basis with a threshold of 13 USD/

Mediterranean’s Taç Project

tonne contained metal value (and inferred resource of 484,276 ozs);

•• At Taç, indicated resource of approxi-

mately 58.0 million lbs of contained copper; (and inferred resource of approximately 8.0 million lbs of contained copper);

•• Also at Çorak, indicated resource of

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

•• Also at Çorak, indicated resource of

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

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

REFERENCES 1- “THE MINING INDUSTRY OF TURKEY” Anac, S., Tamzok, N., 2nd Balkan Mining Congress Book of Proceedings, 2007, p. 37-43 2- “MINERAL EXPLORATION: WHAT, WHERE AND WHY IN TURKEY” Yigit, O., 2011, Mining Turkey, vol.1, p.12-19 3- “MINING IN TURKEY” GBR Reports, 2012, Mining Turkey, vol.2, p.35-63 4- www.gentorresources.com/s/TurkishCopper.asp?ReportID=526928

•• Metallurgical

testing has clearly indicated flotation to be the most appropriate method of metal recovery and concentration.

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

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

CONTACTS Mining Turkey Magazine Head Office: A.Öveçler Mah. 1042 Cd. (Eski 4. Cd.) 1335. Sk. Vadi Köşk Apt. 6/8 Ankara - Turkey Phone: +90 (312) 482 18 60 Fax: +90 (312) 482 18 61 Email: info@miningturkeymag.com

01 March 2013

Profile www.miningturkeymag.com

Park Elektrik’s

Siirt Madenköy Copper Field Despite being said to be a city where Arabic origined Turkish citizens live, Siirt is a city which hosted many religions and whose history goes back to 3000 B.C. On these lands, where many civilizations, including the Hitites, the Urartu, Persians and the Ummayyad have ruled, farming culture of fertile Mesopotamia at the South and the livestock feeding culture of the mountainous areas at the North have created a different blend. While travelling from Siirt to Maden Village (Madenköy) of Şirvan District, we notice herds of goats which provide the meat for Siirts famous “büryan kebab” and we noticed some Siirt peanut trees. The Siirt centrum is dominated by old valleys despite deeper and younger valleys in East and South East Anatolia, allowing for topography where agricultural activities and livestock feeding can be performed. Although not as significant as in the neighboring city of Batman, Siirt’s most important underground resource is oil. This place is the 7th most important province of Turkey in terms of oil considering the exploration and production drillings. Also, another significant resource which

01 March 2013

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

THE HISTORY OF THE ESTABLISHMENT It is known that Madenköy copper field has been operated since the ancient times. The historical mining equipment discovered with the new drilled galleries and the slag material found next to the village prove that the mine has been operated in the past. It is known that the first prospection studies at the field were realized in years 1947, 1958 and 1962. The first study conducted in detail was undertaken in 1970, the first reserve was discovered with 18,500 me-

ters of drilling conducted in 66 locations. In 1981, Outokumpu and MTA have prepared a joint feasibility study, revealing 24 million tons of reserve with a grade of 2.03%. In 1985, the field was transferred to Etibank and mining preparations started under a commission including Preussag, Alarko and Etibank. However, this commission was dismantled in 1989 and it was tender by Etibank in the following years. Park Elektrik Üretim Madencilik AŞ has provided the highest bid with 7,929,000 TL in the tender and has acquired the site on 28.01.2004. The exploitation license of the field belongs to Park Elektrik Üretim Madencilik AŞ till 2037.

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

Diyarbakır and Madenköy - Siirt copper fields are found. Siirt Madenköy copper mine starts with pyrite-chalcopyrite scattered claying and chloritization. From top to bottom, pyrite, pyrite + chalcopyrite, pyrite + chalcopyrite + sphalerite, pyrite + chalcopyrite + magnetite or only magnetite diffused claying - chloritization and ends with occasional crack filling mineralization. The mineral mass dips 50° - 60° north. Mineralization fully occurs within pillow lavas. 0.46% - 0.60% Cu is discovered during the analysis of decayed rock samples which contain scattered pyrite and chalcopyrite. The samples of Siirt Madenköy copper field analyzed with mineral microscopy reveal that main ore minerals are pyrite, chalcopyrite, magnetite, sphalerite, marcasite, galenite, pyrrhotite, bornite, covellite, chalcocite, valerit, bravoit, linneit, fahlerz, gold and silver while the main gangue minerals are quartz, chlorite, barite, siderite and carbonate. The ratio of the minerals in the mine bed vary between 0 - 2.75% zinc, 0 - 0.3% lead, 0.3 - 8.55% copper, 0.005 - 0.014% cadmium. Average grades are around 0.67% Zn, 0.059% Pb and 2.33% Cu. The recent studies conducted on the mineralization at Southeastern Anatolia ophiolite belt have labeled Siirt Madenköy Copper Bed as “Cyprus Type Massive Sulphite” bed.

Reserve Category

Tonnage (t)

Cu (%)

Measured

31,182,000

2.26

Indicated

6,433,000

2.79

Measured +Indicated

37,615,000

2.34

2,206,000

3.38

39,821,000

2.40

Inferred Total Reserve of the Project

Specific Gravity (t/m3)

4.05

stopping underground mining.

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

the end of 5 years, it is planned to reach +1,115 meters. At the end of this 5 year open pit project, it is aimed to expand the project further. After the open pit, the ore left is anticipated to be mined with underground until +770 meter levels. To clarify long term mine planning geotechnical drillings are being conducted at site and for this purposes 10,000 meter geotechnical drilling was proposed. Data gathered from geotechnical studies and samples collected from drillings will be fed to mine planning and finally long term mine planning will be created. All these studies are being done by SRK Consulting and İstanbul Technical University. Some of the mineralization in the field remains under a neighborhood of Maden village. At this point, it was required to remove the neighborhood. The company has applied to Ministry of Energy and Natural Resources for expropriation. The Ministry has declared a “Public Benefit Decision”, approving the expropriation, however, the company, later on, has chosen to sign agreements with the villagers without implementation the decision, and has purchased almost all of the required parcels (86 parcels, 32 houses and 140,000 m2). By considering the long term mine planning, expropriation studies for 119 parcels, 58 houses and 466,839 m2 are ongoing and aimed to be completed in 2013. The stripping ratio, whose calculations

RESERVE AMOUNT ESTIMATED ACCORDING TO JORC STANDARTS Since 2006, approximately 5 MT of identified reserve is mined from underground to produce copper concentrate. It is estimated that 34 MT of reserve is left. Current yearly raw ore production capacity of the plant is approximately 1.5 - 1.8 MT. Considering the current reserve amount and production capacity, it is expected that the site is operated for more than 20 years. Although the mine has been operated with underground mining methods since 2006, it is planned to convert to open pit mining in early 2013, fully 01 March 2013

are made according to +1,000 meter open pit basis, is calculated as 1:7 - 1:7.5. For 2013, 15 Mm3 OB excavation is planned. For the following years after 2013, 10Mm3 OB excavation against 1.8 MT ore production will follow. Since the commencement of mining at site, Company increased its production every year as sated below. With the decision of to continue mining with open cast, company revised raw copper ore production capacity and copper concentrate production capacity accordingly. The Company have initiated the necessary investment in early 2012 both at raw ore production and concentrate production sites. The Company propose to produce 1.5 - 1.8 MT raw copper ore from open cast and fed to the concentration plant, whose capacity has already increased to 1.8 MT. For 2013; 1.5 - 1.6 MT of ore to be fed to concentration plant and 105,000 tons copper concentrate will be produced.

PRODUCTION CAPACITY AND SALES According to the information provided, yearly raw ore processing and Cu concentrate amounts until end of 2013 are given below; Processed Copper Ore (Tons, wet)

Produced Cu Concentrate (Tons, wet) 13,439.47

2006

149,975

2007

574,204

52,586.65

2008

677,150

64,370.83

2009

733,615

63,137.96

2010

476,912

37,426.17

2011

949,731

77,510.04

2012

1,138,232

89,253.16

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

01 March 2013

In spite of these hard conditions, we are also informed that the production costs decrease every year. 1.8 - 2.0% Cu grade raw ore which is fed into the Processing Plant in Madenköy is processed into 20 - 22% copper concentrate following crushing, screening, grinding and floatation operations. The processing plant is under operation since 2006. From 2006 to end of 2012, 400,000 tons of concentrate has been produced in the Processing Plant. Park Elektrik Üretim AŞ, which entered copper mining business in 2006, has produced solely concentrate copper till 2011. With a new decision, starting with 2011, the company has started to produce cathode copper. In line with the agreement between Karadeniz Bakır İşletmeleri and the Company, when needed, concentrate copper is sent to the processing plant in Samsun for cathode copper production. All of the produced concentrate and the cathode copper are sold to abroad. The products are sent to İskenderun harbor, and later shipped to abroad. 105,000 tons of copper concentrate production is scheduled for 2013 as concentration plant capacity increased at the end of 2013.

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

are 25 m2 and the ore is approached with 10% inclination. The length of the tunnel is approximately 2,000 meters. The level distances are chosen as 20 meters at approximately 200 meter ramp length. Between the levels, 5 to 12 holes are drilled in a fan pattern into the ore using simba. The lengths of these holes vary between 15 - 20 meters, depending on the height of the level. The production panels are blasted by blasting the explosives in these holes, and production is achieved with collapsing hanging wall. In terms of gallery advancement, advance occurs as 3 - 4 meters depending on the formation. The ore mass accumulated as a result of blasting is removed with remotely controlled underground shovels (since the barren rock is clay, loading is remotely performed without any operator or worker entering into production panel), and loaded into remotely controlled underground trucks, and hauled to jaw crusher floor. The ore, which is fed with underground trucks into the 350 t/h capacity jaw crusher located underground, after being crushed, is sent to plant stockpile via band conveyors. Before the construction of underground crushing and band conveyor system, trucks were used to transfer the ore to the stockpile. Increasing costs of underground truck haulage and the incurred losses in the past has played an important role in the decision to construct a band conveyor system. Today, with the jaw crusher system located 135 meter under the surface and a band conveyor system of 650 meters, the problems have been eliminated, and a more profitable production is achieved. Madenköy underground mine continues to work underground with 5 underground trucks, 5 underground shovels, 2 simbas, 3 jumbos, 5 underground cement mixers and 4 shotcrete machines.

PROCESSING PLANT

The ore, recovered as a result of mining activities are carried with belt conveyors to the stock area (belts carry ore for 600 - 650 meters underground and 170 meters at the surface) while the ore produced from underground is hauled with trucks. As of start of 2013, in the stock area, there are approximately 400,000 tonnes of ore ready to be processed. Daily processing capacity of the processing plant increased to 5,000 tonnes following the capacity expansion studies. New crushers and belts are included in the system within the scope new capacity expansion work. Previously 80 cm conveyor belts were used in the plant, however, at the moment 120 cm capacity new plants are being used. With new cells and mills which have been added to the system, 5,000 tonnes of daily capacity has been achieved. The ore in the stock area on the other hand is being fed into jaw crusher with the help of a shovel, and 80% of the ore crushed in the jaw crusher is grinded under 15 mm with cone crusher and closed screening circuit. The ore fed into the crusher from the stock area always has to meet an average 1,8% inlet grade. To achieve this condition, the feeder blends the different grade ore piled at different locations in the stock area. The remaining process is as follows:

float the copper mineral (chalcopyrite). This allows for the separation of chalcopyrite from pyrite and floats chalcopyrite, resulting in copper concentrate. In the plant also slime distributor and sodium silicate is used to press the silicates. Sodium silicate is prepared as 10% solutions in the reactive tanks. The ore, which are grinded into liberation point, arrive at the product conditioner at upper cyclone. In the conditioner, the ore is subject to flotation by the addition of limestone, collector, sodium silicate and foaming agent in 10 - 20 m3 cells. During flotation, copper particles sticking to air bubbles come up to the surface, spill from the cells and sent to other cells to be subject to same operations. The products which does not wanted to floated remain in the cells. These unwanted products are pumped to waste storage plant. The products which float in 20 m3 cells are sent to 10 m3 cells in other words 3 stage cleaning circuit. The products which float during first cleaning, are sent to second and third cleaning, respectively. After the third cleaning circuit, the floating product is sent to copper concentrate thickener. Meanwhile, the waste from 10 m3 cells is generally united particles. At this stage, regrinding scavenger circuit enters into the circuit. The waste from 10 m3 cells is pumped to regrinding mill to be grinded. The aim here is to liberate

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

The ore from the stock pile, which are fed into the crusher, are fed to two thin ore silos after being grinded under 15 mm. These ore are fed into 9 x 12 feet rod mills to be re-grinded to achieve a size of -1 mm in 80% of the ore. These ore pumped to cyclone tanks with pumps. The product pumped into the cyclones, sub cyclone (+1 mm) is sent into 2 different 8 x 10 feet rod mills, above cyclone (-1 mm) are sent into flotation. Parallel to the capacity expansion, new mills will be included in the system. For this expansion, a 100 m3 new mill is ordered. The ore, which is grinded into liberation size, is sent to flotation. Firstly, pH is arranged for the ore. In order to increase pH to 12 limestone and 3418 (as collector) is used. The reason for basic environment is to press the gangue mineral (pyrite) and to 01 March 2013

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

installed Courier device, it is possible to reflect and monitor the analysis of inlet, concentrate, waste samples and the monitoring of the reactives. The electronic weigh-bridge in the system allows for the calculation and automatic screening of daily amount of production. While Courier device gives approximate results, more precise results are obtained the laboratory in the Plant. In the laboratory, copper, iron, lead, mercury, zinc and sulphur analysis can be precisely performed. Here, crushing, grinding, floatation experiments can be performed for raw ore, and also technological tests can be conducted. Also, screen analyses and limestone quality analyses can be performed in the laboratory in the Plant

II. CLASS WASTE STORAGE AREA AND ENVIRONMENT According to the information the company received, the volume of waste storage area is 2,500,000 m3. A rehabilitation program has been planned by Park Elektrik Üretim Madencilik AŞ and the project has been approved by Ministry of Environment an Urban Affairs. Following the rehabilitation studies within the scope of the project, the capacity of the Waste Storage Area will be increased to 2,970,000 m3. Also the company has acquired a positive EIA for a new waste storage area with a storage capacity of 3,105,590 m3, which is to be commissioned with the capacity increase investments. The application projects are approved by Ministry of Environment and Urban Affairs. A ten-

01 March 2013

der for the construction of Waste Storage Area has been made and the evaluations are still ongoing. The construction of the new Waste Storage Area is expected to be complete in year 2013. In general, all permits regarding the environmental issue in the mine area are taken and no permit related problematic conditions have occurred till now. We are also informed that, positive reports on studies made are received from Public Establishments. The civil works of the waste storage area in compliance with the specified criteria will be completed in 2013 and at the end of 2013 the new waste storage area will be taken into operation.

