1 Legal and regulatory framework
1.1 Which legislative and regulatory provisions govern mining in your jurisdiction?
The main legislative and regulatory framework governing mining in Turkey consists of the Mining Law no 3213 dated 15 June 1985; and the Mining Regulation, dated 21 September 2017. The Mining Law sets forth the principles and procedures for the exploration, operation, ownership and abandonment of mines in accordance with national interests. ‘Minerals' are described under the Mining Law as: "Any substance other than petroleum, natural gas, geothermal and water resources of natural and economic value that are naturally found in the earth's crust and water resources." These minerals consist of five groups as further described under Article 2 of the Mining Law (see question 3.1). The Mining Regulation includes detailed provisions regarding the implementation of the Mining Law.
Some of the other secondary legislation on mining activities includes (without limitation):
- the Mining Activities Permits Regulation, dated 21 June 2005;
- the Mine Waste Regulation, dated 15 July 2015;
- the Regulation on Authorised Legal Entities, dated 3 June 2016; and
- the Regulation on the Tender of Mine Sites, dated 21 September 2017.
1.2 When was the mining legislation last reviewed?
The latest major amendments to the Mining Law were introduced in February 2019, with the aim of increasing foreign and private investment in the mining industry. The amendments cover a broad range of issues, including the simplification and expedition of licensing procedures, changes in state royalty payment ratios and new incentives.
The latest revisions to the Mining Law were enacted on 26 March 2020, as a part of the legislation that consists of the national response to the COVID-19 pandemic. According to this recent revision, the Ministry of Energy and Natural Resources (Ministry of Energy) may decide, in case of a force majeure event, that the financial obligations of mining companies are to be deferred or split into instalments; it also provides for a suspension of the statutory periods under the Mining Law. Within this context, the Ministry of Energy is authorised to announce force majeure for certain parts or regions of the country, and to identify which financial obligations cannot be carried out due to force majeure.
Following the above amendment to the Mining Law, an announcement was published on the website of the General Directorate of Mining and Petroleum Affairs (GDMPA) on the measures taken by the Ministry of Energy regarding the COVID-19 situation. The announcement affirms that a state of force majeure has been declared between 1 April 2020 and 30 June 2020 (inclusive) in accordance with Annex 19 of the Mining Law, amended by the Law no 7226, for mining licence holders and royalty holders that have been directly affected by precautions taken against the spread of COVID-19.
The measures announced by the Ministry of Energy include the following:
- Technical documents regarding operational activities in 2019, which had to be submitted by the end of April 2020 pursuant to Article 29, paragraph 4 of the Mining Law, have been postponed by three months starting from the date of the lifting of force majeure and must now be submitted by 30 September 2020.
- For every licence/licence application requiring the submission of a preliminary survey report, mineral exploration project, exploration activity report or operation project within the dates of the declared force majeure, the dates of submission and any other related requirements have been extended until 30 September 2020.
- In relation to operation licences that require, as per Article 24 of the Mining Law, the submission of an operation project, within the dates of the declared force majeure, requirements on submission of the operation project six months in advance and any other obligations under Article 24, paragraph 2 of the Mining Law shall not be applicable.
- In the event that the terms granted to licence holders for completion of any processes under the relevant articles of the Mining Law fall within the dates of the declared force majeure, such periods have been extended until 30 September 2020.
- The 2019 state royalty payments, which must ordinarily be made by licence holders by the end of June 2020 pursuant to Article 14 of the Mining Law, can now be paid until 28 December 2020.
- Licence fees that were doubled for a failure to pay within the month of January, which must ordinarily be paid by the end of June 2020, can now be paid until 28 December 2020 without cancelling the licence, on condition that double the amount is paid.
- In calculating the periods for which permits set out under Article 7 of the Mining Law were not issued in time, in the application of Article 24, paragraph 11 of the Mining Law, the entire calendar year of 2020 shall be disregarded for the period subject to the calculation of administrative fees and any long-stop dates shall not be applicable until 28 December 2020.
- In any evaluation made pursuant to Article 24, paragraph 12 of the Mining Law (which provides, under certain conditions, for the imposition of an administrative fine in case production levels are below those declared), the force majeure period shall not be taken into consideration.
1.3 What other legislative and regulatory provisions have relevance for mining operations in your jurisdiction?
The other legislative and regulatory provisions that are relevant for mining activities are mainly covered under the environmental and health and safety legislation. Some of the relevant laws and regulation for mining activities include:
- the Environmental Law no 2872, dated 9 August 1983;
- the Occupational Health and Safety Law no 6331, dated 20 June 2012;
- the Workplace Opening and Operation Licences Regulation, dated 10 August 2005;
- the Regulation on the Regeneration of the Lands Destroyed by Mining Activities, dated 23 January 2010;
- the Regulation on Workplace Health and Safety in Mining Workplaces, dated 19 September 2013; and
- the Regulation on Environmental Impact Assessment, dated 25 November 2014.
1.4 Are there any regional treaties or laws that need to be taken into account?
There are many bilateral agreements to which Turkey is a party relating to energy cooperation in general, and some bilateral agreements relating to cooperation between state authorities regarding the mining sector. However, there are no regional treaties relating to mining activities in particular.
1.5 Which bodies are responsible for enforcing the applicable mining laws and regulations? What powers do they have?
Two major governmental bodies are responsible for the enforcement of mining laws and regulations: the Ministry of Energy and the GDMPA. Before the February 2019 amendments to the Mining Law entered into force, some administrative functions regarding the conduct of mining activities laid with various governmental bodies. As the amendments to the Mining Law introduced in February 2019 aimed to expedite the permit and licensing process under the mining legislation, these two bodies have since became the almost-exclusive governmental bodies in relation to the conduct of mining activities. While the GDMPA is the primary authority that licence holders interact with in the conduct of mining activities, the Ministry of Energy has authority over certain critical issues, such as:
- the transfer of mining licences and discoverer's rights;
- the prioritisation of energy investments, in case the execution of several investments would conflict with each other (eg, a mining project conflicting with an oil project);
- the determination of a public interest for the expropriation of privately owned land upon request of an operation licence holder;
- the approval of share transfers which result in a change of 10% or more in the shareholding of a licence holding company;
- the conclusion of royalty agreements between licence holders and third parties (for royalty agreements as defined under the Mining Regulation); and
- the conduct of mining activities on agricultural and pasture lands.
1.6 What is the regulators' general approach in regulating the mining sector?
The National Energy and Mining Policy of Turkey (NEMP) has been developed around three main objectives:
- promoting indigenisation;
- ensuring the security of energy supply; and
- laying the groundwork for a sustainable and foreseeable energy market.
