1. Historical Background of Mining Law in Turkey
Türkiye, blessed with an abundance of mineral resources, has had mining activities under regulation since the 19th century. The governance of mining operations has been a key focus both during the Ottoman Empire term and throughout the early years of the Republic of Türkiye. In the Ottoman era, legal frameworks established in the mid-19th century addressed the exploration and utilization of mineral deposits, as well as the rights of miners. With the advent of the Republic, mining activities were incorporated into constitutional provisions, and their principles have since been shaped by laws and secondary legislation, reflecting a commitment to a structured and comprehensive regulatory approach. While the Land Law dated 1858, Mines and Mineral Resources Regulation were a part of the regulations during the Ottoman Empire era, with the establishment of the Republic of Türkiye, mining operations transitioned to a more structured framework, governed by constitutional provisions, laws, and secondary legislation, reflecting the evolving regulatory approach in the sector.
2. Regulatory Framework
2.1. The Constitution of the Republic of Turkiye
Article 168 of the Constitution of the Republic of Turkiye ("Constitution") is as follows:
"Natural wealth and resources shall be under the authority and at the disposal of the State. The right to explore and exploit these belongs to the State. The State may delegate this right to people or corporate bodies for a certain period. Of the natural wealth and resources, those to be explored and exploited by the state in partnership with persons or corporate bodies, and those to be directly explored and exploited by persons or corporate bodies shall be subject to the explicit permission of the law. The conditions to be observed in such cases by persons and corporate bodies, the procedure and principles governing supervision and control by the State, and the sanctions to be applied shall be prescribed by law"
As described by Article 168 of the Constitution, the right to explore and exploit natural wealth and resources shall be under the sole authority of the State. This right may be delegated to third persons for a certain period in accordance with the rules specified in the relevant legislation.
2.2. Mining Law numbered 3213 and dated 04.06.1985 ("Mining Law")
The scope of the Mining Law is described in Article 2 and all kinds of substances other than petroleum, natural gas, geothermal and water resources, which are naturally found in the earth's crust and water resources and have economic and commercial value are considered as a mine ("Mine"). Therefore, the scope of the Mining Law excludes petroleum, natural gas, geothermal and water resources and Mining Law divides the Mines into 5 different groups, which are as follows:
2.2.1. Group I. Group I Mines consists of:
- Sand and gravel that used in construction and road building and found naturally in nature,
- Brick-tile clay, cement clay, marl, pozzolanic rock (Tras) and rocks used in cement and ceramic industries and not included in other groups.
2.2.2. Group II. Group II Mines consists of:
- Rocks such as Calcite, Dolomite, Limestone, Granite, Andesite, Basalt used for aggregate, ready-mixed concrete and asphalt,
- Stones produced as blocks such as marble, travertine, granite, andesite, basalt and natural stones used for decorative purposes,
- Rocks used in integrated cement, lime and calcite grinding plant from rocks such as Calcite, Dolomite, Limestone, Granite, Andesite, Basalt.
2.2.3. Group III. Group III Mines consists of:
Salts in molten form to be obtained from sea, lake, spring water, carbon dioxide (CO2) gas (except geothermal, natural gas and oil fields) Hydrogen Sulfide (without prejudice to the provisions of the Petroleum Law No. 6326 dated 7/3/1954).
2.2.4. Group IV. Group IV Mines consists of:
- Kaolin, Dikit, Nakrit, Halloysite, Endellite, Anaxite, Bentonite, Montmorillonite, Baydilit, Nontronite, Saponite, Hectorite, Illite, Vermiculite, Allofan, Imalogite, Chlorite, Sepiolite, Paligorskit (Atapuljit), Loglinite and their mixtures, Refractory clays, Gypsum, Anhydrite, Alunite (Alum), Halite, Sodium, Potassium, Lithium, Calcium, Magnesium, Chlorine, Nitrate, Iodine, Fluorine, Bromine and other salts, Boron salts (Colemanite, Uleksit, Boracite, Tinkal, Pandermit or other Boron minerals containing at least 10% B2O3), Strontium salts (Celestine, Strontocyanite), Barite, Vollastonite, Talc, Steattite, Pyrophyllite, Diatomite, Olivine, Dunite, Sillimanite, Andalusite, Dumortiorite, Disten (Kyanite), Phosphate, Apatite, Asbestos (Amyant), Magnesite, Huntite, Natural Soda minerals (Trona, Nakolit, Davsonit), Zeolite, Pumice, Pumice, Pechthalene, Perlite, Obsidian, Graphite, Sulphur, Fluorite, Cryolite, Sandstone, Corundum, Diasporite, Quartz, Quartzite and Quartz sand containing at least 80% SiO2, Feldspar (Feldspar and Feldispatoid group minerals), Mica (Biotite, Muscovite, Sericite, Lepidolite, Phlogopite), Nepheline Syenite, Chalcedony (Silex, Chert).