CURRENT STATE OF PRODUCTION AND INVESTMENT PLANS

In line with the increase in reserves and the positive global conjuncture in copper markets, the Company has expanded its capacity in 2011, increasing the raw ore processing capacity of the processing plant from 750,000 tons to 1,200,000 tons. Influenced by the capacity expansion that took place in October 2011, the production in 2011 has increased 107% compared to production in 2010. As of October 2011, the company has reached a processing capacity of 1,200,000 tons of ore with an investment of 3,5 million EUR. The second phase of this investment has been completed at the end of 2012 and annual ore processing capacity increased to 1,800,000 tons. The mentioned capacity expansion of the Company takes place with the addition

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

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

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

the mining activities in the second. Other than these direct services provided to the villagers, Park Elektrik have observed the healthcare center, primary school (Turgay Ciner Primary School), housings for gendarme stations, all constructed by Park Elektrik Üretim Madencilik AŞ in place. Another important social responsibility project of the Company is to construct a vocational highschool in Şirvan in 2013. The company will construct the biggest vocational school in the region, including the workshops, infrastructure and housing facilities. Park Elektrik Üretim Madencilik AŞ gives great importance to the employment of the people in the region. In this regard, almost all of the Madenköy people are employed in the mine. Also, the Company provides direct support to Madenköy Ltd. Şti., playing an important role in the capacity development of the people in the region. 22 of 28 construction equipment used in the mine are leased from the Madenköy Ltd. Şti. while 4 of them are leased from villagers and only 2 of them are leased from outside of Siirt. Also, the Company supports the employment of Madenköy Ltd. Şti. within the subcontractor companies.

CONCLUSION 474 employees work in Madenköy Mine of Park Elektrik Üretim Madencilik AŞ, a company which is 452th among the 500 biggest industrial establishments of Turkey and which is listed in İstanbul Stock

Exchange with 30% free floating. Such establishments generally work 300 days per year, and spend the remaining days for repair. However, in this plant, the repair work is done with spare units and therefore the activities continue non-stop 365 days. The efficiency of the plant working non-stop reaches up to 96%. According to the authorities loss of 4% is caused by unwanted blackouts and experienced seasonal problems. Madenköy villagers’ opinion towards the mine is very hopeful. 120 people from Madenköy village work in the company. Park Elektrik Üretim Madencilik AŞ also pays attention to lease the some of the construction machines from the villagers and the company constituted by the villagers, providing the villager further employment opportunities. The employees other than those from Madenköy village are from the villages in the vicinity, Şirvan and Siirt. The transportation of these workers to the mine is provided by the Company, the workers work 24 hours per day in 3 shifts of 8 hours. The only industrial establishment in Siirt region is Madenköy Copper Mine. The establishment provides an employment opportunity to approximately 1000 people, 500 of which work directly in the Company while the remaining 450 work in the subcontractor companies like OB excavation, security, etc. Considering that each household contains 7 - 8 people due

When you need to get a job done, the availability to choose is very low since there are a little number of companies providing the service. This situation is automatically reflects in the prices. With the support of Siirt Governorship and Şirvan District, various courses are being opened in Public Training Centers. Since, this is the only establishment in the region; these courses given in Public Training Centers are aimed towards this establishment. Despite the difficulties encountered in production, maximum attention is paid to occupational health and safety. It is mentioned that no significant accidents have occurred in the Company, which has received the OHSAS 18001 certificate from an internationally accredited company. It is really interesting that no significant accidents have occurred in such a mine which is geologically very hard to excavate. The Company pays similar attention to worker wages. By this way, it is estimated that the added value in the region is significant. The company also gets consultant support from national and international experts to achieve safe and sustainable mining. For processing, Outokumpu, for mine plan SRK and İstanbul Technical University, for reserve reporting Micromine, for waste recovery Hacettepe University are among some of the establishments that the Company receive consultancy services from.

CONTACTS Ramazan Yön General Manager Ciner Group Address: Sim Söğütözü İş Merkezi Söğütözü Cad. No: 14/D Beştepeler - Ankara - Turkey Phone: +90 (312) 287 65 55 Email: ryon@cinergroup.com.tr

01 March 2013

Interview www.miningturkeymag.com

Turkey: The Rising Star

in Global Mining Prime Ministry Investment Support and Promotion Agency of Turkey (ISPAT) is in charge of promoting Turkey’s investment opportunities to the global business community and attracting FDI. ISPAT President Mr. M. Ilker Aycı reports directly to the Prime Minister. With its global network of advisors and a multilingual team composed of country and sector experts who have extensive experience in the private and public sectors, ISPAT serves as a reference point for international investors and as a point of contact for all institutions engaged in promoting and attracting investments at national, regional and local levels. Mr. Aycı answered the questions of “Mining Turkey” on Turkey’s investment environment and provided an overview of the Turkish mining industry.

Turkey is promoting foreign direct investment (FDI), but what makes Turkey a desirable investment destination for foreign companies? (İA:) Turkey has plenty of advantages

01 March 2013

as an investment destination for international companies, which include its outstanding economic performance, dynamic population and geo-strategically important position. To begin with, Turkey has been growing remarkably with an average annual real GDP growth rate of more than 5 percent over the past decade, thus standing out as one of the fastest growing economies in the world. As the GDP levels more than tripled to USD 772 billion in 2011, up from USD 231 billion in 2002, GDP per capita soared to USD 10,444, up from USD 3,500 in the given period. Such a robust economic performance has enabled Turkey to attract a tremendous amount of FDI, totaling more than USD 120 billion over the past decade. Moreover, Turkey’s impressive economic performance is expected to continue into the future. According to a recent report issued by the OECD, the Turkish economy is expected to grow with an average real GDP growth rate of 5.2 percent between 2013 and 2017. As such, Turkey will be the fastest growing economy among the OECD countries.

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

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

What is ISPAT’s role in fostering FDI and increasing Turkey’s overall competiveness and being a point of reference for international investors? (İA:) Prime Ministry Investment Support and Promotion Agency of Turkey (ISPAT) is the official organization for promoting Turkey’s investment opportunities to the global business community and providing assistance to investors before, during

and after their entry into Turkey. ISPAT serves as a reference point for international investors and as a point of contact for all institutions engaged in promoting and attracting investments at national, regional and local levels. Active on a global scale, ISPAT operates with a network of local consultants in Belgium, Canada, China, France, Germany, India, Italy, Japan, Luxembourg, Saudi Arabia, Spain, the Gulf states (Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates), the Russian Federation, the UK, the USA, and South Korea offering an extensive range of services to investors through a one-stop-shop approach, and assists them in obtaining optimum results from their operations in Turkey. Working on a fully confidential basis, as well as combining the private sector approach with the backing of all governmental bodies, ISPAT’s services include but are not limited to, providing market information, site selection, B2B meetings, coordination with relevant governmental institutions, facilitating legal procedures and applications, such as establishing

companies, incentive applications, and obtaining licenses and work permits. We consider investors as clients and client satisfaction is a top priority for us. Since we do also work under the auspices of the Turkish Prime Ministry, the Agency has a comparative operational freedom and flexibility. The Agency was established with the aim of attracting investments required for Turkey’s economic development and growth. Our government sees FDI as one of the main components of economic development; to this end, ISPAT is relentlessly working to attract qualified investments, which boost employment, increase exports whilst decreasing imports, transfer technology to Turkey and bring added-value to the Turkish economy. ISPAT is also one of the most important stakeholders to improve Turkey’s competitiveness. As a point of reference for global investors, ISPAT is interacting with investors on a daily basis to facilitate their business. Meanwhile, ISPAT is also working closely with the regulatory bodies to make Turkey more competitive.

01 March 2013

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

Does ISPAT charge for the services it provides to investors? (İA:) No, our services are absolutely freeof-charge. What is the current state of development of the Turkish mining sector? (İA:) The Turkish mining sector’s total value of production stood at USD 11.3 billion in 2011, whereas it was USD 2.6 billion in 2003. Between 2008, the year of the economic downturn, and 2011, Turkey attracted around USD 144 million of FDI to its mining industry, while it saw USD 201 million of FDI in the same sector during the first 11 months of 2012 alone. There are more than 650 foreign mining companies in Turkey, while that number was 138 in 2004. Global companies such as Teck Resources, Inmet Mining and Eldorado Gold are continuing their operations in Turkey.

Why is mining important for Turkey? (İA:) The mining sector provides the necessary raw materials to industries such as automotive and construction, which are the backbones of our economic growth. The automotive industry produces 1 million cars annually and exports 730,000 units, mainly to Europe. The FDI stock rose

01 March 2013

from USD 2.3 billion in 2002 to USD 9.2 billion in 2010. Meanwhile, the production capacity doubled from 800,000 cars in 1997 to 1.6 million in 2011. Ford, Toyota, Renault and Hyundai are increasing their capacity with new models; this corresponds to an average yearly investment amount of USD 800 million between 2007 and 2011. Similarly, the construction industry is also growing at a fast pace. The Turkish construction industry was valued at USD 35 billion in 2012, and 31 of the largest 225 construction companies are Turkish (Turkey is second only to China). The sector is being fuelled by a number of large public-private sector partnership projects targeted at improving Turkey’s transport, healthcare and residential infrastructure. In particular, USD 400 billion of investment is to be injected into urban renewal projects over the next ten years.

Most of Turkey’s mineral reserves are buried underground. What is the country doing to uncover these reserves? (İA:) Exploration activities can be divided into governmental and private operations. The governmental exploration activities are carried out by the General Directorate of Mineral Research and Exploration (MTA) under the auspices of the Ministry of Energy and Natural Resources. Meanwhile, private companies are also intensifying their exploration activities. In addition to several reforms made for the enhancement of the investment environment in Turkey over the past decade, the government has recently amended the country’s mining regulations in order to facilitate the operations of national and international companies. Furthermore, the government has recently launched a new incentives regime that contains generous privileges for investors in

dustry. We also want to uncover the country’s mineral reserves with new exploration projects and increase our raw material production in particular. Through this increase in production, the mining sector will be able to support the domestic industry’s demand for low-cost and highquality input.

What do you expect from PDAC 2013? (İA:) We expect to reach as many in-

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

How is ISPAT aiding in the development of the Turkish mining sector? (İA:) As I mentioned before, mining is a sector of top priority for the Turkish government and my Agency. In addition to energy, machinery, automotive, petrochemicals and agriculture, ISPAT sees mining as a strategically and economically

01 March 2013

important sector, where we would like to see more investments. In this regard, we provide investors with sectoral information and market analyses, facilitate license and incentive applications, and carry out promotional activities specifically designed for mining companies, including briefings on the new incentives regime and regulations. We will be attending PDAC 2013 and hosting a “Turkey day” in Toronto with the participation of relevant governmental bodies, as well as companies operating in Turkey. The mission of the Prime Ministry Investment Support and Promotion Agency of Turkey (ISPAT) is to build up a network that would put Turkey on the agenda of the world mining community and shift focus to Turkish reserves for new projects, and consequently increase the production and wealth created in the mining in-

vestors as possible and promote the Turkish mining industry and investment environment. We also want to give detailed information about the business opportunities in the mining sector, including the new incentives regime and the new mining law. To this end, ISPAT is organizing a Turkey Ex Po day at PDAC to provide information on mineral explorations and geology of Turkey, Turkish Mining Law, licensing procedures and their implementation. In addition to rare earth minerals, the program will also focus on success stories and opportunities in gold mining in Turkey. During the session, we would like to feature the General Directorate of Mineral Research and Exploration (MTA), the General Directorate of Mining Affairs (MİGEM), and Eti Mine Works General Management (ETİ MADEN). In the afternoon session, private companies will make presentations on their operations and share their success stories.

What incentives does Turkey offer for the mining industry? (İA:) With a robustly growing economy and a young and dynamic population, Turkey offers lucrative investment opportunities for global investors. While international investors can find a secure and favorable investment climate in Turkey, they can also equally benefit from all incentives offered to local investors. Once an international company has been established in Turkey, then that company is considered a local company since it has a legal entity in Turkey. The new law guarantees equal treatment to all investors without differentiating between local and

international investors. With the latest incentives regime, companies can now benefit from many incentives including favorable tax deductions, special investments zones, land allocation, exclusive R&D and innovation support, training of workers and so on. The new incentives regime aims to reduce the current account deficit, boost production, and reduce dependency on imported intermediate goods. This entails increasing investment support to Turkey’s lesser developed regions, improving efficiency in industry and logistics, and investing in mid and high technologies. Effective as of January 1, 2012, the program offers investors VAT exemption and corporate tax reduction, as well as social security premium support, interest payment support and land allocation. The incentives regime comprises four different schemes: general, regional, large-scale and strategic investment incentives. The government has redefined the regions across Turkey, decreased the minimum fixed investment amount for large-scale investments and introduced incentives for strategic investments in sectors with a poor balance of trade. As for the incentives for strategic investments, the main goal is to support sectors where there is considerable trade deficit, offering strong support regardless of region, and so reduce the current account deficit. The mining sector is also one of the prioritized sectors under the new incentives regime, and as such, mining sector investments can benefit from additional incentives over and above what is available for other sectors.

Are there any particular advantages that make Turkey more competitive than other countries, in particular with regards to the legal framework? (İA:) As I said, Turkey has recently amended its mining regulations in order to attract more domestic and foreign private investors to the industry. According to Policy Potential Index ,which done by the Frasier Institute and measures the effects of government policies on the investment

market, followed by the Middle East.

What is your final message to potential partners, visitors and investors? (İA:) I believe that the opportunities in attractiveness, Turkey considered third most investment friendly destination for mining companies after Canada in 2010. The Turkish mining law divides minerals into six groups including precious metals. The exploration period is currently 7 years, and after this, the mining activities can begin following the issuance of an operational permit. Over the past decade, Turkey has embarked on a comprehensive structural reform program in order to improve its investment climate. A new FDI law was introduced in 2003, the corporate tax rate was decreased to 20 percent down from 33 percent, and all bureaucratic hurdles were removed, thus the legal framework was reformulated in favor of investment. The reform process has yielded results, making Turkey the second biggest reformer of its restrictions on FDI among the OECD countries. Today Turkey is a safe haven for investors and a unique investment destination in its region, thanks to the harmonization of regulations with the European Union, a single party government that has launched significant structural reforms since the banking crisis in 2001, and a distinguished economic performance and political stability.