With respect to the mining sector in particular, the NEMP aims to:
- indigenise mining technology;
- restructure Eti Maden AS (the principal state-owned mining company) to improve integration in the energy market; and
- enhance cooperation between state-owned companies, governmental bodies and private sector players.
The NEMP also aims to increase the use of raw or intermediary materials to reduce the import of minerals by concentrating on research and development to improve technological innovations. In recent years, increased incentives have been introduced for coal mining, with the aim of increasing electricity generation through coal and lignite and reducing imports of natural gas, which for years have been a burden on the trade balance of Turkey. As a result, the share of coal and lignite in electricity generation has increased by almost 10% over the last decade and coal-fired power production currently meets about 40% of Turkey's electricity needs.
The February 2019 amendments to the Mining Law mainly aimed to increase the activity of foreign and private companies in the mining sector. This is also because minerals, especially gold, constitute an important share of Turkish exports. In 2019, export of minerals amounted to $4.3 billion.
2 Mining industry
2.1 How mature is the mining industry in your jurisdiction?
As the privatisation of the Turkish mining industry is relatively recent, the industry could be considered as still maturing. That said, the mining industry has developed considerably over the last 20 years and has been progressively assuming a more strategic position in the country's economy. For example, the value of minerals exports increased by almost 90% between 2000 and 2019. The Turkish mining industry also benefits from low operation costs compared to those in other resources-rich countries. Nevertheless, the mining legislation has been subject to many amendments over the last couple of years and the implementation of the legislation by the regulator has often changed, causing some discrepancies between the Mining Law and the various mining regulations. The lack of continuity regarding permit issues has had an adverse effect on the creation of an investment-friendly environment and consequently on private sector investments. However, the establishment of general investment schemes as well as investment schemes specific to the mining industry has helped to attract foreign investors.
The mining industry continues to make efforts to improve working conditions and workplace safety in general. The Soma accident which occurred at a coal mine near Manisa (in the southwest of Turkey) in 2014, resulting in the death of 301 workers, changed the government's view regarding workplace safety in mines. Immediately after the Soma accident, the government implemented more stringent regulations regarding workplace safety and private companies' attitude towards this issue has also become more positive.
2.2 What are the key minerals which are mined in your jurisdiction and where is mining activity typically based?
Due to Turkey's geological structure, different mineral formations can be found all around the country. In the Central and Eastern Anatolian regions, winters are harsher compared to other regions; hence, mining operations are usually suspended until spring. In other regions, mining operations continue all year round. Marble, chrome, copper, zinc and gold are considered to be the most valuable minerals in Turkey, and attract foreign investors in particular; but industrial minerals are those produced in the greatest quantities. Most of the minerals produced in Turkey are exported as concentrated minerals and run-of-mine.
Of the $4.3 billion of minerals exported from Turkey in 2019, precious stones accounted for $1.86 billion. Also, as it has one of the largest marble reserves in the world, Turkey exports the majority of its marble production. Chrome is also considered to be an important mineral in Turkey. Ore deposits of chrome are concentrated in six different regions and are mainly used in the industrial sector.
2.3 Are any minerals deemed strategic and, if so, what impact does this have?
Some minerals, such as coal and iron, may be considered strategic due to their socioeconomic importance. Coal production in particular is important, as it creates employment in many rural and less developed regions of the country. Iron ores also have strategic importance in Turkey, as iron is used in the defence industry, which is a key sector in Turkey.
In terms of export value, gold should be considered a strategic mineral. Turkey is one of the biggest gold consumers in the world. Although gold production reached its highest level in 2019, with 38 tons produced - an increase of 40% compared to the figure for 2018 - most of the gold consumed in Turkey is still imported. Nonetheless, the development of the gold mining industry in Turkey has been remarkable, considering that the first gold mine began production only in 2001, and Turkey is now the biggest gold producer in Europe. As global demand for gold remains high - not only for central bank reserves and jewellers, but also due its use in various technologies - it is expected that the Turkish government will continue to support gold production due to its high economic and export value.
2.4 Who are the key players in the mining industry in your jurisdiction?
Some key players in the private sector are subsidiaries of foreign mining companies who mainly concentrate on gold production. Other local companies are mostly subsidiaries of mid-size or large-size Turkish conglomerates. Eti Maden and the Mineral Research and Exploration General Directorate are the key players (see question 4.7) from the public sector.
2.5 In addition to exploration rights and mining rights, what other mining rights and titles exist (eg, artisanal or small-scale mining rights)?
In addition to exploration and operation rights, there are the discoverer's right and the royalty agreement.
Under the Mining Law, a licence holder shall be deemed to be the discoverer of the mines declared as proven reserve in the technical reports prepared during the term of the exploration and/or operation licences. A discoverer's certificate shall be issued to a licence holder that requests this right. If the mine is not operated by the individual or legal entity that discovered the minerals subject to production, the operator shall pay 1% of the annual ex-mine sales price as a finder's fee to the party that discovered the mine. The ex-mine sales price used to calculate the finder's fee cannot be lower than the ex-mine sales price determined each year by the General Directorate of Mining and Petroleum Affairs and which is taken into consideration for the payment of royalties. The discoverer's right is independent from the licence right and may be transferred to a third party together or separately from the licence.
The royalty agreement is defined under the Mining Regulation as an agreement entered into between a licence holder and a third party to establish a right of use in order to operate and develop the mines covered by the licence. Similarly to licence holders, royalty holders must be financially capable to carry out their operation and development activities.
Both the discoverer's right and the royalty agreement are registered with the Mine Registry.
3 Exploration rights
3.1 What licences are required to undertake prospecting and exploration activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?
The Mining Law distinguishes five groups of minerals:
- Group I minerals mainly include minerals that are used in construction, such as natural sand, gravel and cement clay.
- Group II minerals include granite, andesite, marble, travertine, granite, andesite and basalt.
- Group III minerals include melted salt found in seas, lakes and water springs, carbon dioxide and hydrogen sulphur.
- Group IV minerals cover a wide range of minerals, including coal, lignite, precious minerals such gold, copper, silver, platinum, lead, zinc, iron and chrome, as well as radioactive minerals such as uranium, thorium and radium.
- Group V minerals mainly include precious and semi-precious stones.
