Business Monitor International


Turkey Mining Report

Published 30 June 2014

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Turkey Mining Report

BMI View: Turkey's mining industry is set to be on the radar of foreign investors in the years to come as the government has undertaken efforts to open up the sector , paving the way for forthcoming investment. The gold sector will attract the largest share of investment as several companies bring their projects into production. Nevertheless, Turkey's extremely poor mining safety record and weak global commodity prices will limit the industry's otherwise healthy growth.

We believe investment into Turkey's mining sector will be forthcoming over the coming years as Prime Minister Tayyip Erdogan pledged to transform the country into one of the 10 biggest economies by 2023. With more than 50 different minerals found in economically adequate quantities, Turkey ranked 10 th in the world for the mineral variety of its underground resources.

While approximately 85% of the mining operations were controlled by the state 15 years ago, we believe this is set to change in the years ahead as the government undertakes considerable efforts to liberalise its economy and encourage capital inflows into the mining space. For instance, the reformed mining code of 2010 involves the introduction of a three-step exploration period (ranging from pre-exploration, general exploration to detailed exploration), a tightening of work safety requirements as well as reducing the regulatory powers previously held by the Ministry of Energy and Natural Resource. We expect the gold mining sector to receive the largest share of investment as several companies bring their plays into production. These include Eldorado Gold, Centerra Gold, Alacer Gold and Stratex International.

Poor Safety Record & Weak Commodity Prices Present Major Risks

The tragedy that took place at a mine in Soma in May 2014, in which 301 people lost their lives, is symptomatic of Turkey's extremely poor mining safety record. Turkey ranks lower even than the majority of African countries in terms of injuries and...

Table of Contents

BMI Industry View
7
Poor Safety Record & Weak Commodity Prices Present Major Risks
7
SWOT
9
Industry Forecast
10
Gold: Boom Tempered By Weak Global Prices
10
Table: Turkey - Largest Gold Projects
10
Weak Gold Prices Present Major Downside Risk
12
Table: Gold Production Forecast (Turkey 2010-2018)
12
Coal: Lignite Production To Lead Growth
12
Table: Coal Production Forecast (Turkey 2010-2018)
16
Industry Risk Reward Ratings
17
Risk/Reward Ratings
17
Table: MENA - Mining Risk/Rewards Ratings
19
Risk/Reward Ratings
21
Rewards
21
Industry Rewards
21
Country Rewards
21
Risks
22
Industry Risks
22
Country Risks
22
Table: Mining Industry Forecasts (Turkey 2010-2018)
23
Regulatory Development
24
Table: Turkey - Political Overview
25
Table: MENA - Mining Risk/Reward Ratings
27
Competitive Landscape
28
Table: Turkey - Largest Listed Mining Companies
29
Company Profile
30
Eldorado Gold
30
Table: Eldorado - Financial Data
32
Global Industry Overview
34
Challenges
34
Table: Mining - Select M&A Deals
38
Cause For Optimism
41
Commodities Forecast
48
Commodity Strategy
48
Iron Ore: Not Much Respite In Sight
48
Steel: Production Rationalisation Too Slow To Provide Price Upside
50
Aluminium: Further Price Rally Unlikely
51
Lead: Ripe For A H214 Boost
52
Copper: Consensus Moving Our Way
53
Nickel: Price Surge To Abate Further
54
Tin: In A Sweet Spot
55
Zinc: Bullish Short-Term Picture
56
Table: Select Commodities - Performance & BMI Forecasts
58
Methodology
59
Industry Forecast Methodology
59
Sources
60
Risk/Reward Rating Methodology
61
Table: Weighting Of Indicators
63

The Turkey Mining Report has been researched at source and features Business Monitor International (BMI)'s mining and commodity forecasts for metals, minerals and gems, covering all major indicators including reserves, production, exports and values. The report also analyses trends and prospects, national and multinational companies and changes in the regulatory environment.

BMI's Turkey Mining Report provides industry strategists, service companies, company analysts and consultants, government departments, trade associations and regulatory bodies with BMI's independent forecasts and competitive intelligence on the mining industry in Turkey.

Key Benefits

  • Use BMI's independent industry forecasts on Turkey to test other views - a key input for successful budgeting and planning in this mining market.
  • Target business opportunities and risks in Turkey's mining sector through our reviews of latest mining industry trends, regulatory changes and major deals, projects and investments in Turkey.
  • Assess the activities, strategy and market position of your competitors, partners and clients via our Company Profiles (inc. KPIs and latest activity), Key Projects Tables and Competitive Landscape Tables.

Coverage

BMI Industry View

Summary of BMI's key forecasts and industry analysis, covering mining reserves, supply, demand and prices, plus analysis of landmark company developments and key changes in the regulatory environment.

Business Environment Rankings

BMI's Mining Business Environment Rankings provide a country-comparative Risk-Reward Rankings index aimed at investors (mining companies and support service providers) in the regional mining market. The rankings methodology makes sophisticated use of over 40 industry, economic and demographic data points and is part of BMI's integrated Country Risk-Industry rankings products.

Key Projects

Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by metal/ore.

BMI Industry Forecasts

Historic data series (2009-2012) and forecasts to end-2018 for all key industry and economic indicators (see list below), supported by explicit assumptions, plus analysis of key downside risks to the main forecast. Indicators include:

  • Mining Industry: Industry size (US$mn), real growth (%), % of GDP, employment ('000), workforce as % of total workforce, average wage (US$).
  • Output:Production volumes ('000 tonnes, carats etc.) for all major metals, minerals, ores and gems mined in each state, including bauxite, copper, gold, coal, lead, silver, tin, titanium, uranium, zinc etc.
  • Exports: Value of exports (US$mn) for all major metals, minerals, ores and gems mined in each state .
  • Commodity Markets: Global demand, supply, stocks and benchmark prices (US$) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI Macroeconomic Forecasts

BMI forecasts to end-2018 for all headline macroeconomic indicators, including real GDP growth (%), inflation (%), fiscal balance (% of GDP), trade balance (US$bn), current account (US$bn) and external debt (US$bn).

Competitive Landscape Tables & Analysis

Comparative company analyses and tables detailing by US$ sales, % share of total sales, number of employees, year established, market cap/NAV, ownership structure, production and % market share.

Company Profiles

Examines the competitive positioning and short- to medium-term business strategies of key industry players. Strategy is examined within the context of BMI's industry forecasts, our macroeconomic views and our understanding of the wider competitive landscape. The latest financial and operating statistics and key company developments are also incorporated within the company profiles, enabling a full evaluation of recent company performance and future growth prospects.

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Testimonials

'An essential, multi-faceted research tool. BMI’s thorough understanding of the major market players enables an informed – and informative – review of the sector’s actual performance, together with useful insights into current industry issues, which are topped-off with detailed and invaluable forecasts of industry and macroeconomic trends.’

Senior Research Analyst, ABC International Bank plc