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

Turkey’s mining industry are not fully known by global investors as they are not well informed about Turkey, its investment environment and rich mineral resources. Nonetheless, the recent increase in FDI in mining, numerous projects carried out by domestic and foreign investors are indicative of Turkey’s success as a rising star in global mining. As president of the Prime Ministry Investment Support and Promotion Agency of Turkey, I invite investors to join Turkey’s rise. The global economy is undergoing a profound transformation; the center of the world economy is shifting towards emerging economies like Turkey. And Turkey is differentiating itself with its rich resources, stable economic growth and liberal economic policies embracing investors from around the world. So this is the right time to invest in Turkey to seize the opportunities in mining, as well as in other industries. I and my team will be available during PDAC 2013 in Toronto and you may contact us during the conference or anytime you wish. ISPAT is as close to you as the enter key on your computer or smart phones. For any questions and information requests on investment issues, you may reach ISPAT via e-mail at info@invest. gov.tr. You may also access our industry reports and information on Turkey’s investment environment and incentives through our official website at www.invest.gov.tr.

CONTACTS M. İlker Aycı President Rebuplic of Turkey, Prime Ministry Investment Support & Promotion Agency (ISPAT) Phone: + 90 (312) 413 89 00 Website: www.invest.gov.tr

01 March 2013

Article www.miningturkeymag.com

Turkey Takes a Leading Role in

Natural Stone Reserves INTRODUCTION Since early times, people have shown desire to use natural stone in their buildings and places of residence. The improving standards of living over time have driven people to use natural stone for its style and durability. This material gradually has become a symbol of wealth and prosperity. The contemporary admiration for natural stone at an age of machines and technology is an attribute to this fact. As nations of the Alp-Himalayan Belt; Turkey, Portugal, Spain, Italy, Greece, Iran and Pakistan possess large calcareous stone reserves (marble, limestone, travertine and onyx). Due to its geographical position on the Alpine Belt, Turkey has many assorted types and large volumes of marble reserves. Furthermore, Turkey’s developing industry and production technology has placed the country amongst the leading stone processing nations. The fact that the natural stone sector in Turkey has managed to industrialize in a relatively short period has helped the sector raise to the level of the leading sectors in terms of exports, industrialization and employment. Turkish marble has been widely used in world famous places due to its rich color scales, different patterns and excellent texture quality. Famous places where Turkish marble is used are shown below. a) In the church of St. Peters entrance hall, which is one of the most important churches in Vatican, marble from Afyonİscehisar has been used in columns and coverings. b) In the White House, the USA, Elazığ cherry has been used in the place where the press statements are made. Elazığ

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Cherry marble has also been used in France Parliament Building, the US House of Representatives. c) The Olympic Village in China is covered with Diyarbakır marbles. d) The German and French Statehouses and the United States Congress Building. In Disneyland, the most famous amusement park in the world, 18,000 m2 of Turkish marble was used. e) In addition to these, many luxury hotels, airports, schools, hospitals, cultural and business centers preferably used Turkish marble in their floor coverings.

COMMON CHARACTERISTIC PROPERTIES OF TURKISH MARBLES Turkey has one of the world’s largest natural stone reserves, which is considered to be excellent quality and exclusive due to great variety of colors and textures patterns. Turkey is among the world’s most important natural stone manufacturers with its huge reserves and well developed processing industry. The properties of Turkish marble are seen below.

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

allows a wide range of choice. About 400 different color and texture qualities are available. Homogenuity of the resources allows the yield of big blocks. Uniformity and consistency in quality Pattern decorative arrangements of colors and crystal composition are possible Good technical properties result in natural resistance to air pollution, wear and dirt.

NATURAL STONE EXPORT FROM TURKEY Natural stone exports have developed rapidly in the last ten years. Turkish stone can be found in the buildings and sidewalks of 173 different countries. Since 2000 Turkey’s natural stone exports increased significantly. According to the statistics seen in Table 1 below received from the Istanbul Exporters Association, the total value of natural stone exports reached $1.9 billion in 2012. More than one third of Turkish natural stone exports go to the China. The increase in demands in the world market and the fast pace of the export has played a very important 2009 Value (USD x million)

2010 Value (USD x million)

2011 Value (USD x million)

Change (%)

China

352.6

595.0

635.4

38.2

The USA

207.7

218.8

236.3

8.0

Iraq

33.0

71.2

81.7

14.7

Saudi Arabia

43.2

45.8

62.5

36.3

United Kingdom

51.1

47.9

45.7

-4.5

Canada

33.1

44.8

43.2

-3.5

France

26.2

32.4

42.3

30.6

Countries

India

34.7

44.2

37.5

-15.2

Israel

26.3

31.0

35.2

13.7

Arab Emirates

26.0

22.2

29.3

32.1

Russia federation

11.8

17.9

28.2

58.1

Germany

21.4

21.8

27.0

23.6

Syria

19.4

23.9

25.1

5.1

Azerbaijan

20.5

17.7

24.7

39.7

Australia

15.9

16.8

22.2

31.8

Italy

19.4

18.9

18.4

-3.0

Taiwan

13.1

12.1

17.7

46.2

Spain

18.4

17.4

16.7

-3.7

Turkmenistan

17.1

20.7

15.3

-26.2

7.2

6.8

10.5

53.1

998.2

1,327.4

1,455.0

9.6

1,232.4

1,560.2

1,663.7

6.6

Singapore Other 20 countries Total

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

NATURAL STONE POTENTIAL OF REGIONS

1000 888

844 800

739

439

688

643

600 400

814

772

700

425

339 244

200

161

146

107

39 0 2006

2007 Blok Marble

2008

2009

Processed Marble

2010

2011

Others

Figure 1: Export of the Turkish natural stone

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

Location

Workable Reserve (x1000 m3)

Marmara

Balıkesir

1,300,000

Bursa

135,000

Kırklareli

role in this sense. The export and production of natural stone products have an important share in the mining sector that has improved in parallel to the investments in recent years (Figure 1). The most value-added-product in exports is processed marble which is cut and polished marble. Processed marble ranks first with a 813 million USD export value in 2011. Block marble is in the second place with 688 million USD.

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

special emphasis on marble. Turkey marble reserves are shown Figure 2.

Aegean

33,500

Afyon

135,000

Aydın

9,000

Izmir

Central Anatolia

1,500

Muğla

181,000

Kütahya

200,000

Uşak

500,000

Ankara

2,000

Eskişehir

960,000

Kırşahir

165,000

Niğde

Figure 2: Natural stone reserves in Turkey

250,000

Grand Total

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

Marmara 38%

Aegean 26%

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

Reserve Quantity (m3) x 106

Reserve Quantity (Ton) x 106

589

1,590

Likely

1,545

4,171

Possible

3,027

8,172

Total Potential

5,161

13,934

Proven

3,872,000

Turkey 33%

World 67%

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

01 March 2013

Region

Marmara

Aegean

Mediterranean

Location Adapazarı

3,500

Balıkesir

7,500

Bilecik

640,000

Bursa

240,000

İzmir

175,000

Manisa

500

Adana

7,000

Burdur

2,000

Hatay

60,000

Ankara Central Anatolia

Limestone Reserve (x1000 m3)

Eskişehir

16,000 475,000

Kayseri

3,000

Konya

70,000

Black Sea

Bartın

1,000,000

East Anatolia

Elazığ

20,000

Southern East Anatolia

Diyarbakır

Total

Region Marmara

Aegean

Central Anatolia

Black Sea

Location Bursa

Travertine Reserve (x1000 m3) 1,200

1.850

35.8

Denizli

652

12.6

Afyon

629

12.2

Tokat

410

7.9

Çanakkale

252

4.9

Muğla

200

3.9

Denizli Burdur

500,000 75,000

İzmir

120

2.3

Çankırı

210,000

Other

1,054

20.4

Total

5,167

100

Nevşehir

100

Sivas

75,000

Bolu-Karabük

10,000

Table 6: Natural stone reserves of Aegean Region

NATURAL STONE POTENTIAL IN AFYON

Total

995,300

Aegean region takes the first It’s known that there are Provinces Quarries (%) place in the list of the marble over 250 kinds of stones production licenses. There Balıkesir 27.00 with different colors, texare three important regions tures and designs in TurAfyon 23.60 for marble resource in the key. The natural stones Bilecik 11.14 Turkey, the first is south and sector today, with its Denizli 7.58 west of the Marmara sea, high production, export Bursa 6.92 the second is in the southpotential and domestic Muğla 6.40 central Turkey and the third market consumption, Eskişehir 4.03 is in south west Turkey, espemakes an important Uşak 2.37 cially around Yatağan in the contribution to the TurkKırklareli 1.90 Muğla and Aydın provinces. ish economy. There are Kırşehir 1.18 more than 2000 quarTable 5: Distribution of ries, small and medium NATURAL STONE the natural stone quarries sized 2,000 factories and POTENTIAL OF AEGEAN in Turkey 9,000 workshops and REGION Others 11% also 300,000 workers in The Aegean Region has the natural stone sector. very rich natural stone re27% of the quarries are serves and approximately situated in the city of 70% of the total natural Balıkesir, 24% in Afyon, stone reserves of Turkey and 11% in Bilecik as are in this region. Turkey’s Figure 3: According to the summarized in Table 5. is known to have a total of regions the distribution of Around 90% of quarries 5 billion m3 natural stone the companies are located in the west reserves and approximately of Anatolia, mainly in 3.5 billion m3 of this reserve the Aegean and Marmara Regions. The exists in the Aegean region. The natural distributions of the companies which stone quarries are located especially in have got marble licenses according to Balıkesir, Afyon, Denizli and Muğla provthe regions are shown in Figure 3. The inces (Table 6).

01 March 2013

Balıkesir

120,000

Table 4: Workable limestone and travertine reserves of Turkey

Reserves (million m3)

Afyon

9,000 2,720,000

Province

The Afyon place is known as one of the most important natural stone production and processing centres in Turkey. Afyon-Iscehisar’s natural stone originate from limestone rocks that metamorphosed under heat and pressure. The main mineral component of Afyon Iscehisar marble is calcite (more than 90%). The sizes of calcite crystals are 0.2 - 0.5 mm, and between 1,000 and 1,700 crystals per cm2 area. Afyon province has 135,000,000 m3 of workable resources and this means 3.5% of workable natural stone resources of Turkey. Most of the Afyon province natural stone and processing plants are located three areas, these areas are Iscehisar, Susuz Boğazı, and the Afyon industrial region. There are over 400 marble processing plants of different sizes operate in Afyon and these companies are processing a great variety of marbles from the Afyon quarries and also from other parts of Turkey. Many of these plants are equipped for slab production with simple machinery, like splitting machines and 1/3 of the block marble production of Turkey is made in Afyon-Iscehisar. According to an MTA report, Afyon white marble reserves are 2,500,000 m3 and Afyon Tigerskin marble reserves are 3,600,000 m3. In Afyon-Iscehisar, over 200 marble processing plants are operating with at least one marble gang saw or one S/T (disccutter). The plaque marble production of Afyon-Iscehisar region consists of

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

Reserves x1000m3

Region

Type

Tavas - Vakıfköy - Çamova Tepe

Marble

72,000

Kocabaş Villiage

Travertine

25,000

Kocabaş - Etence Tepe

Travertine

7,500

Kocatepe - Acadere Zeytinlieğrek

Travertine

10,000

Table 7: Marble quarries and reserves in Denizli

NATURAL STONE POTENTIAL IN DENİZLİ Denizli province is located in western of the Turkey. Denizli is the second province in line after Balikesir in terms of the total visible marble reserves of Turkey, but it is third after Balikesir and Afyon in total marble reserves of Turkey. The region of the Denizli has the richest and excellent travertine reserves. These travertines are known in the world as Denizli travertine. There exist 52 travertine quarries and 90 factories which are located about 10 - 20 km away from the Denizli. Travertines are main export products for Denizli. Produced travertine has been used for cladding of sidewall and other internal and external usage in modern building, structures, water pools, other accessories for modern civil constructions. Both their colors and physical properties vary from location to location in the study area. The Denizli has widespread travertine reserves one of the famous one is PamukkaleKarahayıt and the second is Ballık area travertines since Late Quaternary. The total area occupied by modern and old travertines is more than 100 km2 and its thickness can reach up to 60 m. Turkey has a big share of the travertine production in the world. The United States comes first among exporting countries. Turkey provides about 50% of travertine consumption of the United States. The richest travertine reserves of Turkey in Karacasu, Kocabaş and Sarayköy within the borders of Denizli province. There are a large number of quarries which had been operated in the antique ages around Pamukkale, Yeniceköy and Kocabaş (Table 7). The large travertine quarries of Denizli are Hayrettin Noce, Bianco Rosaa and in Kaklık place which are Kömürcüoğlu’s quarry and Alimoğlu’s quarry.