All minerals generally require an exploration licence, except for minerals listed under Group I and some minerals under Group II, for which the General Directorate of Mining and Petroleum Affairs (GDMPA) directly issues an operation licence. Exploration licences grant the licence holder, within a specified field and period, the right to conduct exploration activities such as geological prospecting, geological mapping, sampling, geophysical research, geochemistry, hydrogeological and geotechnical surveys and exploration drilling. The exploration licence holder is also entitled to conduct prospecting in licence fields around the area of its exploration licence, provided that it does not damage the neighbouring field or obstruct business activities in the same.
3.2 What requirements must be satisfied to obtain a licence?
Before specific application procedures are followed to obtain a licence, the mining legislation require that certain permits be obtained from the competent governmental body. These include:
- special permits from relevant governmental entities if the mine field subject to the licence is located in an area for which such permits are required, such as specially protected environment areas, first-degree military forbidden zones, organised industrial zones, state-owned forests and special investment areas;
- environmental permits (certificates for noise control, emission, wastewater discharge, and/or deep-sea discharge);
- reconstruction permits if the relevant licence field is within a construction plan; and
- permits from the Ministry of Energy and Natural Resources or private property owners whose lands or buildings are within a specific radius of the relevant licence field.
Following the issue of a licence, the licence holder and its technical personnel must, under Article 10 of the Mining Law, report the required or necessary information and notices to the GDMPA, including all reports, documents and other declarations in relation to mining operations and the licence, such as:
- technical reports;
- information on the production and sale of the mine;
- payment of royalties; and
- any changes in the shareholder structure of the mining company.
Failure to conduct mining operations in compliance with the licence documents constitutes a breach of the licence and the legislation. If the information provided by a licence holder is found to be inaccurate, the GDMPA can impose an administrative fine or, in some instances, cancel the licence.
3.3 What is the procedure for obtaining a licence? How long does this typically take?
All licences, except those regarding some minerals under Group II and all minerals under Group IV, are granted on a tender basis. The licences for other minerals are in principle granted on a ‘first come, first served' basis. The procedure for obtaining an exploration licence varies depending on the type of mineral for which the application is made. For example, exploration licence applications for Group IV minerals (which include most of the minerals produced in Turkey except precious and semi-precious stones) shall be made to the GDMPA with the relevant application documents and undertakings described under the Mining Law, along with the minimum fee for an operation licence in an amount published by the GDMPA each year. The minimum fee for an operation licence must be paid for each application, regardless of whether an exploration or operation licence is sought. The application fee is not refunded if the licence application is rejected.
For Group IV minerals, the applicant must submit a preliminary survey report and a mine exploration report, together with financial capability documents and such other documents as are required under the Mining Regulation, including corporate and tax documents, within two months of the application. The specific financial capability required for each group of minerals is announced each year by the GDMPA. A legal entity may establish its financial capability through its share capital for up to 30% of the required financial capability and a bank reference letter for up to 70% of the required financial capability.
3.4 Who can own exploration rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?
As per Article 168 of the Constitution of Turkey and Article 4 of the Mining Law, minerals and mines are under the control and at the disposal of the state. As mines are not legally bound to the ownership of the land, minerals in the ground are not owned by the landlord and cannot be subject to private ownership. Therefore, the GDMPA grants mining rights through licensing and such minerals may be privately owned by a licence holder only once they are extracted from the ground.
Mining rights can be granted to Turkish citizens that benefit from civil rights and to legal entities established in accordance with Turkish law. Therefore, for foreign investors that wish to obtain mining rights in Turkey, the main requirement is to incorporate a legal entity in Turkey, although such entity can be 100% owned by a foreign entity. There are no further restrictions on the shareholding or management of mining companies. The Mining Regulation provides, however, that any transfer of shares in a licence holding company involving more than 10% of the total shares of the company is subject to the approval of the Ministry of Energy.
3.5 What fees and other charges are incurred in obtaining a licence?
For licence applications concerning the exploration of Group II(b) and Group IV minerals, the applicant must pay the base value of an operation licence fee. For licence applications concerning minerals relating to other groups, the applicant must pay the exploration licence fee. According to the Mining Law, the base value of the exploration licence fee is increased in accordance with the reappraisal ratios determined by the Turkish Tax Procedural Law. Licence fees are calculated by multiplying the base values by the parameters determined for each group of minerals, depending on the field size. These parameters are described in Chart 1 for exploration licences and Chart 2 for operation licences, which are annexed to the Mining Law. All licence fee payments shall be made to the GDMPA's account.
3.6 What is the duration of a licence? What is the process for renewal?
Exploration licenses for Group IV minerals provide for a primary exploration period of one year, a general exploration period of two years and a detailed exploration period of four years. For certain minerals under Group IV (including the ones listed under question 3.1 above), an extra two years defined as a feasibility period may be granted by the GDMPA to the license holder following the detailed exploration period. Exploration licenses are not subject to time extension or renewal.
3.7 What are the operator's rights and obligations under the licence?
After the issuance of the exploration license, license holders shall comply with the requirements for each exploration period. Firstly, until the end of the primary exploration period of one year, the license holder shall submit a primary exploration report to the GDMPA showing that the minimum works and the investment expenditures in relation to such exploration operations of the primary exploration period are completed. Failure to submit such report can result in an administrative fine, however it does not prevent the commencement of the general exploration period. During the general exploration period, the license holder shall submit to the GDMPA information regarding the mine resource as well as a general exploration report showing investment expenditures incurred during such exploration operations. However, if the primary exploration operation report, the general exploration operation report and investment expenditures documents are not submitted by the expiry of the general exploration period, or are not deemed acceptable by the GDMPA and not revised by the license holder as requested, the GDMPA can sanction the license holder with an administrative fine or cancel the license. If such obligations are duly met, the detailed exploration period shall commence. Before the expiry of the detailed exploration period of four years, the license holder shall submit to the GDMPA information regarding the mine resource as well as a detailed exploration report showing investment expenditures incurred during the exploration operations. If the detailed exploration operation report is not submitted on time, or is not deemed acceptable by the GDMPA and not revised by the license holder as requested, the license shall be cancelled by the GDMPA at the end of the exploration period.
As stated above, for most of the minerals included under the Group IV, an extra two years defined as a feasibility period may be granted by the GDMPA to the license holder in addition to the detailed exploration period. In order for the feasibility period application to be deemed acceptable by the GDMPA, the mandatory work obligations of the detailed exploration period must have been completed by the license holder and the resource that is being explored must have been discovered. A feasibility report shall be provided by the license holder to the GDMPA before the expiry of the feasibility period. If:
- the feasibility report is not deemed adequate by the GDMPA and the deficiencies notified to the license holder are not remedied within a period of one month, or
- the license holder does not apply for an operation license before the expiry of the detailed exploration period, or
- the license holder fails to complete the work obligations committed during the feasibility period,
the exploration license shall be cancelled by the GDMPA.
