Turkey Mining Report

Published 22 June 2015

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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...

BMI Industry View
7
Poor Safety Record & Weak Commodity Prices Present Major Risks
7
SWOT
9
Industry Forecast
10
Coal: Lignite Production To Lead Growth
10
Table: Coal Production Forecast (Turkey 2011-2019)
13
Gold: Boom Tempered By Weak Global Prices
14
Table: Turkey - Largest Gold Projects
14
Weak Gold Prices Present Major Downside Risk
16
Table: Gold Production Forecast (Turkey 2011-2019)
16
Industry Risk Reward Ratings
17
Risk/Reward Ratings
17
Table: MENA - Mining Risk/Rewards Ratings
19
Turkey - Mining 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 2011-2019)
23
Regulatory Development
24
Table: MENA - Mining Risk/Reward Ratings
26
Competitive Landscape
27
Turkey - Consolidated Structure To Persist
27
Table: Turkey - Largest Listed Mining Companies
28
Company Profile
29
Romania - Eldorado Gold - 2015
29
Table: Eldorado - Financial Data
31
Global Industry Overview
32
Global Overview
32
1
33
2
35
3
36
4
38
5
40
Commodities Forecast
42
Commodity Strategy
42
Ferrous Metals
42
Iron Ore: Price To Remain Under Pressure In 2015-2016
42
Steel: Subdued Prices Until 2017
44
Non-Ferrous Metals
47
Copper: Subdued Outlook, Despite Recent Rally
47
Lead: Prices Weakness To Continue
49
Nickel: Subdued Prices Due To Weak Demand Growth
50
Tin: Supply Deficits To Underpin Rally In Tin Prices
51
Zinc: Positive Multi-Year Outlook, But Increasing Risks In Months Ahead
52
Table: Select Commodities - Performance & BMI Forecasts
54
Methodology
55
Industry Forecast Methodology
55
Sources
56
Risk/Reward Index Methodology
57
Table: Weighting Of Indicators
58

The Turkey Mining Report has been researched at source and features BMI Research'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.

Industry SWOT analysis

Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the mining sector and within the broader political, economic and business environment.

BMI Industry Forecasts

Historic data series (2009-2013) and forecasts to end-2019 for key industry and economic indicators, supported by explicit assumptions, plus analysis of key risks to the main forecasts. Indicators include:

  • Mining industry: Industry size (USDmn), real growth (%), % of GDP, employment (‘000), workforce as % of total workforce, average wage (USD).
  • 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 (USDmn) for all major metals, minerals, ores and gems mined in each state.
  • Commodity markets: Global demand, supply, stocks and benchmark prices (USD) for aluminium, copper, lead, nickel, tin, zinc, gold and steel.

BMI’s Mining Risk Reward Index

BMI’s Risk Reward Indices provide investors (mining companies and support service providers) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors, with each position explained.

Competitive Landscape Tables & Analysis

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

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.

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.

Sources

The Mining reports are based on an extensive network of primary sources, such as multilateral organisations (UN, WB, IMF), national chambers of commerce and industry, national statistical offices, government ministries and central banks, and multinational companies.

*Company profiles are not available for every country. Those reports instead contain information on the current activities of prominent companies operating in the market.

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