01 March 2013

NATURAL STONE POTENTIAL IN BALIKESİR Balıkesir province is located in western of the Turkey. Balıkesir is the first province in terms of the total visible natural stone reserves of Turkey. There are large number of quarries and plants which are operated by some companies in Balıkesir. Marble quarries and reserves in Balıkesir (Table 8). Region

Product name

Reserves x1000m3

Marmara Island

Marmara White

1,200,000

Çayüstü Village

Kumru Tuyu

40,000

Manyas-Koçoğlu Village

Manyas White

40,000

Ayvalık-Bağyüzü Village

Ayvalık Granite

Bigadiç-Çayüstü Village

Onyx Marble

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

Probable reserves (x103 m3)

Giresun

115,965

Ordu

64,025

Rize

32,100

Trabzon

14,760

Bayburt

9,840

Gümüşhane

9,300

Total

245,990

Table 10: Probable Reserves in Eastern Black Sea

300 7

Table 8: Marble quarries and reserves in Balıkesir

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

Product name

Geological Reserves m3

Karahallı, Duraklı village

Uşak Green Marble

600,000

Hacı Hüseyin Village

Yellow Marble

600,000

Hacı Hüseyin Village

Uşak White Marble

400,000

Akhisar - Efkafteke Village

Aegean Brown Marble

25,000

Table 9: Marble quarries and reserves in Uşak

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

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NATURAL STONE VARIETIES IN TURKEY

Turkey, due to its location in the AlpineHimalayan orogenic belt, has numerous natural stone deposits. Turkish natural stone industry has proved its consistency and continuity in the commercial arena by supplying more than 250 kinds of stones with different colors and patterns. Approximately one hundred of these natural stone are well known in the international market and are regularly demanded. The best marble reserves are located in Afyon, Eskişehir, Elazığ, Balıkesir, Denizli, Muğla and Çanakkale. The best known varieties of Turkish marble are shown in Figure 4. I) Elazığ Cherry: Elazığ cherry is made of serpentinized and carbonated ultrabasic rocks. It is found as tectonic breccia and located around Elazığ - Güleman / Altınoluk village. Red green pebbles are attached with the same colored cement. Recommended usage of area can be used in interior exterior plating, wall cladding and decoration.

a) Elazığ Cherry

b ) Akşehir Black

polishing and the shaping and the cutting rate are all excellent. There isn’t any risk of rusting. It can be utilized in interior, exterior plating, statues, decorations and monuments. Block dimensions vary between 50 x 1.20 x 0.80 m and 3.0 x 2.0 x 1.2 m. There are quarries which can provide larger blocks if desired. IV) Denizli travertine may be white, light yellow and dark yellow colored. It is usually found over clayey, sandy and alluviums. Denizli Travertine consists of 30 - 100 micron grain sizes and micritic calcite grains of 1 - 4 microns. It has a porous texture. The Denizli travertine can be used in interior and exterior cladding, floor covering and decoration. The travertine is suitable to be processed in blocks and plates and offers good shapeability. The marble is normally polishable. There is no rusting risk. Block dimensions vary between 1.50 × 1.50 × 0.80 m and 2.40 × 2.40 × 2.00 m. Larger blocks can be obtained from the portions where the fissure intervals are very wide.

c) Afyon White

d) Denizli Travertine

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

II) Akşehir Black Marble: This marble is showing catalastic texture in general and has white calcite veins and brown styoliths. Calcite crystals of sizes between 0.9-1.9mm and also found as bands. It can be used in interior exterior cladding and decorative arrangements. It is suitable to make block and plate and can be easily cut and polished. It is located around Konya - Akşehir in Turkey. III) Afyon White: This marble is a classical metamorphic and consists of calcite crystals texture and also contains occasional yellow veins. Its suitability for making blocks, plates, cutting sides and corners,

01 March 2013

REFERENCES 1- Ayhan, M,. Topal, E,. Akkoyun, Ö,. 2005. Diyarbakır Mermer Sektörünün Türkiye Mermer Endüstrisindeki Yeri ve Çözüm Önerileri. Dicle University Mining Engineering Department. 2- Çapik, M., 2010, Natural Stone Production with Emphasize on Turkey. Technical Project Work, Montanuniversitat Leoben, Austria, 3- Çapik, M., Yılmaz A.O., Karaca, Z,. 2012. An Overview on Natural Stone Producing Companies in Turkey, Mersem2012, Proceedings of the Eighth International Marble and Natural Stone Congress of Turkey.13-15 December 2012 Aftonkara-

hisar, Turkey, pp. 249-258. 4- Çelik, M.Y., Sabah, E., 2008. Geological and Technical Characterization of Iscehisar (Afyon -Turkey) Marble Deposits and the Impact of Marble waste on environmental pollution. Journal of Environmental Management 87 pp, 106 - 116 5- DPT, 2006 Dokuzuncu Kalkınma Planı 2007-2013, “Madencilik Özel İhtisas Komisyonu Raporu” 6- Kuşçu, M., and Bağcı, M., 2003. Afyon Mermer Sektörü ve Türkiye Mermer Sektöründeki Yeri. Türkiye IV. Mermer Sempozyumu (Mersem’2003) Bildiriler Kitabı 18-19 Aralık 2003 Afyon, pp 126 - 138. 7- Ozkul, M., Varol, B., Alçiçek, M. C,. 2002. Depositional environments and petrography of Denizli travertines. Bulletin of the Mineral Research and Exploration, 125, pp, 13-29. 8- RTME; 2012 Republic of Turkey – Ministry of Economy, Natural Stone Sector. www.economy.gov.tr 9- Stone 2006 Stone Sector, The International Stone Industry and the Standing of Turkey, p,78. 10- www.immib.org.tr2013 11- www.stoneinturkey.com/2013 12-www.cbi.eu/download/mid_preview/3909.pdf CBI market survey: The Natural Stone and Stone Products 13Market in the EU. 19/02/2010. 14- www.tummer.org.tr/ 15- www.stonecontact.com/Main.aspx ?pid=ProductSearch&countryID=209/ 2013 16- www.turkishstones.org/ts/2013 17- www.migem.gov.tr/2013 18- Uyanık, 2009 Natural Stone, İGEMEExport Promotion of Turkey 19- Yagız, S., 2006. Overview on geomechanical assessments of Denizli travertines in Turkey. The Geological Society of London, pp 384-391.

CONTACTS Mehmet Çapik Karadeniz Teknik Üniversitesi, Müh. Fak, Maden Müh. Böl., 61080, Trabzon - Turkey Phone: +90 (462) 377 40 57 Fax: +90 (462) 377 35 33 E-mail: capik@ktu.edu.tr

Article www.miningturkeymag.com

Minor, Critical and Strategic:

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

Chemical Formula

%Sb

Stibnite

Sb2S3

71.7

Tetrahedrite

3 Cu2S. Sb2S3

29.8

Jamesonite

2 PbS. Sb2S3

29.8

Oxides

Chemical Formula

%Sb

Senarmontite

Sb2O3

83.5

Valentinite

Sb2O3

83.5

Cervantite

Sb2O3. Sb2O5

79.2

Stibiconite

H2 Sb2O5

74.8

Mixed Oxides-Sulfides

Chemical Formula

%Sb

Kermasite

2 Sb2S3. Sb2O3

83.5

More than 70% of antimony mine production is converted to antimony trioxide (some used as feed for metal and other product output), which is used

01 March 2013

principally in flame retardant formulations for textiles, plastics and rubber, and in catalysts for production of polyethylene terephthalate (PET). The principal use of antimony metal is as an ingredient in alloys where it imparts hardness, strength, anticorrosion and other properties. Antimonial lead is used chiefly for automotive and stand-by batteries. Other uses are in solders, ammunition, corrosion resistant pipes and cable sheathing . Glass 9 %

Batteries 19 %

Flame Retardands ( for Plastics) 72 %

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

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

PRODUCTION AND PRICES According to the U.S. Geological Survey China is by far the biggest antimony producer in the world and is likely to dominate the market for more than 100 years. In 2011 China produced 150,000 metric tons Sb equivalent antimony ore, by accounting for almost 90% of world total production. The important question here is how Chinese dominance is affecting the market? It is obvious that changes in Chinese government policy are the most important factor affecting the market especially prices. The Chinese government is also trying to improve the environmen-

Compound Annual Growth Rate (%)

2000

2010

Main Market Driver

70,000.0

103,500.0

4.0

Polymer Demand

6,000.0

11,400.0

6.6

PET Demand

Non metalllurgical Flame Retardants Plastic Catalyst Heat Stabilizer Glass

1,400.0

2,600.0

6.4

16,000.0

1,700.0

-20.1

PVC Demand CRT and Solar Glass

Ceramics

1,700.0

2,500.0

3.9

Construction

Others

1,500.0

1,840.0

2.1

General Economic Growth

96,600.0

123,540.0

2.5

Sub Total Metallurgical Lead-Acid Batteries

40,000.0

53,000.0

2.9

Automotive Production, replacement

Lead Alloys

11,000.0

23,000.0

7.7

Construction

Sub Total Total Source : Roskill

51,000.0

76,000.0

4.1

147,600.0

199,540.0

3.1

World Mind Production 2011

World Mine Production (Sb Equivalent) tons 2010

2011

5,000.0

150,000.0

Russia (Recoverable)

3,000.0

South Africa

3,000.0

Tajikistan

2,000.0

Other Countries

4,000.0

6,000.0

167,000.0

169,000.0

Bolivia China

World Total (Rounded)

Tajikistan 1%

Other Countries 3%

was one of the top three critically high risk elements.

Bolivia 3%

South Africa 2%

Risk List 2012

Russia (Recoverable) 2%

China 89 %

Year

Price per ton

2000

$1,429.00

2001

$1,286.00

2002

$1,950.00

2003

$2,405.00

2004

$2,907.00

2005

$3,808.00

2006

$5,727.00

2007

$5,985.00

2008

$6,346.00

2009

$5,459.00

2010

$9,495.00

2011

$15,360.00

2012

$12,963.00

$20,000.00 $15,000.00 $10,000.00 $5,000.00 $0.00 2000 2002

2004 2006

2008

2010 2012

Source: United States Antimony Corporation

tal impact of the industry, when we add the concerns over diminishing reserves in China; this leads them to suspensions and closures at mines and smelters. In 2010 China closed some of the mines and smelters, this caused a supply problem and peak in the prices as shown in above graph. The Chinese government not only closes the mines and smelters but also puts some export restrictions and quotas. It is unlikely that this will change in the near future, and no substantial new production will be added to global supply.

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

Leading Producer

Symbol

Rare Earth elements

REE

9.5

China

Tungsten

9.5

China

Antimony

9.0

China

Bismuth

9.0

China

8.6

China

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

Relative Supply Risk index

Element

Source: British Geological Survey

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

NEW DEVELOPMENTS One of the biggest problem in todayâ&#x20AC;&#x2122;s world is energy, but because of the increasing concerns on nuclear energy and fossil fuels, we are forced to find alternatives, for that reason the world tries to develop renewable energies like solar, wind etc. But the biggest issue with energy, especially for electricity is that demand should be in constant balance with electricity supply. Any shortages of supply would normally have to be made up from other sources immediately. We need electricity even when the wind 01 March 2013

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

Antimony Ore Production By Years YEARS

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

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

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QUANTITY (TONNES)

2003

650.00

2004

8,711.00

2005

28,377.00

2006

25,316.00

2007

28,211.00

2008

50,357.00

2009

24,917.00

2010

25,974.00

Known antimony miners and producers in Turkey are as follow;

Source: http://www.migem.gov.tr/links/ istatistikler/2003_2009_URETIM_%20 BILGILERI.mht Migem = Turkish Republic Ministry of Energy and Natural Resources - General Directorate of Mining Affairs

•• Cengiz Holding: (www.cengiz.com.tr/

maden.asp) They are operating Ödemiş - İzmir antimony mine and they had a flotation facility. It was formerly Eti Mining property but was privatized. They have very low quantities of production.

These data and reserve table are taken from 8th Quinquennialy report, and one of the most important sentences in this 8th Quinquennialy report is, “11% percent of our antimony reserves is in visible resource category”. Actually this means that we don’t know the real potential of Turkey with regard to antimony resources, even known mineralization’s with limited exploration on them, resulted with 330,000 tons metal equivalent, which is one of the most important resources in the world. With having this world scale resource, it doesn’t seem that we have same scale of production of antimony.

•• Özdemir Antimony: (www.antimuan.

com/en/) Oldest antimony producer. They are operating antimony mine in Turhal - Tokat. They have flotation plant, smelter and trioxide production facility. It is a subsidiary of one of the Turkey’s biggest gold producer Koza Gold.

•• Tri-Star

Resources: (www.tristarresources.com) They are exploring the antimony mine in Göynük Gediz - Kütahya. They also had a pilot plant for ore enrichment.

•• Suda Maden (SudaMin): (www.suda-

Antimony Reserves in Turkey Reserves (Metric Tonnes) Location Balıkesir Susurluk - Demirparı Balıkesir İvrindi - Korucu - Taşdibi

Grade (%Sb)

Measured

Indicated

Inferred

Total

1.16

11,250

235,600

283,450

47,850

Balıkesir İvrindi - Korucu - B.Yenice

6.2

1,370

17,850

26,000

45,175

Balıkesir - İvrindi - Kayapa - K.Yenice

6.0

5,120

8,000

91,350

104,470

Bilecik - Söğüt - Dudaş

2.0

10,000

Bursa - İnegöl - Sulukluköy

6.5

15,000

İzmir - Ödemiş - Emirli

4.8

575,331

1,015,291

1,596,622

Kütahya - Gediz - Dereköy

2.0

364,000

Kütahya - Gediz - Göynük

1.2

924,000

Kütahya - Simav - Dağardı

6.4

2,584,440

Niğde - Gümüşler - Canyarığı

2,530

Niğde - Gümüşler - Örendere

4.5

100,000

Tokat - Turhal - Çamlıca

200,000

Tokat - Turhal - Özdemir

43,000

111,000

150,000

304,000

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

REFERENCES

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

•• ADK

Mining: They have a mine inZorkun - Hatay. They only have ore production. But this mine is a new discovery and wasn’t known before. Company has 3 licenses covering roughly 60 km².

•• Zirve

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

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

CONCLUSION Antimony classified as “Minor Metal”, and with current supply problems, and expected exhaustion of Chinese mines will increase the minority of the antimony together with the prices. New developments on grid level energy storage, currently shows that antimony doesn’t have a substitute in this application. We are talking about the giant batteries and giant batteries need huge amount of antimony.

•• Tempo

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

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

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

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

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

1- Anderson, Gorby G, “The metallurgy of antimony”, Chemie der Erde - Geochemistry, V. 72, Issue 4, P.3, July 2012 2- Bell Terrence, Metal Profile: Antimony, www.about.com 3- www.myanmar-sb.com/aboutantimony.html 4- “Antimony: A Metal?”, www.HardAssetsInvestor.com 5- Antimony, Metal Bulletin Montly, May Issue, p.44, 2007 6- www.usantimony.com/ 7-Ancoa Ltd Study of the antimony market, Roskill Consulting Group Ltd., 17.10.2011 8- Annex V to the Report of the Ad-hoc Working Group on defining critical raw materials, European Commission, 30.07.2010 9- Mineral Commodity Summaries 2012, U.S. Geological Survey, January 2012 10- www.miningfeeds.com 11- www.ted.com 12- TBMM (Turkish Parliement) Minute Bulletin, Period:20, Volume:46, Year:3, Page:52, 03.03.1998 13- Turkey State Planning Institute, 8th Quinquennially Development Plan ,Mining Experts Commission Report, Metalic Mines SubGroup, Other Metals, Antimony, Tungsten, Nickel, Vanadium, Molybdenum, Tin, Manganese WorkingGroup Report, 2001, DPT:2629-ÖİK:640

CONTACTS Sait Uysal Mining Professional E-mail: saituysal@gmail.com Website: www.saituysal.com.tr

01 March 2013

Article www.miningturkeymag.com

Historical Mining and Processing Centers

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

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

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

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

12,000

10,172 10,511

10,000 8,000 6,000 4,000 2,000

8,105

11,480

9,216

6,214 5,166 3,613 2,587 1,916 1.5 1.4 1.5 1.2 1.4 1.2 1.2 1.4 1.1 1.1

12.00 10.00 8.00 6.00 4.00 2.00

0 0.00 2000 2002 2004 2006 2008 2010 2012 2014 Years Figure 1: Mining Industry Revenues (Data from: MIGEM, 2012)

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

600 478

500

409

400

318

300 200

138

188 50

236

100 0

2004

2005

2006

2007

2008

2009

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

mining, metallurgy, archeology, and for investment communities.