3.8 Are there any requirements re relinquishment of an exploration licence or part of the area covered by an exploration licence?
The grounds for forfeiture of exploration licences are as follows:
- expiration of the exploration licence period;
- failure to apply for an operation licence before the expiration date of the exploration licence period; and
- termination of an exploration licence. Exploration licences may be terminated unilaterally by the GDMPA based on the following grounds set forth under the Mining Law:
- failure to pay the annual licence fee within the time specified under the Mining Law;
- failure to submit the exploration reports and the relevant documents on time;
- inadmissibility of reports and documents submitted to the GDMPA;
- provision of missing or inaccurate information to the GDMPA which resulted in the undue grant of mining rights;
- a decision of the Ministry of Energy in favour of other investments in case of overlapping areas of such investment and the relevant licence; and
- failure to comply with any provision of the Mining Law and related secondary legislation.
Failure to comply with the exploration documents and the provision of missing or inaccurate information may further be considered a breach of the legislation.
A licence holder may apply to the GDMPA for the abandonment of the licence field, provided that it takes necessary precautions and submits all necessary documents before the expiration date of the licence.
3.9 Can licences be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?
An exploration licence can be transferred with the approval of the Ministry of Energy and subject to the following conditions:
- The transferee must be either a Turkish citizen or a legal entity incorporated in Turkey;
- All payments required for the licence up to the date of transfer must have been made;
- A document must be submitted showing the consent of both parties as per the Mining Regulation, including a statement of the transferee accepting all rights and obligations arising from the licence and a statement of the transferor regarding the transfer; and
- The transferee must fulfil the financial capacity criteria set out in the Mining Law.
The transfer becomes effective upon registration with the Mine Registry. As mining licences cannot be divided into shares, the licence can be transferred in its entirety only. The transfer of licences may also occur through sale by enforcement or by inheritance. No taxes apply to direct transfers.
Regarding indirect transfers, the Mining Regulation provides that any transfer of shares in a licence holding company involving more than 10% of the total shares of the company is subject to the approval of the Ministry of Energy. Under Turkish law, share transfers may be subject to certain taxes, such stamp tax or value added tax, depending on the specifics of the transaction and the parties to the same.
3.10 Does an exploration licence give any priority when applying for a mining right?
Under the Mining Law, the exploration licence holder is given priority to apply for an operation licence in order develop and operate a mine. The exploration licence holder can, by the end of the term of the exploration licence, apply for an operation licence. The conditions for an operation licence application are set out in question 4.2.
4 Mining rights
4.1 How is ownership of mining rights determined in your jurisdiction?
A mining operation licence, together with the operation permit, grants the licence holder the right to conduct operation activities including production from the mine within the field and for the period specified under the relevant operation licence and operation permit. Operation activities must be compatible with the operation project and therefore are limited to the activities specified under the operation project. The operation licence holder is entitled to the ownership of minerals produced from the mine. Apart from the operation activities, the operation licence holder is entitled to conduct exploration activities within the operation licence field. Additionally, the licence holder shall be deemed to be the discoverer of the mines declared as proven reserve in the technical reports prepared during the term of the exploration and/or operation licences. A discoverer's certificate shall be issued to a licence holder that requests this right. As mentioned in question 2.5, in the event that the mines which are subject to the discovery are not operated by the discoverer, the discoverer's right accrued over the produced minerals shall be paid to the discoverer at a rate of 1% of the annual ex-mine sales price.
4.2 What are the key requirements in order to apply for a mining right?
An operation licence application must meet the following conditions:
- absence of overdue debts under Article 22/A of the Law on the Collection of Public Receivables;
- payment of the operation licence base fee and the operation licence fee; and
- provision of documents relating to the operation project prepared by an authorised legal entity under the responsibility of a mining engineer, including documents relating to the financial capacity of the applicant for the implementation of the operation project.
If the operation licence application is rejected, the relevant mine site shall be licensed through a tender. Technical deficiencies in the project are notified by the General Directorate of Mining and Petroleum Affairs (GDMPA) to the applicant within two months, which may be remedied within three months of the GDMPA's notification, failing which an administrative fine will be imposed. The applicant shall then have an additional period of three months to remedy any deficiencies. Again, if the deficiencies are not remedied in time, the related mine site shall be licensed through a tender.
If the operation licence application is not accepted, the application fees are not returned. If the application conditions are met, the operation licence shall be issued by the GDMPA within one month.
4.3 What fees and other charges are incurred in obtaining a mining right?
The operation licence fee is calculated by multiplying the base value by the parameters determined for each group of minerals, depending on the size of the mine field. These parameters are shown in Chart 2 as an annex to the Mining Law.
4.4 What is the duration of a mining right? What is the process for renewal?
Operation licences for Group I (a) and V minerals are granted for five years and operation licences for other groups of minerals shall be granted for at least 10 years. Operation licences can be renewed by submitting an application at least six months before the initial operation licence period expires.
In evaluating an extension request, the GDMPA reviews the project and the condition of proved and probable reserves, considering:
- completion of the necessary investments for the satisfactory and rational operation of the mine reserve as well as the construction of the facilities;
- an appropriate operation project;
- conduct of the operations during previous licence periods;
- the environmental impact of the operations already conducted;
- compliance with the environmental conformity plan;
- production reserves; and
- installations and facilities on the site.
- whether the licence holder uses the minerals produced at its own facility or does not have such a facility to use its production;
- whether the proven reserve and production status are satisfactory for the requested extension; and
- whether the average production in the last five years was:
- above 50% of the production declaration of the project;
- between 25% and 50% of the production declaration; or
- less than 25% of the production declaration.
The duration of an operation licence shall not exceed:
- 30 years for Group I(a) minerals;
- 40 years for Group II minerals; and
- 50 years for other groups of minerals with extensions.
The Ministry of Energy and Natural Resources may decide on an additional extension from 30 to 60 years for Group I minerals and from 40 to 80 years for Group II minerals. For other groups of minerals, the President of the Republic of Turkey may decide on an extension from 50 to 99 years.
4.5 Who can own mining rights in your jurisdiction? Do specific requirements or restrictions apply to foreign operators?
Please see question 3.4.