- Peat, Lignite, Hard Coal, Anthracite, Asphaltite, Bituminous Shale, Bituminous Shale, Coccolite and Sapropel (without prejudice to the provisions of the Petroleum Law).
- Gold, Silver, Platinum, Copper, Lead, Zinc, Iron, Pyrite, Manganese, Chromium, Mercury, Antimony, Tin, Vanadium, Arsenic, Molybdenum, Tungsten (Tungstenite, Chelite), Cobalt, Nickel, Cadmium, Bismuth, Titan (Ilmenite, Rutile), Aluminum (Bauxite, Gipsite, Bohmite), Rare earth elements (Cerium Group, Yttrium Group) and rare earth minerals (Bastnazite, Monazite, Xenotime, Serite, Oyksenite, Samarskite, Fergusonite), Cesium, Rubidium, Beryllium, Indium, Gallium, Thallium, Zirconium, Hafnium, Germanium, Niobium, Tantalum, Selenium, Tellurium, Rhenium.
- Radioactive minerals and other radioactive substances containing elements such as Uranium, Thorium, Radium.
2.2.5. Group V. Group V Mines consists of:
Diamond, Sapphire, Ruby, Beryl, Emerald, Morganite, Aquamarine, Heliodor, Alexandrite, Agat, Onyx, Sardonyx, Jasp, Carnoline, Heliotrope, Cantash, Chrysoprase, Opal (Irized Opal, Red Opal, Black Opal, Wood Opal), Quartz crystals (Amethyst, Citrine, Najafstone (Mountain crystal), Smoky Quartz, Cat's Eye, Avanturine, Venusstone, Rose Quartz), Tourmaline (Rubellite, Vardelite, Indigolite), Topaz, Moonstone, Turquoise, Spodumene, Amber, Lazurite (Lapislazuli), Oltstone, Diopside, Amozonite, Meerschaum, Labrodorite, Epidote (Zeosit, Tanzonite), Spinel, Jadeite, Jade or Jad, Rhodonite, Rhodochrosite, Garnet Minerals (Spesartin, Grosullar Hessanite, Dermontoite, Uvarovite, Pirop, Almandin), Diaspor Crystals, Kemererite.
2.3. Mining Rights.
Under Article 6 of the Mining Law, mining rights in Türkiye are exclusively granted to Turkish citizens, companies established in compliance with Turkish laws, state economic enterprises, their subsidiaries and affiliates, as well as authorized public institutions, organizations, and administrations ("Mining Rights"). As a result, foreign citizens and foreign legal entities are not eligible to acquire mining rights in Türkiye, as these rights are strictly reserved for Turkish nationals, Turkish legal entities, and designated public institutions.
2.4. State's Right.
As outlined in Article 168 of the Constitution, the State retains exclusive authority over the exploration and exploitation of natural wealth and resources. While this right may be transferred under specific conditions, the State's entitlement to benefit from these resources remains intact even after the transfer. Furthermore, under Article 14 of the Mining Law, the State is entitled to receive a percentage of mine's value. This percentage, ranging from 1% to 8%, is determined annually by the General Directorate of Mining and Petroleum Affairs ("MAPEG") for each specific type of mine.
2.5. The Right of Discoverer.
In case the State transfers its right regarding the mines to third parties through a license, the license holder shall be deemed to be the discoverer of the mines reported as resources or reserves in the technical reports prepared in accordance with the National Mineral Resource and Reserve Reporting Code (UMREK Code) during the exploration and/or operation license. The discoverer's fee is 1% of the annual sales price of the mines.
2.6. Municipality's Share.
According to Article 89 of Mining Regulation dated 11.12.2022 ("Mining Regulation"), if the area where the mine is produced as raw material is within the municipal boundaries and adjacent areas, 0.2% of the sales amount of the mine shall be paid to the relevant municipality by the license holder as municipality's share.