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

ther evidence of their mastery in mining and metallurgical areas is gathered from inspection of unearthed metallic works and tablets describing manufacture of weaponry. Urartians also had good knowledge of local geology, and intentionally used chemical fluxes (Pb, Rb, and Li) to attain desired firing temperatures (Akça et al., 2010). It is believed that their craftsmanship had been passed from Lake Van area to the neighboring central Anatolia first, and then Etruscans carried it from there to Aegean and as far as Italy (Günaltay, 1987). Today, the Urartian metallic art objects are spread all over the world in the hands of collectors, traders and museums (Musceralla, 2006). Archeological work in the area has been going on since late 1970’s, but not a single mining site was found until the discovery of the Balaban site in 1990 (Kaptan, 1990). The Balaban site, near the Tatvan-Van state highway running along the east side of Lake Van, and a location near Bahçesaray remained the only historical sites which appeared in the local mining/geological literature (Şener et al.,

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

Balaban The village of Balaban is located at about 92 km of Van - Tatvan state highway. The iron ore body and the smelting center is at the “Mağara Tepe” locality, and is identified as a the oldest known iron ore mining operations belonging to the Urartian period (Belli 2004, Sener et al., 2007). There are two mining tunnels (Figure 4a) in Mağara Tepe which are excavated vertically to each other. The ore consists of hematite and specularite. The ore is melted at the closest stream valley to the mine. All of the ceramic pieces (Figure 4b) were found on the east side of the area known as the Pero Field, and are remnants of the Urartu Operations. It is believed that there were no mining operations after 6AD, because no pieces belonging to younger age have been found in the area (Sener et. al., 2007). The ventilators found in the operations have a rectangular cross-section. Rectangular-shaped ancient ventilators have not been found elsewhere in Anatolia (Belli, 1991). The ventilators, found are 3 - 5 cm long, but they must have been longer as originals. They are man-made 01 March 2013

a) Balaban (Photo: Y.Ates)

b) Evidence Processing (Photo: S. Şener) Figure 4. a) Balaban Site, b) Evidence Processing

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

Bahçesaray The ancient mining remnants in Bahçesaray include a single horizontal tunnel (Figure 5) which is located in an area known as Guvercin Tepe (Peagent Inns) and Kırmızıköprü smelting site. At Bahçesaray Kırmızıköprü, slag piles and ruins of stone miner’s houses from the old ‘pürneşe (happy-lively)’ mining operations’ are visible today. The main ore is sphalerite. Limonite, hematite, and pyrite, are also present as minor minerals. The ore was transported to the shores of the Bahçesaray River and was smelted there using forests of the time as the required fuel source. The main gang minerals are calcite and quartz. This mining operation must have had significant importance for Rusahinili (Toprakkale) and Sardurihinili (Çavuştepe) Urartian kingdoms (Belli, 1991).

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

place there (Figure 6). The site was first described in the mining/metallurgical literature by Ates and Kılıç (2012). Accoordingly, there is a paved highway connecting the village and the town of Erciş near northern shores of Lake Van. This valley is intruded into by several creeks forming the Zilan (Ilıca) River and it is one of the largest drainage channels in the basin of Lake Van. One of the oldest settlements known around Erciş, called “Zernişan Kale” by local people (“Zernaki Tepe” by Burney 1958) is situated at the entrance of Zilan Valley. The word “zern-” in its name, in Persian, means “golden” and “kale” means fortress. The establishment of the settlement was dated to the Urartian era by Burney (1958), but Sevin (1997) concluded that it should rather belong to the times of Shapur the Great (241 - 272 AD) of Sassanid dynasty. In 2007 during a trip to the valley a former mining area was discovered by chance. The mining complex is accessed by leaving the paved highway and turning west from the hot springs facilities near Hasanabdal Village to an unpaved seasonal road. This road runs through the north flank of a small valley with a creek running approximately in a west to east direction and joining the Zilan River. The remnants of the historical mining facilities are located on both sides of this small valley.

Mining and processing evidence at the site

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

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The specific mining and processing descriptions of the facilities found at these locations are given by Ateş and Kılıç, 2013. There is a rectangular well, in fact

mining shafts, in this location with 1.4 x 2.5m cross-sectional dimensions that narrows down to a 1x1m square dimension at about 2m-depth. One of the rectangular shafts, sunk from a steep rock slope to follow a near vertical ore vein, gently spirals down with its bottom invisible. Its total depth could not be determined at this time but, from the sound of falling debris on water, is estimated to be at least 10 m. In another location, there is a stone-chip yard. The chips are hand-sized and cover an area of about 100m2. These are likely to be rejects from the larger ore-bearing pieces from which the valuable ore was recovered. In the center of the yard, there is a vertical shaft (2.4 x 2.4m) filled with similar stone chips. Moving away from the site at a vertical angle to the creekline and to a higher elevation, there is another smaller chip-yard area with no shaft. This could be an area where the master craftsmen worked, or/and an area where a secondary ore recovery took place. Four samples are analyzed for their mineralogy and chemical composition. Two of these samples are from an ore vein, and the other two are from heaps of what appears to be the processing rejects and the hill on upstream; respectively. Chemical analyses are done using Inducted Coupled Plasma Optical Emission Spectroscopy (ICP-OES). The mineralogy is determined by using oriented powder samples by means of X-ray diffraction (XRD) analysis; using a Panalytical X PERT PRO MD x-ray diffractometer (40 kV, 20 mA) Ni filtered CuK radiation. The XRD and chemical analyses show the samples taken from the ore vein are rich in Manganese (Mn) and Barium (Ba). At the same time the samples taken from outside the vein are poor in terms of Mn and Ba; confirming them as rejects. The chemical analyses show the ore vein being rich (14.6 and 15.4%) in MnO in both samples taken from there. One of these samples is also rich in barite (BaSO4, 14.9%), a mineral of barium. Thus, it is concluded that the Zilan Valley Mining and Processing Complex

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

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

was mining and processing Pyrolusite (MnO2), Barium or both. More details and discussions about the Zilan site can be found in Ates and Kılıc, 2012.

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

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

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

REFERENCES 1- Akcil, A. (2006) Mining History in Anatolia-PART 1, CIM Magazine 1 (1), 90-92. 2- Akça, E., Arocena, J., Kılıç, S., Dingil, M., Kapur S. (2010). Preliminary chemical and micromorphological observations on Urartu (800-600 B.C.) ceramics, Eastern Turkey. Geoarchaeology 25/2, 233-244. 3- Ateş Y. And Kiliç S., 2012. A report on the medieval mining and ore processing complex: Zilan Valley, Van, Turkey. Mediterranean Archaeology & Archaeometry, Vol. 12, No. 2, pp. 105-115. 4- Belli, O. (1991) Ore deposits and mining in Eastern Anatolia in the Urartian pe-

riod: silver, copper and iron”, In Urartu, A Metalworking center in the first millenium BC, R. Merhav (ed.), Jerusalem, 16-41. 5- Belli, O., 2004. Anadolu’da kalay ve bronzun tarihçesi. Istanbul, Turkey: Vehbi Koç Vakfı. 6- Burney, C. (1958) Eastern Anatolia in the Chalcolithic and Early Bronze Age. Anatolian Studies, vol. 8, 157-209. 7- E&MJ, 2010. Mining in Turkey, a country thirsty for its own mineral reserves. Engineering and Mining Journal, January 2012. Pp. 41-67. 8- Günaltay, Ş.M. (1987). Yakın Şark II, Anadolu, en eski çağlardan Ahameniş’ler istilasına kadar. Türk Tarih Kurumu Yayınları No VIII. Türk Tarih Kurumu Basımevi, Ankara. 2. Baskı. 9- Kaptan, E. (1990). Findings related to the history of mining in Turkey. Mineral Res. Expl. Bull.. 111. 75-84. 10- MIGEM, 2012. MIGEM (General Directorate of Mining Affairs). Distribution GDP over the years. www.migem.gov.tr/ links/istatistikler/GSMH_DAG.mht (last accessed: 10.08.2012) 11- Mining Law, 2004. Maden Kanunu (Mining Law). Chamber of Mininig Engineers’ publication, Ankara, XXX p. 12- Muscarella, O.W. (2006) Urartian metal artifacts: an archaeological review. Ancient Civilizations vol. 12 no 1-2, 147-177. 13- ISPAT, 2010. Turkish Mining Industry Report. Investment Support and Promotion Agency of Turkey (ISPAT). July 2010. 14p. 14- Şener, S., Şenol, M., Çolakoğlu, A.A., Şener, E. (2007) The Urartu Civilization Era Iron Mining in Bitlis Metamorphics Belt,: Bahçesaray and Balaban (Van) Example, 60th Turkish Geological Congress, 16-22 April Ankara, p.163-165. 15- Sevin, 1988. The oldest highway: between the regions of Van and Elazığ in eastern Anatolia. Antiquity, Vol. 62, No.: 236, pp. 547–551.

CONTACTS Yusuf Ateş Department of Civil Works, Süleyman Demirel University, Isparta, 32260 - Turkey Email: yusuf_ates@yahoo.com yusufates@sdu.edu.tr

01 March 2013

Article www.miningturkeymag.com

The Power of Plants for Gold Prospecting Over 100 years ago a short paper entitled ‘The lixiviation of gold deposits by vegetation’ reported that the wood of the Baromalli tree (Catostemma fragrans) in Guyana contained gold. This was the first suggestion that the analysis of trees to determine their gold content might assist the prospector in locating zones of mineralization concealed by soils or other types of overburden. Over the following 80 years a few publications appeared with new data on gold in vegetation, including a report of extraordinarily high levels (640 ppm Au) in the ash of horsetails (Equisetum) from Czechoslovakia. Such concentrations would make the horsetails mineable by just cultivating crops, harvesting them, and extracting the gold from the ash! However, this potential ‘phytomining’ of gold has proved to be nothing more than an artifact of an inadequate analytical technique. Other than gravity separation of sediments in placer mining, there is still no mining substitute for physically removing gold-bearing rocks from the ground and processing them to extract the small traces of gold that are typical of even a ‘rich’ gold deposit. These early observations of gold in plants have piqued the imagination of subsequent researchers and prospectors, and over the past 40 years the significant advances in analytical chemistry have resulted in a greatly enhanced database on the gold content of vegetation.

be at the interface between the root system and the soil, or between different tissues comprising the plant. For example, in black spruce (Picea mariana) uranium concentrates in twigs whereas needles have much lower concentrations. In this case the twigs would be considered “practically non-barrier”, whereas the needles would fall into the next category of lower barrier. The perfect ‘non-barrier’ plant does not exist, because all plants have a threshold above which no more of an element can be absorbed. However, there are a number of plant tissues that are almost non-barrier. Every field geologist is likely to have witnessed the extraordinary physical strength of plants. Roots can wedge apart cracks in rocks and locally penetrate deeply into the surface in their endeavour to sustain a firm support for the growing plant, and in their search for water and the nutrients that they need to survive. In addition to the great physical strength of roots there is a powerful chemical microcosm in their immediate vicinity. The highly corrosive nature of the plant-substrate interface can be seen in Figure 1 where the roots have changed the oxidation state of the sediment as they have extended down into unoxidised material.

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

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

At this interface the roots can be very selective – absorbing those elements that they require for their survival and health, while excluding elements that may be harmful and tolerating others. Once absorbed by roots the elements are distributed within the plant according to growth requirements. The ‘tolerated’ elements are mostly translocated to plant extremities where they are sequestered out of harm’s way. Gold can be considered as one of these ‘tolerated’ elements: the highest concentrations of gold within many species are in the outer bark, twigs, and at the tips of leaves. Hydroponic studies at CSIRO in Australia have shown, too, that gold concentrates in the bark portion of twigs. This ‘acropetal’ tendency is, from the point of view of prospecting, fortuitous because the outer parts of trees and shrubs are the easiest to collect. Gold can enter plants in various chemical compounds including a) chloride complexes, e.g. Au2Cl6, b) bromine complexes such as Au2Br6 in the presence of the sulphate ion which acts as an oxidant; c) some iodine complexes; d) thiosulphate; and e) organic complexes. Amongst the last are the cyanogenic glycosides that are produced by more than 1000 plant species. These compounds are formed by plants from one of four amino acids, and because of the high solubility of gold in the presence of cyanide compounds they provide an excellent pathway for the transfer of gold into plant structures. Some plants of the genus Prunus and others of the rose family contain cyanogenic glycosides. The scanning electron microscope (SEM) can be used to observe where elements nucleate within a plant. Studies of these phases are few, but there is evidence that common mineral phases occur as well as

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

RELATIONSHIP OF GOLD IN PLANTS TO GOLD IN SOILS AND ROCKS

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

•• which soil horizon should be collec-

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

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

ted?

•• which size fraction of the soil should

Douglas-fir Bark (n=12)

be analysed?

•• which type of tree tissue (and from

••

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

which part of a tree, top or bottom, north or south) should be collected for comparison with the underlying soil? at what time of year should the comparison be made, since there are seasonal variations in plant chemistry?