4.6 Do any indigenous ownership requirements apply in your jurisdiction?
4.7 What role does the state play in the mining industry in your jurisdiction?
Before the privatisation of the mining sector, all mining activities were conducted by state-owned companies such as Eti Maden, which was established in the 1930s (the early years of the Republic of Turkey), to develop mining activities in the country. Eti Maden, with its various affiliates, is still active in mining exploration both in Turkey and abroad.
Another important government entity is the Mineral Research and Exploration General Directorate (MTA). The MTA is a research organisation established for the purpose of providing mining data to private and public companies involved in mining activities. The MTA can also be contracted by private and public entities to carry exploration activities for a fee. The services provided by the MTA include mineral exploration projects, geology, geophysical maps and scientific research, map inventory, hydrogeology studies, geothermal studies, geochemistry, earth surface research, marine research, environmental research, active fault seismic-tectonic studies and geological survey of metropolitan areas.
4.8 Are there requirements for the government to enter into a mining development (or similar) agreement in addition to the licences/permits? When is this required or available?
The mining development agreement model is not applicable, as there is no concession model for mining activities in Turkey.
4.9 Can mining rights be transferred? If so, how and subject to what consents? Do any restrictions or taxes apply to direct or indirect transfers?
Please see question 3.9.
4.10 Can security be taken over mining rights?
Operation licences can be mortgaged in favour of a third party to secure the licence holder's debts in relation to the mine through registration of such mortgage with the Mine Registry subject to the GDMPA's approval. The term of the mortgage is limited to the term of the relevant operation licence and not the term of the debts it secures. If the duration of an operation licence is extended, the licence holder must then enter into a new mortgage agreement before the GDMPA with its creditors for the duration of the new term. Mining licence mortgage agreements shall be signed by the parties and submitted to the GDMPA. Upon submission of the mining licence mortgage, the parties shall also sign a mine mortgage deed before the GDMPA, which is a form including information on the mortgage and the secured amount. The mortgage will be effective upon registration with the Mine Registry. Mining licence mortgages are otherwise subject to the provisions on mortgages of the Turkish Civil Code. Licences may also be subject to seizure or interim relief in case of an execution or bankruptcy proceeding. In case of seizure of a licence or interim relief in relation thereto, such encumbrances must be registered with the Mine Registry. Since any mortgage, pledge, seizure or interim relief is registered with the Mine Registry, the register should be reviewed in order to obtain information on encumbrances of the relevant licence.
4.11 What provisions apply with regard to closure or abandonment of a mining right?
There are four grounds of forfeiture of operation licences:
- expiry of the operation period;
- termination of the operation licence by the GDMPA;
- abandonment; and
- depletion of the reserve.
The GDMPA may terminate the licence unilaterally based on grounds such as the following:
- failure to pay the annual licence fee within the specified term;
- failure to submit or to comply with the operation reports and the relevant documents on time;
- the inadmissibility of reports or documents;
- the provision of missing or inaccurate information to the GDMPA which resulted in the undue grant of mining rights;
- a decision of the Ministry of Energy in favour of other investments in case of overlapping areas of such investment and the relevant licence;
- the conduct of operational activities without the necessary permits three times or more within a three-year period; or
- the recurrence of actions which are subject to administrative fines as specified under the Mining Law.
Further, a licence holder may apply to the GDMPA for the abandonment of the licence field, provided that it submits related documents before the expiration date of the licence.
In addition, the infringement by the licence holder of other permits or rules (eg, those set out in environmental legislation) may result in the notification of such infringement by the relevant state authority to the GDMPA, which may order the suspension of mining activities until the licence holder takes the necessary precautions. If the licence holder causes the recurring suspension of its mining activities or fails to take the necessary precautions to remedy the infringement, the licence shall be cancelled.
5 Surface rights
5.1 Does the law of your jurisdiction distinguish between mining rights and surface rights? If so, how does an owner of mining rights acquire surface rights?
The licence holder does not necessarily need to own the land on which it conducts mining activities. However, it shall be entitled to use the land and conduct mining activities thereon. If the land constitutes private property, it may be used through usufruct, other easement rights or expropriation. Land owned by government entities may be rented by those entities to the licence holder. Treasury lands and state-owned lands do not require any lease agreements.
The licence holder may have obtained easement rights on a private property in relation to its mining operations. These could be:
- an easement right for immovable property;
- easement of habitation;
- easement of construction;
- natural resource right; or
- other easements such as compulsory passage easement.
Almost all surface rights as such are acquired through registration with the Land Registry. However, easement rights for immovable property may be acquired prior to registration – for instance, in case of occupancy of vacant lands or if there is a court order.
5.2 Where surface rights are acquired, what are the operator's rights and obligations as regards the landowner? And what are the landowner's rights and obligations as regards the operator?
The most common easement rights involved in mining activities are the usufruct and the easement of construction. A usufruct gives the rights holder a right to use property, rights or assets that belong to another person. A utility easement is a form of usufruct right according to which pipes, cables and conduits for water, gas, electricity and the like located outside the parcel of land which they serve are, except where otherwise regulated, the property of the utility plant from which they come or to which they lead. A utility easement may be created over a land only by establishing an easement right. An easement of construction gives a person the right to own a building that is built on another person's property.
A licence holder may request the establishment of an easement for construction or another easement right by submitting an expropriation request to the General Directorate of Mining and Petroleum Affairs (GDMPA) within the exploration period in the event that the licence area is privately owned. Following the exploration period and during the operation period, expropriation requests shall be filed with the Ministry of Energy and Natural Resources. The licence holder may also request the establishment of an easement for construction or another easement right for water, natural gas, electricity and communication lines to be brought from outside the licence area and used in the licence area and/or its facilities.
The licence holder shall compensate the landlord in case of any damage to the land and shall leave the land in a proper condition upon expiry of the licence.
5.3 Please give an overview of the process for any mandatory acquisition of surface rights (eg, process and time to enforce).
Mandatory acquisition may occur through expropriation. If a licence holder cannot obtain the necessary rights over a privately owned property through agreement with the owner, then upon the licence holder's request and if there is a public interest, the GDMPA (for exploration licence holders) or the Ministry of Energy (for operation licence holders) can expropriate the land. The Mining Law and the Mining Regulation set forth the main principles of expropriation and refer to the Law of Expropriation no 2942 with regard to the procedure for expropriation, under which two procedures are determined: the standard expropriation procedure and the expedited expropriation procedure.
Under a standard expropriation procedure, the timing of the expropriation depends on whether the landowner and the licence holder reach agreement on the value of the land and whether the landowner challenges the expropriation decision before the administrative courts. Expedited expropriation is also possible:
- upon a decision of the President of the Republic of Turkey;
- for national defence purposes; or
- in extraordinary circumstances regulated by special laws.