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

Engelmann Spruce Bark (n=13)

Au (ppb)

As (ppm)

Au (ppb)

As (ppm)

Forest Litter

.13

.10

.48

.58

A- Horizon

.63

.65

B- Horizon

.60

.55

.79

.80

C- Horizon

.76

.64

.90

.88

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

Rocks

Fir Twigs - Ash

Fir Twigs - dry

Au ppb

684

845

553

258

165

456

634

512

540

1820

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

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

COLLECTION OF PLANT TISSUES Each species of plant has a different requirement for, and tolerance to, the full periodic table of chemical elements. Although there are now useful guidelines in the literature as to which part of which plant might be the more informative for gold exploration, it is commonly useful to start a survey by undertaking an orientation study. This will establish which species is the most common within a proposed survey area (mixing species is not a good idea because of their varying abilities to accumulate metals), and provide an opportunity to undertake a small multi-species, multi-tissue sampling programme from some strategic sites – e.g. close to zones of known or suspected mineralization and also some background sites in order to establish levels present in areas remote from mineralization. However, if time and/or logistical constraints preclude this phase, then sample selection must rely on published information. Within the northern (boreal) forests of the world the conifers predominate. Some species of conifer (e.g. Pinus brutia – Turkish pine) occur quite commonly throughout southern and western Turkey. Conifers have been evolving for some 350 million years, during which time they have become sophisticated in their selection of and tolerance to metals and other elements. They can withstand great extremes of both physical and chemical environments. For those species that develop scaly barks, gold tends to concentrate in the scales of the outer bark, with substantially lower concentrations occurring in the inner bark and trunk wood. Twigs, especially the most recent several

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years’ growth, also concentrate gold, along with some commonly associated ‘pathfinder’ elements such as arsenic and antimony. Each sample of twigs should consist of a similar number of years of growth, because the chemistry of a twig varies along its length. Most heavy and toxic metals occur toward the tips, because the ratio of twig bark (containing most of the metals) to twig wood increases as the twig diameter decreases. It is therefore important to maintain a consistent diameter of twig (and similar number of years of growth) in order to maintain a constant ratio of twig wood to twig bark. A technique developed to collect biogeochemical samples for gold surveys is to use a helicopter (Fig. 3). This is especially appropriate in remote, rugged and heavily forested terrain. In northern continental climates and at high altitudes it has the added advantage that samples can be collected while there is still a snow cover and after ‘break up’ when the snow has gone but the ground remains too frozen for collection of other surface sampling media.

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

Botão (Borreria verticillata). A background concentration of gold in this species is <0.2 ppb Au in dry tissue. However, close to some of the garimpos the concentrations can be substantially higher, with a maximum of 542 ppb Au recorded. An ash equivalent concentration would be >10,000 ppb Au, or 10g/tonne gold – virtually a mineable plant if sufficient biomass could be cultivated. In the arid to semi-arid regions of the western United States big sagebrush (Artemisia tridentata Nutt.) has been used in the exploration for gold. Studies have concluded that mapping traces of gold in sagebrush can provide a cost-effective guide to assist in locating drill targets for both disseminated and vein-hosted gold, because it is the relative enrichment of gold within a survey area that is the key factor, rather than the absolute concentration. In Australia various species of eucalyptus and acacia have been used in the exploration for gold, and recently the tough spinifex grass shrubs, with very deep root systems, have been used with success in the Tanami desert. Within the boreal and temperate forests of the world there are numerous examples of trees and shrubs highly enriched in gold. Some of these reports are from vegetation growing close to mine sites and the possibility of some airborne contamination cannot be entirely ruled out. However, there are many anomalously high concentrations of gold in vegetation reported from locations deep in pristine forest. Within

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

Gold (ppb) in Outer Bark from Black Spruce

Overburden Thickness

Drill Results

In ash

Dry weight

230

3.7

Near main trench.

120

2.4

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

690

2.5 m

Subcropping mineralization: 0.11 oz/t (3.8 ppm) Au over 60 cm.

450

11.3

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

200

3.5

Mineralization, locally over 1 oz/t (35 ppm), at shallow depth.

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

dium to detect iron and zinc at the chromite deposits near Mersin. Also, an orientation survey by M. Akçay et al. around the Kanköy Deposit near Trabzon using Corylus avellana (hazelnut tree) and Rhododendron luteum concluded that these species could be useful biogeochemical media in the exploration for massive sulphide deposits.

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

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

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

FUTURE DIRECTIONS the La Ronge gold belt of northern Saskatchewan in Canada there are numerous occurrences of gold, a few of which have been developed into small mines. Prior to development of these mines, in 1984 a gold-bearing quartz vein was discovered in an area quite densely wooded with black spruce (Picea mariana). Whereas the exploration geologist had interpreted the direction of this vein, he had no simple way of determining where that it was gold bearing, because its projected extension was under a boggy area, beneath which there was a metre or more of glacial till on top of the bedrock. Black spruce are tolerant of such boggy conditions and so samples of outer bark were collected at a number of locations for 1 km along the projected strike of the quartz vein. Table 3 shows a summary of the analytical data obtained on anomalous samples, and subsequent information obtained when the biogeochemical gold anomalies were drilled. This site was subsequently developed as the Jolu gold mine. It seems that there are no published studies of the use of trees and shrubs for gold exploration in Turkey. Studies by Zeynep Özdemir have assessed the use of Pinus brutia as a biogeochemical me-

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

SUGGESTED READING 1- Brooks, R.R., (Editor) 1992. Noble Metals and Biological Systems: Their role in medicine, mineral exploration and the environment. CRC Press, Boca Raton, Ann Arbor, London, Tokyo. 393 pp. 2- Brooks, R.R., Dunn, C.E., and Hall, G.E.M., 1995. Biological Systems in Mineral Exploration and Processing. Ellis Horwood (Division of Simon and Schuster), Hemel Hempstead (UK), Toronto, New York, 538 pp. 3- Dunn, C.E., 2007. Biogeochemistry in Mineral Exploration, (Handbook of Exploration and Environmental Geochemistry 9, Series editor, M. Hale), Elsevier, Amsterdam , 462 pp. 4- Kovalevskii, A.L., and Kovalevskaya, O.M., 1989. Biogeochemical haloes of gold in various species and parts of plants. Applied Geochemistry, 4, 369-374

CONTACTS Colin E. Dunn PhD, P.Geo, Consulting Geochemist Address: Colin Dunn Consulting Inc. British Columbia - Canada Email: colindunn@biogeochemistry.ca

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Article www.miningturkeymag.com

Strategic Planning & Vision -

the Key to Sustainability in Mining The challenge that faces resource companies is how to create sustainable value while operating within geographic and country boundaries, known and unknown constraints, and variable micro and macro environmental conditions in the market and global economic conditions. Achievment and release of this value is attained by allowing the physical nature of the identified mineral or metal resource, to drive design of the optimal technical solution to mining and processing activity within the mining value chain. For most junior companies this is enough, however developing and resourcing a strategic portfolio of projects that is designed to create flexibility to short and long term business environment shifts, i.e. a portfolio mix that allows distribution of capital to respond to short term cycle variation, within a long term context is often important. The practical achievement of this is only possible through strategic long term planning.

quire assets to generate value and attract investment (financial and social) within the context of a time-based value of money equation. Value generation from the asset(s) can only be achieved through an appropriate business model where the conversion of the Mineral or Metal resources to reserves is achieved and which, are then extracted, processed and sold, timeously. The physical characteristics of a mineral or metal resource are fixed and do not change over time, however they exist at a fixed location so defining a context (e.g. stakeholders, legal, social, environmental, infrastructural) that may change over time according to social and political evolution. This is the spatial context that encompasses location and associated operating environment. The selection of a mineral asset portfolio is affected, primarily by the perceived financial value (investment quantum, returns, and duration), arising from the mineral asset(s). This value construct is driven primarily by the physical nature of

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

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

•• Optimize the composition of the as-

set portfolio to align with business objectives, i.e. the companies clearly defined ‘Strategic Business Imperative’;

•• Build and operate assets within an

anticipated long term business environment and maintain flexibility of short term tactical response to short term shifts in the business environment.

STRATEGIC LONG TERM PLANNING Resource exploitation companies re-

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

under these circumstances increases with movement from a single commodity, single operation in one country business through to a multi-commodity, multi-operation, multinational enterprise as represented schematically in Figure 1. The combination of the spatial context, economic, market, and technical variables can be defined in a range of possible strategic scenarios or global views in which the value from the mineral asset(s) could be realized. The global view attempts to capture the interdependence and uncertainty associated with key elements of the spatial and business contexts across the long lead times associated with financial returns from mining activities. Strategic long term planning of mineral and metal companies must therefore incorporate elements of: Optimization of the mineral asset portfolio composition A long term perspective of a possible business environment Flexibility of exploitation options in the short term. Within this context, strategic long term planning therefore requires a cyclical reassessment of exploitation options (and the composition of the mineral asset portfolio), in the context of anticipated changes in the near and longterm business operating environment. This results in a near term tactical response (typically in a budget period) and a longer-term strategic response (the long term plan), both of which are encapsulated in the company business plan.

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

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

product(s), create the context in which global views or scenarios are developed for application in planning. Global views or scenarios (the centre link part of the diagram) are developed and used to develop long term planning parameters (global assumptions) that represent the relevant underlying assumptions for each scenario, e.g. metal prices, exchange rates, escalation, etc. These planning parameters inform the financial analysis and optimization of the business plan, and create the link between mineral asset portfolio utilization and the market. The annual cyclical business planning process is conducted utilizing the planning parameters (global assumptions) associated with the preferred or most likely global view. The physical characteristics of the individual mineral assets within the portfolio determine the 01 March 2013

development of a mine extraction strategy, the mining right plan, the budget, and long term plan per asset and collectively for a multi-asset business. The business plan then forms the basis upon which the organization is structured and resourced. Supporting, aligned execution plans are developed for the necessary supporting activities in finance, human resources, projects, engineering and infrastructure, and sustainable development, all of which take place in an annual planning cycle. The composition of the mineral asset portfolio is then reviewed and optimized relative to the most likely scenario, the current state of execution of projects, and company strategic intent. The business plan, which is the core output of the strategic long term planning process, is then reassessed for a possible shift to the next most likely global view. Real options arising from evolving alternate trajectories are evaluated and a contingency plan is developed, based on planning parameters associated with the alternate scenario.

THE OPERATING CONTEXT The global and national business environments, in conjunction with the characteristics of the market for minerals and metals (and products) create the context in which a mining and metals company should operate. Key elements of this context are;

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

Characteristics of the metals/minerals market Understanding of the market and participants informs value based decisions and influences strategic actions. Understanding of the market and the environment in which the business functions informs the building of global views or scenarios and the associated global assumptions that are used to develop and optimize the investment centres that comprise

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the business plan.

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

Global business environment The global business environment can be defined as the global environment that influences local decisionmaking on resource use and capabilities. This includes the social, political, economic, regulatory, tax, cultural, legal, and technological environments. As businesses have no control over the external environment, their success depends upon how well they adapt to the external environment. The nature of the global business environment will have an effect on the nature of demand and resultant selection of orebodies for mining.

National business environment Similar to the global business environment, the national business environment considers the social, political, economic, regulatory, tax, cultural, legal, and technological environments of the country in which the business is operating. Typically this tends to be focused on legislative and socio-political components. The legislative environment is a key enabler of mining and business activities. Acquisition and effective exploitation of mineral assets is predicated on a well-defined and effective system of legal tenure that will allow investment in long life assets. The exploration for and subsequent exploitation of minerals is subject to a wide range of legislation and regulation; however, mineral asset acquisition and exploitation is governed primarily by the Ministry of Energy and Mineral Resources and ultimately the Prime Ministry in Turkey. Understanding and operating within the context of the legislation applicable to the minerals industry is thus a requisite for effective business functioning and strategic long term planning. Each of these contextual elements contributes to, and influences, the global views or scenarios that create

the context in which business planning takes place.

ASSUMPTIONS ON THE FUTURE - GLOBAL VIEWS AND PLANNING PARAMETERS The reality of the business environment is that it is increasingly complex and dynamic. Developing an understanding of the uncertainty inherent in the external and future environments, and testing the robustness of strategic plans against a set of possible futures, is a critical component of strategic long term planning. Analysing key global trends and seeking to influence the possible business future(s) requires a widening of perspective to a range of possibilities. In the strategic evaluation of mineral asset exploitation options, a view must be taken of possible future(s) and associated parameters that will influence investment decisions. This view, which is encapsulated in a set of common long term planning parameters (the global assumptions), can and does change in line with macroeconomic drivers. The complexity of long term planning parameters (typically forecasts of exchange rates, inflation rates, metal prices, cost escalations, capital escalations, working capital, etc.) and the relationships between them and events that occur in the global economy requires that inherent uncertainty in investment decision making and portfolio planning is communicated through scenario planning. The link between the operating context and the planning of exploitation of the mineral asset is that of global views or scenarios. These are constructed and used to develop long term planning parameters (global assumptions) that represent the relevant underlying assumptions for each scenario, e.g. metal prices, exchange rates, escalation, etc. These planning parameters inform the financial analysis and optimization of the strategic long term plan and the business plan. The key processes and tools to develop global views and the associated planning parameters are:

•• Scenario planning or global view de••

velopment The development of the long term planning parameters.

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

KEY ELEMENTS OF THE PROCESS COMPRISE Determination of the Strategic Business Imperative (“SBI”), i.e. definition of the desired result, for example; ‘To produce 50,000 ounces of Gold at US$750 per ounce sustainably for 15 years.’ The SBI to be achieved as a result of the plans must be simple but definitive! Determination of the key variables and drivers specific to the industry e.g. demographics; innovation, science and technology; geopolitical relations and the role of major influencers such as China; the global economy and globalization; natural resources and the environment. Exploring metal/mineral demand, society issues such as the social licence to operate, government issues, environmental issues, technology and alternative applications, capital and operating cost escalators, competitor actions, etc., aimed at highlighting key drivers, key questions, and setting the context. Developing scenario themes and storylines, writing up the synthesis and scenarios and reviewing the outputs.

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

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

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

The global assumptions are a set of long term planning and economic parameters that best encapsulate the external drivers of value associated with a scenario or global view to be applied in business planning. The aggregated parameters provide a descriptor of a current and future global view and transition between the two. Crucially, the global assumptions provide the link between the agreed global views or scenarios and the associated economic parameters for business planning purposes. The global assumptions create discipline and uniformity of assumptions, as they are the only economic planning parameters permitted to be applied across the organization for planning and valuation purposes. This facilitates comparison and ranking of options.