The whole process, including the price determination and payment of the same, is conducted after seizure of the property. This mechanism enables the land to be used before the expropriation is completed. The landowner may appeal the court decision on price determination or challenge the decision of the President of the Republic of Turkey before the Council of State.
The expropriated land becomes the property of the Treasury and is assigned to the licence holder for the term of its licence.
5.4 Are any native title issues applicable, either at the exploration licence stage or when a mining right is issued?
5.5 Are any other rights needed to use the land (eg, zoning permissions or planning requirements)?
For mine fields that fall within zoning areas, the licence holder must seek a permit from the relevant local administration. If the licensed mine field is not initially within a zoning area but the land is subsequently included in a zoning area, the licence holder need not obtain a permit and a zoning plan need not be prepared for mining activities, related temporary facilities and any other premises located in the mine field.
Where mining activities are conducted in areas that are not zoning areas, construction and occupancy permits are not required for temporary facilities and other premises located in the mine fields. Although no permit is required, any structure built must accord with rules of science and safety, and must be reported to the special provincial administration or to the Directorate of Investment Monitoring and Coordination. After completion of the mining activities, temporary facilities and other premises located on the field must be removed within one year.
6 Environmental issues
6.1 What environmental authorisations are required to undertake prospecting, exploration and mining activities in your jurisdiction? Do these vary depending on the type of mineral or the location of the activity?
Under the Environmental Law no 2872 companies and institutions are obliged to prepare an environmental impact assessment (EIA) report or project information file if a project could result in pollution. Permits, consents, incentives and licences shall not be issued and operations thereunder shall not commence unless a positive decision on an EIA or an ‘EIA not required' decision is issued by the competent authorities. The administrative and technical procedures and principles regarding EIAs shall be conducted as per the EIA Regulation of 25 November 2014. Article 7 of the EIA Regulation lists the projects which require an EIA report. The competent authority to issue an EIA report is the Ministry of Environment and Urbanisation (MEU), which may also authorise the provincial governorates to issue such reports and decisions.
Mining activities are listed under Annex 1 of the EIA Regulation and therefore require an application to the MEU in order for the latter to assess whether the operations require an EIA positive report.
6.2 What environmental obligations must the operator observe while the mine is operational?
Under the Environmental Law, individuals and legal entities are responsible for the protection of the environment and the prevention of pollution. Hence, any and all expenses (including the costs of prevention, limitation, removal or remedy) shall be met by the individuals or entities that caused the environmental degradation and/or pollution. If the polluters do not take necessary precautions, the costs incurred by government entities for the prevention, limitation, removal or remediation of the pollution shall be collected from such polluters as per the Law on Collection Procedure of Public Assets no 6183. Under the Environmental Law, polluters are responsible for stopping or reducing the impact of pollution or environmental degradation that they are causing, directly or indirectly. The Environmental Law also sets out administrative fines for each breach stated thereunder, some of which are tripled for legal entities.
Polluters that cause pollution or environmental degradation are liable, without prejudice to their liability under the general provisions of Turkish law, for damages arising from the pollution or degradation based on the principle of liability without fault.
6.3 What environmental obligations must the operator observe in relation to closure of the mine?
Under the Regulation on the Regeneration of the Lands Destroyed by Mining Activities, dated 23 January 2010, before proceeding with the mining activities, a licence holder must prepare a plan for the restoration of the mining site, the re-establishment of the natural balance and the renewal of the area in such a way that people and other living creatures can safely return. Such potential impacts shall also be evaluated and concluded as a part of the EIA process regarding the mining activity in question. Pursuant to the Mine Waste Regulation dated 15 July 2015, where there is a storage facility for mine waste, the licence holder must obtain a closure report including a geotechnical analysis prepared by an engineering firm, which must also be approved by the MEU. The Mine Waste Regulation also details the methods for the disposal of the waste. If it fails to comply with the Mine Waste Regulation, the licence holder may be subject to fines and sanctions under the Environmental Law.
6.4 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?
With respect to civil liability, in relation to environmental law related damages, the general provisions regarding tort, liability of the property owner, employer liability or danger liability may establish a basis for liability with fault or liability without fault.
Some criminal penalties are set out in the Environmental Law for those who submit inadequate or incorrect information when required to provide information and documents or who prepare or use incorrect or deceptive documents. Other criminal penalties are set out in the Criminal Code no 5237 under which individuals who intentionally pollute the environment in violation of regulations on waste disposal may be sentenced to a criminal fine or imprisonment, depending on the severity of the damage to people, animals and the environment. Due to the principle of individual criminal responsibility under Article 20 of the Criminal Code, legal entities are not subject to such penalties, but may be subject to security measures; whereas individuals who are responsible for waste disposal may be subject to criminal penalties, depending on their job description and responsibilities. If waste disposal requires corporate investments to be made for a legal entity, the board of directors and managers may be subject to criminal penalties for failing to make such investments and/or take the relevant decisions.
6.5 Which bodies are responsible for enforcement of environmental obligations?
The MEU is responsible for enforcing the environmental legislation, issuing the relevant permits and reviewing EIA reports. Moreover, the MEU is entitled to delegate its authority to provincial governorates, subject to administrative law principles.
6.6 What is the regulators' general approach in regulating the mining sector from an environmental perspective?
Compliance with environmental requirements is a prerequisite for conducting mining activities. Therefore, the regulator's approach and policy making are generally limited to the framework set out by the environmental legislation. In some exceptional cases, public opinion and social unrest factors may affect the decision-making processes involved in granting environment permissions. The legislature's current approach is to increase the sanctions for environmental breaches by mining companies; an amendment to the Mining Law introduced in February 2019 provides that a licence holder which commences activities without having obtained an EIA may be subject to both an administrative fine and an order to suspend its activities.
7 Health and safety
7.1 What key health and safety requirements apply to operators in your jurisdiction?
The main occupational health and safety legislation and regulations in Turkey applicable to mining operators are:
- the Occupational Health and Safety Law no 6331 (OHS Law);
- the Occupational Health and Safety Regulation dated 9 December 2003 (OHS Regulation); and
- the Occupational Health and Safety in Mining Workplaces Regulation (OHSMW Regulation), dated 19 September 2013.
The OHS Law and the OHS Regulation generally set out:
- the main health and safety principles in workplaces;
- provisions to improve health and safety in workplaces; and
- the duties, authorisation, rights and obligations of both employees and employers.