LONG TERM PLANNING PARAMETERS (GLOBAL ASSUMPTIONS) Cash flow estimates used in discounted cash flow analyses are fundamentally derived from estimates of revenue, operating cost, and capital cost. Extensive effort is directed at estimating costs (both operating and capital) to accuracy levels of less than 10 per cent error during the feasibility studies. Similarly production, grade, and metallurgical recoveries are estimated at comparable levels of accuracy to drive the revenue line. However, an area that is often not subject to the same rigour is the impact on plan viability of assumptions regarding metal (commodity) prices, exchange rates, inflation rates (domestic and foreign), and escalation factors (capital expenditure and operating expenditure). On the assumption that these global parameters are usually rigorously determined for a five-year period and then maintained at long term trend estimates, the adoption of an optimistic or pessimistic long term perspective can have a significant effect on projects with 15–30 year life spans. The risk of not undertaking viable projects because of a pessimistic long term view, or conversely undertaking marginal projects because of an optimistic long term view, is miti-

THE PLANNING AND DECISION MAKING PROCESS - BUSINESS PLANNING The annual cyclical business planning process is executed using the planning parameters or global assumptions associated with the preferred or most likely scenario/global view. The composition of the mineral asset portfolio is reviewed relative to the most likely scenario, the current state of execution of projects, and company strategic intent. The physical characteristics of the individual mineral assets within the portfolio determine the development of a mine extraction strategy, the mining right plan, the budget and long term plan per asset and collectively for a multi-asset business. Concurrently, value is optimized through application of value-based management principles during the development of the strategic long term plan -at mineral asset level and company level for a multiasset organization. The business plan, which is the core output of the strategic long term planning process, is then reassessed for a possible shift to the next most likely global view

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

CONTINGENCY PLANNING Figure 3: Business planning – key elements and interrelationship

which then forms the basis upon which the organization is structured and resourced. Supporting, aligned execution plans are developed for the necessary supporting activities in finance, human resources, projects, engineering and infrastructure, and sustainable development. All of these activities take place in an annual planning cycle and are not necessarily sequential, as feedback loops occur between different activities at different points in the planning cycle. This process is schematically represented in Figure 3.

BUSINESS STRATEGY DEFINITION Overall company strategy, as defined and communicated by the Board, directs the execution of the business objectives and provides the framework for decision making. This is the starting point for strategic long term planning for metals and minerals entities. Typically, company strategic planning follows elements of: •• Information gathering and analysis (internal, external, market) •• Identification of critical issues facing the organization •• Development of a strategic vision sta-

tement that sets future direction

•• Mission statement review/revision •• Development of strategic goals •• Formulation of strategies for each goal

•• Preparation for operational planning based on the strategic plan.

In the strategic long term planning approach, the company strategy directs the objectives of value-based management and defines prioritization logic in the long term planning process, i.e. the overall mineral asset portfolio optimization process is directed by the company’s strategic intent.

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

Contingency planning identifies a controlled trajectory toward reduced or increased output relative to that originally planned in the long term plan and the business plan. Generation of contingency plans allows a rational, controlled shift between one operating state and the next based on earlier analysis. It is a means of reducing the scale of crisis through anticipation and prior sensitization. Contingency planning recreates the link between the business plan and the global views by creating an iterative loop based on a different set of global assumptions. Contingency plan actions are a sequence of logical steps to move toward a lower future output profile from both current operations and future investments. These are evaluated by investment centre and downscaling options may include closure, delay, or mothballing. Three primary factors are used to drive the prioritisation of potential ‘Plan B’ actions:

•• The market price for the product at •• ••

which each investment centre becomes NPV break-even The working cost to revenue ratio for each investment centre as a measure of cost efficiency The potential mine output over the following five years.

The development of these priorities requires input from multiple parties 01 March 2013

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

including the operations, projects, processing, and planning. Annually a contingency plan is developed as part of the long term planning process.

EXECUTION PLANS FOR SUPPORTING CAPABILITY The ability of a mining company to effectively execute an integrated business plan is dependent on alignment of activities of all participants in the company value chain (mining, process, projects and engineering infrastructure, human resources, marketing, corporate affairs, and finance). One of the key objectives of the strategic long term planning framework is to create alignment of activities across functional groupings and along the company value chain. This is facilitated by the integrated process and dependencies created between the business plan and resourcing of the various support functions. The business execution activities of an integrated minerals and metals company can be broadly sub-dividedalong the value chain into two groupings - operating and support. The operating activities are mining and process, underpinned by project and engineering execution. These core operating activities are in

01 March 2013

turn provided support services by the functions of human resources, operational engineering, marketing, finance, and corporate affairs. This is schematically represented in Figure 4.

Process: Alignment of the process value chain activity is primarily capacitydriven. Consideration is given to installed capacity for each of the key process elements such as concentrators, smelters, and refineries. Based on this type of data, opportunities for scale and timing optimization are explored to ensure timing and capital efficiency. Projects: The project portfolio for the company is defined by the project content of the business plan. Each mineral asset has, by virtue of its long term plan, a sequence of projects that require execution, on a timeline, to deliver on the plan. The aggregated project requirements across the company provide the projects portfolio. Engineering and infrastructure: Engineering activities are focused primarily on maintenance of the existing asset base (the routine engineering activities required to maintain the engineering infrastructure) and the establishment of

the necessary infrastructure to match SLTP requirements.

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

Corporate affairs: Corporate affairs manifests largely in the realm of sustainable development. The strategic long term plan provides the basis on which social and labour plans and environmental management programmes are structured to ensure alignment with overall business objectives. Marketing: The interaction between the SLTP and marketing comprises two phases; the supply/demand dynamic and forecast market excesses/shortfalls that provide the initial input into the business strategic intent, and the alignment of sales contracts, by metal, based on the business plan thatarises from the SLTP. Finance: Outside of the routine management accounting and corporate finance functions, finance activities are

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

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

REFERENCES 1- Bradfield, R., Wright, G., Burt, G., Cairns, G., and Van Der Heijden, K. 2005. The origins and evolution of scenario techniques in long range business planning, Futures, vol. 37, pp.795–812. 2- Camus, J.P. 2002. Management of Mineral Resources - Creating Value in the Mining Business. Society for Mining, Metallurgy and Exploration Inc., Littleton, Colorado. 3- Pearson-Taylor, J. and Smith, G.L. 2006. The concept of project value tracking and its application in strategic mine planning at Anglo Platinum. Proceedings of the Second International Seminar on Strategic versus Tactical Approaches in Mining, Australia Centre for Geomechanics, Perth, Australia, 8 - 10 March 2006. Section 8, pp. 1 - 13. 4- Porter, M.E. 1980. Competitive Strategy: Techniques for Analysing Industries and Competitors. Free Press, New York. 5- Porter, M.E. 1985. Competitive Advantage - Creating and Sustaining Superior Performance. Free Press, New York. 6- Smith, G.L. 2011. A conceptual framework for the strategic long term planning of platinum mining operations in the

South African context. PhD thesis, University of the Witwatersrand, Johannesburg, South Africa. 7- Smith, G.L., Surujhlal, S.N., and Manyuchi, K.T. 2008, Strategic mine planningcommunicating uncertainty with scenarios. Proceedings of the Third International Platinum Conference ‘Platinum in Transformation’, Sun City, South Africa, 6 - 9 October 2008. 8- Van Der Heijden, K., Bradfield, R., Burt, G., Cairns, G., and Wright G. 2002. The Sixth Sense: Accelerating Organisational Learning with Scenarios. Wiley, Chichester, UK.

CONTACTS Alan Clegg Chairman, Afrasia Mining & Energy Consulting AS Head Office: Mustafa Kemal Mah. 2146. Sokak. Demirler Atlas Plaza. No: 14/16. Ankara - Turkey Phone: +90 (312) 219 44 15 Website: www.afrasia.com.tr

M a g a z i n e

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

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In the Shadow of

Die-Hard Legal Concepts Mining history in Turkey spans over centuries, if not millennia. Despite the meandering around during the Republican era that commenced by the beginning of 1920s, the mining sector has come of an age since the first Özal cabinet (liberal centrist) was voted into the office by a landslide back in 1983, when there was an urgent need to undo the nearly disastrous consequences of the Energy and Natural Resources Minister (social democrat) Deniz Baykal’s ill-conceived nationalization attempts during the second half of 1970s. The Mining Law (No. 3213) of 1985, as amended by Laws No. 5177 and 5995 respectively, marked a turning point in these fast-changing times. The Mining Law of 1985 did not only aim at tackling ensuing problems of the said messy nationalization, but also to break free with some of the conceptual features of the Mining Law (No. 6309) of 1954. The Mining Law of 1985 should also be seen in the context of Article 168 of the new constitution that came into force in 1982 following a popular vote. With the heading of “Exploration and Operation of Natural Wealth and Resources”, the Article 168 also has a few salient hallmarks that are distinct from that of the 1961 Constitution (Article 130). In this article I endeavour to revisit the haunting discussion as to whether mines are movable or immovable in light of few examples from the legislative pieces that are currently in force. My intention is not to provide a theoretical insight, quite the opposite. I will therefore come to the conclusion that the Parliament and other law-making bodies should go around this prickly issue inherited from Roman thinking and galvanised by the German Pandectist school (i.e. the writers of the laws of the country), thus, when legislating, take into account what is best-suited for the modern mining practices in these

01 March 2013

challenging times.

INTERPLAY BETWEEN CIVIL CODE AND MINING LAW In general, minerals remain the property of the state (people) until they are extracted from the ground. The “right to mine” is usually subject to government approval with few exceptions around the world. Thus, the license-holder acquires an interest in the “right to mine,” or in future production. Often the key question for financial investors is whether insitu minerals are a conveyable property interest. In Turkey, in-situ minerals are not considered belonging to the people (demos) or the state in the sense of “the law of property”, but rather something “under the control and at the disposal of” the state (devletin hüküm ve tasarrufu altında bulunan). As one can see that it is blind to the Roman grouping of movable property – immovable property. This sort of (distinct) categorization, visà-vis the concept of “public property”, is in line with the good old Roman concept of “res nullius” (sahipsiz mallar), meaning belonging to no one. A bit disingenuous as it might sound, it needs to be read, to make sense of “belonging-to-no-one”, in the context of either not being able to be owned or not being able to be included in “ius privata” (private property). Until it is extracted from the soil, one needs to be hairsplitting when using classic concepts of property law. According to the Article 5 of Mining Law of 1985, mines are under the control and at disposal of the state, therefore not included in the ownership of the land that they are in. This is a verbatim repetition of Article 4 of the Mining Law of 1954. Back then, it was such a breakthrough due to the fact that the Article 632 of Civil Code, now repealed, enumerated mines among the immovables. The Civil Code specifically, and also quite unequivocally, identified mines as an immovable.

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

The Mining Law of 1954 introduced a mine registry as well (Art. 102 et seq.). This also kick-started another tangential discussion of whether or not the mines are subject to either land registry or mine registry, or both. Article 4 of the Mining Law of 1954 separated mines and their ownership from that of regular immovable properties, chief among them being a piece of land. However, Article 632 of the Civil Code remained intact until 2002, when it was replaced by a new Civil Code. Article 704 of the replacing Civil Code dealt with this issue once and for all, and the mines are no longer specified as an immovable. In other words, the Civil Code, after 50 years, aligned itself with the approach taken by the Mining Law of 1954. Need-

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

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

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

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

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

came into force on January 31, 2013 with its publication at Official Gazette. As known, the states, quite understandably, tend to use standard texts during these negotiations with a little leeway left here and there, also bearing in mind their own WTO commitments. Let us take the Turkey - Australia double tax treaty as an example since it is the most recent one that was signed into law by the Turkish President. Under the subheading of “Income from Immovable Assets”, the Article 6, Para. 2 of this treaty prescribes what “immovable asset” means for the signatories. What is strikingly similar is that for both states mines are considered as an immovable, and the income derived from the rights associated with the mines is therefore seen as an income from an immovable asset [Nota Bene: The double tax treaty with Canada has exactly the same approach, yet a different wording].

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

Anatolian Mines Map from 1890’s

ates by investigating the complaint that is lodged. In case the investigation by the governorate finds that there is an unlawful interference, the law enforcement officers will ensure that the unlawful interference ceases and does not carry on. The Law No. 3091 entails criminal liabilities too. Article 1 of the Law stipulates that unlawful interferences (i) in the res nullius that is under the control or at the disposal of the state (devletin hüküm ve tasarrufu altında bulunan sahipsiz yerler), (ii) in the immovable properties of which benefit belongs to the public (menfaati umuma ait olan taşınmaz mallara yapılan tecavüz veya müdahaleler) come within the ambit of the Law. Here comes the question of if the mine licence-holders can be regarded as the possessors of a res nullius or an immovable property, therefore enjoy the same protection afforded to the aforesaid. If the answer is in the affirmative, then one can perhaps safely assume that this protection could even be extended towards the lease-holder (rödovansçı). Following this line of argument, both the license-holder and leaseholder could enjoy the status of “being in the possession of an immovable”, thus rely on the protection afforded by the Law No. 3091. 01 March 2013

5) Code of Obligations (No. 6098): The Code of Obligations is modelled on Swiss Code of Obligations (OR, Obligationenrecht), and envisages three major types for lease contracts: regular lease (lease of movables; taşınır kirası), lease of immovable (taşınmaz kirası), usufructuary lease (ürün kirası). Regular lease also functions as general provisions that are applicable to all types of lease unless regulated otherwise. It is largely accepted in the legal scholarly world as well as in the settled case law that usufructuary lease applies to royalty agreements, otherwise called mining lease agreements in the continental legal sense. Although the first two types of lease agreements are regulated in detail, usufructuary lease is penned in a way, which shies away from delving into details, rather often makes a vague reference back to primary types of leases. Article 358 of the Code requires that unless there is no specific provision under the usufructuary lease, general provisions regarding lease agreement will apply. This is quite different from the mechanism provided in the OR. It is by all means a foregone conclusion to discern between a regular lease and the lease of immovable. However, it is not that straightforward when it comes to this specific reference made by usufructuary lease back to the “general provisions regarding the lease agreement” since there appears to be no guidance provided to ascertain which type of primary lease agreements is referred to: regular lease or lease of immovable. To answer this question, one needs to explore if a royalty agreement/mining lease is a regular lease or a lease of immovable. This leads us back to the start: the good old discussion of whether a mine is a movable or immovable [Nota Bene: Court of Cassation is of the opinion that the provisions regarding the lease of immovable are not in any way applicable to royalty (mining lease) agreements.].