As a general rule, the OHS Law applies to all employees in a workplace, regardless of their job definition.
The OHSMW Regulation sets out the minimum requirements in order to preserve the health and safety of employees who work in mines. The OHSMW Regulation states some specific definitions relating to mining activities and sets out the obligations of both employers and employees. The Ministry of Family, Labour and Social Security is responsible for enforcing the OHS Law, the OHS Regulation and the OHSMW Regulation.
7.2 What reporting requirements apply with regard to mining accidents in your jurisdiction?
Under the OHS Law, an employer must:
- keep a list of all occupational accidents and diseases suffered by its workers;
- draw up reports once the required studies have been carried out; and
- investigate and draw up reports on accidents that might potentially harm workers, the workplace or work equipment, or that have damaged the workplace or equipment, despite not resulting in injury or death.
The employer must also notify the Social Security Institution:
- within three working days of the date of an accident; and
- within three working days of receiving notification of an occupational disease from healthcare providers or occupational physicians.
Additionally, occupational physicians or healthcare providers must refer workers who have been pre-diagnosed with an occupational disease to healthcare providers authorised by the Social Security Institution. Occupational accidents referred to healthcare providers must be notified to the Social Security Institution within 10 days and authorised healthcare providers must notify the Social Security Institution of occupational diseases within the same timeframe.
7.3 What are the potential consequences of breach of these requirements – both for the operator itself and for directors, managers and employees?
Under the OHS Law, if any situation, working method or equipment is found to be dangerous for workers, operations must be stopped in the premises or any part of thereof, taking into account the nature of the hazard and the part of the premises and the workers affected by the hazard, until such hazard is eliminated. In addition, in workplaces that are classified as very hazardous (eg, mines), operations must be stopped if no risk assessment has been conducted. Also, where fatal work accident occurs and a court finds that the employer was at fault, the company will be banned from public tenders for two years. A copy of the court decision will be sent to the Public Procurement Authority to be registered in the employer's registry and announced on the website of the authority.
In addition, the legal representatives of an employer that does not comply with a decision to stop its activities may be subject to imprisonment for between three and five years.
7.4 What best practices in relation to health and safety should operators consider adopting in your jurisdiction?
The approach to health and safety in mining operations is mainly based on the Mining Law and the OHS Law. Accordingly, when conducting mining activities, every operator is obliged to employ a permanent supervisor and an occupational safety specialist. The permanent supervisor's obligations are defined under the Mining Regulation and include:
- the planning, coordination and execution of mining activities in accordance with the operation project within the licence area;
- the recommendation of necessary measures in case there is a dangerous situation contrary to the operation and supervision of such measures; and
- the authority to conduct investigations and obtain all necessary information from the operator, and to ensure that necessary measures are carried out under the Mining Law.
Another example of best practices in mining activities is the Communique on Mandatory Personal Accident Insurance Tariff and Instructions for Mining Employees issued by the Prime Ministry Undersecretariat of Treasury (currently known as the Ministry of Treasury and Finance) on 6 May 2015. According to this communique, mining operators that are involved in coal mining or underground mining for other minerals are obliged to take out personal accident insurance policies relating to mining operations for their employees.
7.5 Which bodies are responsible for enforcement of health and safety obligations?
The Ministry of Family, Labour and Social Security is responsible for the implementation and monitoring of health and safety obligations.
7.6 What is the regulators' general approach in regulating the mining sector from a health and safety perspective?
Since the Soma accident in 2014, the authorities have avoided any regulations that may cause social tension. The current occupational health and safety legislation adopts a human-oriented approach and prioritises the safety and working conditions of employees from a risk-based perspective. Although occupational health and safety legislation in Turkey is generally in line with international standards, some areas still require improvement, such as:
- standards regarding the education and training of mining engineers;
- a well-defined list of rights and obligations of mining engineers acting as permanent supervisors;
- standards for the monitoring of occupational health and safety training of occupational health and safety specialists; and
- a more standardised approach to occupational health and safety issues in the mining sector.
8 Processing, refining and export
8.1 What requirements and restrictions apply with regard to the processing or refining (beneficiation) or minerals?
Under the Mining Law, mining activities include the beneficiation of minerals. Therefore, subject to the requirements of other applicable laws, licence holders can establish beneficiation facilities as part of their licences.
8.2 What requirements and restrictions apply to the export of minerals?
There are no specific restrictions on the export of minerals under the Mining Law. Restrictions regarding the export of minerals may be imposed under the general external trade legislation. Although not directly related to export restrictions, minerals included under Group II(c) may be used in the facilities of the operator only and must not be sold to others, unless they are not suitable for use in the operator's facilities and subject to specific authorisation.
9 Taxes and royalties
9.1 What taxes, royalties and similar charges are levied on mining operators in your jurisdiction? How are these calculated?
‘Royalties' are defined as the government's share of the proceeds obtained from mining operations. The amounts payable are as follows:
- Group I (a) minerals: 4% of the market value decided and declared by the governor's office or the special provincial administration.
- Group I (b), II(a) and (c) minerals: 4%.
- Group II (b) minerals: 4.5%.
- Group III: 1% for salt minerals and 5% for other minerals in Group III.
- Group IV minerals such as gold, silver, platinum, copper, lead, zinc, chrome, aluminium and uranium oxide: calculated as per Chart 3 annexed to the Mining Law.
- Group IV: 8% for radioactive minerals and 3% for other materials.
- Group V: 4% of the market value.
For Group IV minerals such as gold, silver, platinum, copper, lead, zinc, chrome, aluminium and uranium oxide, the state royalty amount can vary between 1% and 15%, based on the price of the relevant mineral on the London Metals Exchange (LME). For minerals that are not traded on the LME, the price taken into consideration for the calculation of the state royalty shall be determined by the Ministry of Energy.
9.2 Are any tax incentives available for mining operators?
There are specific incentives under the mining legislation, such as the following:
- 75% of the state royalty shall not be taken from licence holders that transform Group IV(c) minerals into metals in domestic integrated facilities.
- 50% of the state royalty shall not be taken from licence holders that produce minerals through underground operation methods.
- Licence holders producing Group IV(c) minerals and that create additional added value by processing the minerals produced at their facilities within the country are not required to pay 40% of the state royalty for the quantity of the minerals used for production at these facilities.
- Under the Value Added Tax Law no 3065, goods and services delivered in relation to the exploration, production, beneficiation and refining of gold, silver and platinum shall be exempt from VAT.
The President of the Republic of Turkey may also decide on a maximum 25% discount or increase in the state royalty, depending on the type of the mineral, the area of production and other similar criteria.