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

01 March 2013

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

been extended in a fashion to include “rights” as part and parcel of one’s estate. It is believed that this transformation was caused by the invention of the concept of intellectual and industrial property. Be that as it may, mining right was always there, included in one’s estate, and personal wealth at large, even before the IP rights came to appear in different legal forms and texts. The love-and-hate relationship between a mining right and the land that has the mines underneath (yet to be dug out) still remains to be eerily hard to grasp for some. This is further complicated by the notion of mines not being included in the piece of land (perhaps as ius fruendi, and more specifically fructus naturales), but as such entirely parting its legal destiny from that of the land. This detachment occurs on a different level, where “the right of usufruct” as a property right limited in time and scope being sort of elevated into a full-fledged right: “the mining right”. What breaks the camel’s back is, simultaneously with the digging out, the legal metamorphosing that takes place from immovable as in-situ minerals into movable as mine ore (tout-venant) only to be stacked on the ground.

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

CONTACTS Av. Cemâl Dursun Partner at Dursun Özfırat Attorneys at Law. E-mail: cdursun@dursunozfirat.com

Article www.miningturkeymag.com

The Procurement Trio:

Improvement of Procurement by Strategic Sourcing, Supplier Relationship Management and P2P (Procure-to-Pay) Process Design The global economic crisis of 2008 and slow-down in consumer demand mainly in Europe and the USA have created significant urgency on cost controlling for mining companies since demand and eventually price of commodities decreased drastically. Recent signs of a cool-down in the Chinese economy added further pressure on companies to control costs. The pressure is even higher for small-to-medium sized firms such as Turkish mining companies because of the fact that it is harder for them to exploit economies of scale. For certain operations, production costs for key commodities such as copper, aluminum and nickel have already reached, or exceeded, London Metal Exchange (LME) prices. Unless mining companies improve operational efficiency, proactively control maintenance costs and invest in cost reducing technologies, this trend is likely to continue. Since procurement is one of the chief areas of spending for mining companies, it became a critical issue to manage and decrease costs. However, good negotiation skills are not the only tool to obtain significant savings and maximize value gained from relationships with suppliers.

cess of supply chain management and company’s operations. Strategic sourcing provides wide range of tools (Figure 2), tactics and approaches in order to provide an advantageous position against suppliers during purchasing activities. Figure 1: Deloitte’s Procurement Trio

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

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

Suppliers

Item / Category

Figure 3: Spend Analysis 3-D Approach

EFFECTIVE SOURCING REQUIRES THE CORRECT SET OF STRATEGIES RATHER THAN ONLY NEGOTIATION SKILLS First step to achieve success in procurement is to comprehend the fact that there are sets of strategies to pursue before initiating negotiations with suppliers in order achieve best results and maximum savings. Mining companies procure a wide range of products and services with very different supply chain Figure 2: Deloitte Value Creation Framework for Strategic Sourcing

01 March 2013

also from supplier and internal customer standpoint. A three dimensional analysis of spend (Figure 3) provides a complete picture of a company’s purchase volume and features. Item / Category centric analysis is important to observe what items / categories are crucial for the company and what the total volume purchased. Supplier based analysis provides an overview of the total company wide business volume with providers. And analyzing spent from internal customer perspective helps understanding their needs, expectations and minimum requirements. However, understanding the spend by itself is not adequate to decide on which strategies to apply, understanding the supply market is crucial. Strategies to pursue would change significantly if procurement department had multiple suppliers with equal quality and service level to choose or just only one supplier in the market who can provide items / categories (Such big mining machinery vs. company owned automobiles-trucks). One of the best methods to analyze the supply

market is Porter’s Five Forces Approach (Figure 4). It helps to understand characteristics of supply market and company’s position against suppliers. After spend and market analysis is completed, company will achieve a complete comprehension of item / category’s importance for the company. Usually items / categories are classified as strategic, leverage, commodity and bottleneck (Figure 5). Since sourcing strategies differ significantly depending on the criticality of the item / category, it is very critical for the mining company to correctly use all information gathered and accurately position the item / category.

Figure 5: Category Positioning Matrix

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

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

Figure 6: Supplier Segment Examples Figure 4: Porter’s Five Forces

01 March 2013

assessment of suppliers’ assets and capabilities with respect to overall business strategy, determination of what activities to engage in with different suppliers, and planning and execution of all interactions with them. Correct segmentation (Figure 6) of suppliers depends on correct assessment of the current business relationship (business volume, current supplier performance, price / discounts received, etc.), supplier’s capabilities (innovation, technical and system infrastructure, etc.) and prospective relationship based on company’s targets and vision. Thus, the systematic approach in segmentation becomes a critical issue. Criteria of segmentation needs to be very sound and accepted company-wide.

Create Purchase Request

Apporove RP & Create Purchase Order

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

01 March 2013

Pay Suppliers

Figure 8: High Level Procure-2-Pay Processes

with suppliers and define the future estate of their relationships.

to contracts and agreements with suppliers.

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

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

COMPLEXITY IN PROCURE TO PAY PROCESSES DECREASES VISIBILITY, CONTROL AND EFFICIENCY OF CONTRACT MANAGEMENT

Figure 7: Deloitte’s Supplier Segmentation Matrix

Receive Goods

Third cornerstone of Procurement Trio is the restructuring Procure to Pay processes (Figure 8). Companies should understand the fact that procurement does not end at creation and sending purchase order to suppliers. Restructuring Procure to Pay processes means optimizing the processes related with purchasing and recognizing that it extends to include accounts payable and payment processes. The goal of restructuring is not about speeding them up, it is about the optimization of processes introducing control and efficiency as well as reducing risk and clearly defining roles and responsibilities of each task. The key objective is to ensure that sourcing savings are delivered by providing purchasing processes in compliance to contract. By restructuring processes, mining companies become capable of managing costs of operations and administration, cutting length of cycle from sourcing and order to application of payment, gaining insight into vendor relationships and negotiate optimal payment terms, support internal controls and ensure compliance

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

CONTACTS Alper Günaydın Manager, Deloitte Consulting E-mail: agunaydin@deloitte.com

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Need For a

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

DIFFICULTIES IN OBTAINING PERMITS To clarify the vague provision of the Mining Law, the Amendment provided that operation permits shall be issued within three years after obtaining the surface rights and necessary environmental permits. The Amendment, on the other hand, provided only one year for operation licenses which have not been issued an operation permit or have only one year left for the termination of the three year period as of the date of the Amendment. Although the Amendment intended to

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

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

Prime Ministry. Such Circular caused an ambiguity and the Ministries have refrained from taking any action in terms of permits. Like all actions relating to State-owned lands, forestry permit applications were sent to the Prime Ministry for final approval. Pending the approval of the Prime Ministry, issuance of forestry permits, and accordingly operation permits, were suspended. In addition to radically slowing down the approval of forestry permits, the Circular has been particularly criticized for the ambiguity in the Prime Ministry’s scope of review on the applications. Despite heavy criticism from many sectors, there is still no clarity regarding the scope of review or the criterion to be followed during such procedure. The Prime Ministry has also been criticized for not having a special office with the technical knowledge required for the review of such applications. Due to the fact that no threshold is being applied for such additional approval procedure, even forestry permits pertaining to very small areas of land, such as drilling holes, are made subject to the lengthy approval procedure. Such bureaucratic complication and ambiguity is unfortunately expected to discourage foreign investment in infrastructure projects in Turkey.

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

01 March 2013

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

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

ucts. Accordingly, it is important to answer the following questions in order to define an unpermitted mine production: What is production? What is a by-product?

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

The Mining Legislation does not clearly define “production”. Based on interpretation of the mining legislation and the established practice of the Mining Department, production means extraction of the mineral from soil where the operation license holder gains commercial benefit from the extracted mineral.

UNPERMITTED PRODUCTION

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

The Amendment has extended the penalties applicable to unpermitted mine production and transportation. In addition to the imposition of an administrative fine, the license security of such license holder committing the unpermitted production shall be forfeited and the amount of license security shall be doubled. An operation permit is required for each separate mine but not for any by-prod-

The determination of whether the license holder gains a commercial benefit from the extracted mineral or whether the amount of secondary mineral is considerable is at the discretion of the Mining Department. In practice, it has been observed that the Mining Department applies a very wide scope to “unpermitted production” so as to include by-products as well. Thus, an amendment needs to be made to clarify the definition of unpermitted production for the purposes of avoiding the application of unjust sanctions.

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

CONTACTS Şebnem Önder1, Ayşe Eda Biçer2 Çakmak Avukatlık Bürosu Attorneys at Law Address: Piyade Sokak, Portakal Çiçeği Apt. No: 18, C Blok, Kat: 3, 06550, Çankaya - Ankara - Turkey 1) Partner, Çakmak Avukatlık Bürosu 2) Associate, Çakmak Avukatlık Bürosu Phone: +90 (312) 442 46 80 Fax: +90 (312) 442 46 90 Website: cakmak.av.tr

01 March 2013

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Business

Intelligence In Mining In the last decade, the contemporary international mining industry has undergone unprecedented globalization, consolidation, strides in adopting more sustainable social and environmental practices, as well as the investment in new technologies. In my career thus far I have had the rare opportunity to be part of two major automation initiatives, one underground, the other surface, as well as directly develop and implement business intelligence technology throughout mines in North America. From these experiences, it is clear that the most challenging forms of technological innovation are those that affect not only machines, but business process, where people, information, and decisions are affected. It is far simpler to implement a technology such as new fuel additives or a new engine in a haul truck than implementing and gaining high utilization from a new enterprise system or similar information-based technology since implementation and exploitation affect people and what they do in the workplace. The past decade has seen technology vendors either developing, or consolidating to offer a full suite of informationbased business intelligence solutions for every mining process, from production drill monitoring to fleet management systems through to integrated mine planning / performance management solutions. Corporate leaders and senior mine personnel hire my consulting company, or other technology experts, to provide advice on what specific product to buy. The truth is, within the same category, a specific vendor’s technology is most often of marginal difference when compared to the enormous impact implementation and business process change-plays in the outcome. Such changes can almost never be delivered

01 March 2013

by the vendors themselves. Any vendor claims that complex business intelligence technology is easy to implement and used to its fullest extent are false. Mining has seen the successful introduction of technology directly related to economies of scale, namely larger equipment, but as the economies of scale are reaching their limit, the next cycle of mining innovation will be business intelligence. I will use ‘business intelligence technology’ as meaning any technology that uses information for making improved decisions. Fleet management systems are a key example, as being one of the first and most successful uses of in-pit data to improve truck dispatching and in-pit performance management. Other in-pit equipment monitoring technology from a variety of vendors frequently have several benefits, first, as an aid to the equipment operator. For example, GPS-based dozer monitoring typically provides the dozer operator a virtual section-and plane view of his machine, and the position of the blade with respect to the ground, so that he can cut or fill to very exact specifications. The benefits of such operator-aids are relatively easy to achieve. However, such technology also typically has the ability to generate performance information, such as the productivity of the operator, delays, or equipment health information. Making full use of such data requires much more effort. Furthermore, integrating the databases from these technologies is difficult since mines typically use technologies from a variety of vendors who rarely truly cooperate, IT support staff do not have the skill-set to develop nor maintain a data warehouse. A data warehouse is a subject-oriented, integrated, time-varying, non-volatile collection of data, used primarily in organizational

decision making, in laymen’s terms, a database of databases, linked in a manner that allows the user, also known and business intelligence analyst, to view data from a multitude of systems in a single format. For example, a data warehouse could contain data from several databases, all related to a particular machine. For example information relating to operating cost, maintenance records, and productivity information about the same dozer could be found in separate databases. Traditionally, if mine planners want to determine dozing costs, they would have to consolidate data from all those sources, likely into a spreadsheet. Some of the advantages of a data warehouse over traditional (relational) database technology are its ability to process substantial data in less time, collect data from multiple sources, facilitate understanding from users, and track processes temporally (track changes over time). Data mining is the process of using statistical algorithms or queries tools such as Online Analytical Processing (OLAP) cubes. A business intelligence analyst is the person who not only mines the data, but analyses the results in a manner that would help devise action that would have impact. A common expression in the business intelligence field is “drowning in data, starving for information”, meaning there is a huge quantity of data available, but few mechanisms to make effective use of it. The changes necessary to make effective use of such data include education regarding IT and systems engineering, business process redesign, and information management. All fields not part of a mining engineer or manager’s education. It is for this reason, I have contacted professional mining engineering societies and key publications throughout

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

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

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

CONTACTS Sean Dessureault1, M. Mustafa Kahraman2 1) Assoc. Prof., The University of Arizona, Department of Mining and Geological Engineering E-mail: sdessure@email.arizona.edu 2) The University of Arizona, Department of Mining and Geological Engineering E-mail: kahraman@email.arizona.edu

III International conference “Mediterranean Coal Markets Conference” will take place 16-17th of September in Istanbul, Turkey to get together coal suppliers and consumers from Turkey, MENA countries, Europe, Russia and Ukraine. Mediterranean Coal Markets 2013 will focus on:

• Coal in the Mediterranean countries – trade dynamics in the region • Key suppliers to the MED countries: Colombia, SAR, USA and Russia • Alternative regions for coal supplies to the MED consumers (Indonesia and Canada) • Coal-fired power generation in the MED: Morocco, Italy, Iberia and Israel • Coal and pet coke consumption by cement Industry • Role of Turkey in coal markets in the Mediterranean basin • Supply and consumption volumes of lignite and sized coal in the Mediterranean countries

NEW in 2013:

Coal and pet coke consumption and trade Lignite & sized coal supply and consumption issues Coal freight-flows from ARA ports for further delivery to the MED region

Who should attend:

• International coal and lignite producers / traders / consumers • Petroleum coke suppliers and marketing managers • Coal-fired and lignite-fired power stations • Cement enterprises • Energy traders and marketers • Coal Exporters / importers • Terminal operators / stevedoring companies • Shipping companies: owners / charterers/ brokers / operators / agents • Mining equipment / systems suppliers • Financial institutions: investment banks / infrastructure funds Interactive events during the conference: 1. Round-table discussion: “Mediterranean Coal Markets 2013” will be organized between key industry players to exchange their opinions on current situation in the Mediterranean region and to make short-term forecasts. 2. Individual negotiations: Aiming to encourage international trade and establishment of new business relations we conduct individual negotiations with coal suppliers and consumers in their separate conference offices. Check for more details on our conference website page.. Regarding the participation, please contact: Darya Botchenko d.botchenko@b-forum.ru +380567943394(ext.205)

For Speaking Opportunities, please contact: Anna Sydorenko a.sidorenko@b-forum.ru +380567943394(ext.204)

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