The operator may also benefit from general investment incentives. An investment incentive certificate may provide for the following incentives:
- interest rate support;
- VAT exemption;
- VAT rebate;
- customs (tax) exemption;
- tax deduction at a specific percentage;
- assignment of a site for the incentive; and
- support for employers' share of social security premiums for a specific period.
9.3 What other strategies might mining operators consider to mitigate their tax liabilities?
With regard to acquisitions of Turkish mining companies by foreign entities or investments in mining projects more generally, it is important to obtain legal advice within the framework of Turkish tax legislation and the double taxation treaties to which Turkey is a signatory, in order to structure the investment in the most tax-efficient way.
9.4 Have there been any significant changes to the taxation rates applicable to mining companies in the last three years?
The amendments to the Mining Law which entered into force on 14 February 2019 changed some of the state royalty ratios. With the introduction of the 2019 amendments:
- the state royalty for Group II(b) minerals was increased from 4% to 4.5% of the market value, determined by factors such as the quality of the natural stone and the area in which it is found;
- for Group IV minerals excluding gold, silver, platinum, copper, lead, zinc, chrome, aluminium, uranium oxide and other radioactive minerals and materials, the state royalty was increased from 2% to 3%; and
- for Group IV minerals such gold, silver, platinum, copper, lead, zinc, chrome, aluminium and uranium oxide, the state royalty amounts to be calculated as per Chart 3 annexed to the Mining Law have been increased.
The 2019 amendments also enhanced the incentive for licence holders that transform Group IV minerals into metals in domestic integrated facilities, increasing the state royalty discount from 50% to 75%.
10.1 In which forums are mining disputes typically heard in your jurisdiction?
Disputes arising from the cancellation or refusal of mining licenses, refusal of other requests made to the General Directorate of Mining and Petroleum Affairs (GDMPA) or the Ministry of Energy under the Mining Law, as well as disputes under the Environmental Law are resolved before Turkish administrative courts. Accordingly, those whose interests are violated may file a lawsuit claiming that an administrative act is unlawful in terms of authority, form, reason, subject and purpose. Disputes arising from administrative fines issued in accordance with the Mining Law and the Environmental Law are also resolved before Turkish administrative courts.
As mentioned under question 5.3 , under a standard expropriation procedure, a land owner may challenge the expropriation decision before administrative courts, and under an expedited expropriation procedure, a landowner may challenge the expropriation decision before the Council of State, which is the highest court for administrative matters in Turkey. In case the landowner and the license holder cannot reach an agreement regarding the price of the land which is required to be expropriated, the dispute regarding the price determination is resolved before the Civil Court of First Instance.
10.2 What issues do such disputes typically involve? How are they typically resolved?
Most disputes regarding mining activities relate to expropriation disputes, disputes under the environmental legislation or disputes regarding the granting or refusal of licenses under the Regulation on the Tender of Mine Sites dated 21 September 2017.
10.3 Have there been any recent cases of note?
The Council of State recently decided a case involving the cancellation of an operation licence (Eighth Chamber of the Council of State, Case E 2014/1350, Judgment 2019/5411, dated 10 June 2019). In the case reviewed by the Council of State, the GDMPA cancelled the operation licence of a marble mining company based on Article 24, paragraph 12 the Mining Law, which at the time the dispute arose read as follows: "Licences under which there is not, within a period of five years, any production for a period longer than three years for reasons other than force majeure or unforeseen events shall be cancelled and their guarantee deposits shall be accounted as revenue." Based on this provision, the GDMPA cancelled the operation licence of the mining company on the grounds that it did not use diamond cutters in its marble production, that the marble production therefore did not comply with the law and that the company's annual production over a period of three years was consequently less than 10% of the production amount it had declared to the GDMPA. The mining company challenged the GDMPA's decision to cancel its licence before the administrative court of Eskiºehir, which ruled in its favour, considering that the Mining Law does not require the use of diamond cutters as a production method. The GDMPA appealed the administrative court's judgment before the Council of State, which overruled the decision on the grounds that although the Mining Law does not specify that marble producers must use a diamond cutter as a production method, the mining company had mentioned that it would use diamond cutters in its operation project. As the mining company did not comply with the operation project, the Council of State concluded that the GDMPA's decision to cancel the operation licence was valid.
11 Trends and predictions
11.1 What changes have there been to the mining landscape in your jurisdiction in the last five years?
Foreign investment in the Turkish mining sector has declined over the last five years, mainly due to permit issues. However, thanks to the financing of some mining projects by foreign banks and sizeable local investments, the mining industry remains a key sector of the Turkish economy. Due to recently introduced incentive schemes for coal production, banks are also financing more coal projects. As part of its energy policy, Turkey aims to drastically reduce its natural gas imports to reduce the share of natural gas in power generation and increase the number of coal-fired plants. With 31.7 gigawatts (GW), Turkey has the second-highest capacity in pre-construction phase coal-fired plants in the world after China, although currently only 1.5 GW of coal power capacity is under construction.
11.2 How would you describe the current mining landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
The mining legislation has been subject to many amendments over the last five years, often resulting in a change of course in mining policy, divergences in the implementation of the legislation by the regulator and discrepancies between the Mining Law and the various mining regulations. The lack of continuity regarding permit issues has had an adverse effect on the creation of an investment-friendly environment and consequently on private sector investment. Nevertheless, the introduction of new investment schemes specific to the mining industry was considered to send a strong message to the industry. It is expected that some revisions to the Mining Law will be enacted by the end of 2020 in order to remedy the current discrepancies and to resolve issues relating to permits in particular.
12 Tips and traps
12.1 What are your top tips for mining operators in your jurisdiction and what potential sticking points would you highlight?
Our main recommendation is to closely monitor changes to the Turkish mining legislation and government investment schemes, and to engage legal, mining and environment experts in the very early stages of a mining project. We expect that project finance, especially from foreign banks, will play a key role in the development of the mining industry in Turkey, as this will reflect the confidence placed in the Turkish mining market. Other matters are likely to spark further debate, such as:
- environmental permits;
- the response of mining companies to public opposition of certain projects (especially in sensitive areas of Turkey, such as was recently seen in the Kaz Daðý region, which is known for tourism and high-quality agriculture); and
- coordination between different ministries and administrations in the issuance of various permits.
Another likely sticking point for mining operators concerns the financial feasibility of mining projects, as the frequent legislative amendments and the fluctuating state royalty amounts may adversely affect the certainty of current and potential mining projects.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.