3. Types of Mining Licenses in Turkiye.
In Türkiye, mining licenses can be issued through two primary methods: tender proceedings or direct applications by parties who hold mining rights. The following table shows the groups of Mines that can be subject to tender proceedings or applications of the mining rights holders;
3.1.Exploration License
Exploration License refers to a license authorizing the license holder to conduct exploration activities in specific areas.
3.1.1. Mining Groups Subject to Exploration License
The exploration of the following Mining Groups shall be subject to exploration license:
3.1.1.1. Group II-b and Group IV Mines: Through the application of the Mining Right holders.
3.1.1.2. Group III and Group V Mines: Through tender proceedings.
3.1.1.3. Group I-b and Group II-a, c Mines shall not be subject to exploration license
3.1.2. Duration of the Exploration License
The duration of the exploration licenses for different Mining Groups are as follows:
3.1.2.1. Preliminary Exploration Period: 1 year for all Mining Groups subject to exploration license.
3.1.2.2 General Exploration Period: 2 years for Group IV Mines, and 1 year for other Mining Groups subject to exploration license starting from the end date of the Preliminary Exploration Period.
3.1.2.3. Detailed Exploration Period: 4 years for Group IV Mines starting from the end date of the General Exploration Period.
3.1.2.4. Feasibility Period (if required): 2 years for Group IV-b, c, ç Mines starting from the end of the Detailed Exploration Period.
3.2. Operating License
Operating License refers to a license showing the area(s) and period of time deemed appropriate by MAPEG to carry out operation activities. All the Mining Groups are subject to operation license and the requirement to obtain operating licenses starts as follows:
3.2.1. The Mining Right holders can apply directly to operating license for Group I-b and Group II-a-c Mines within 2 months following the tender,
3.2.2. The Mining Right holders shall apply for operating licenses until the date of expiration of their Exploration Licenses.
3.2.3. Duration of the Operating License
According to Article 36 of the Mining Regulation, the duration of the operating license for Group I - b, Group II, Group III and Group IV Mines shall be determined according to the apparent and probable reserves and the project. The first operating license period of Group V mines is five years. The operating license period of other Mining Groups shall not be less than ten years.
3.3. Operation Permit
Once the operating license is granted and all required permits have been obtained, holders of mining rights are entitled to apply for an operation permit to commence their mining activities within the specified area. However, holders must secure the operation permit within three years from the date of the operating license. Failure to do so may result in administrative fines being imposed on the operating license holders.
4. Royalty Agreements
The companies holding the required licenses and permits may prefer to enter royalty agreements for several strategic and financial reasons such as predictable revenue sharing, operational flexibility and mitigating the risk. Although Article 5/1 of Mining Law prohibits the division of rights regarding first application, exploration license, discovery, apparent reserve development and operating license into shares and regulates that each of these shall be treated as a whole, according to Article 5/2 of Mining Law, mining licenses, apparent reserve development right and the right of discovery can be transferred to third parties subject to the approval of the Republic of Turkiye Ministry of Energy and Natural Resources.
Similar to the license holders, the royalty holders shall have the Mining Rights as explained under Article 6 of the Mining Law. Article 101 of Mining Regulation regulates some of the key rules applicable to the royalty relationship as follows:
- The royalty agreements signed by mining license holders with third parties for some or all of their license areas and the changes made in these agreements must be submitted to the MAPEG for information purposes and annotated to the mining registry for information purposes.
- Royalty agreements shall be annotated in the mining registry records as of the date authorized by MAPEG.
- Except for public institutions and organizations and their subsidiaries, royalty agreements shall not be made in underground coal fields.
- More than one royalty agreement can be made by giving coordinates for different areas within the same license area, providing that these areas do not overlap with each other. Royalty agreements without coordinates shall not be annotated in the mining registry.
- In the royalty agreements, the end date of the agreement shall be specified in days/months/years including possible extensions. More than one royalty contract cannot be concluded in the same area even if there is a difference in elevation/level.
- The royalty holders shall meet the financial requirements specified in the Mining Regulation.
- The administrative, financial and legal responsibilities related to the Labor Law, occupational health and safety arising from the mining activities to be carried out in the mining areas shall belong to the royalty holder. This situation does not eliminate the technical, financial and legal responsibilities of the license holder arising from the Mining Law.
h. Share transfers of more than 10% that may lead to a change in the shareholding structure of the royalty legal entity are subject to the permission of the MAPEG.
5. Conclusion
The Mining Law in Türkiye establishes a comprehensive and structured legal framework governing the exploration, extraction, and management of the nation's abundant natural resources. While the Constitution grants the State exclusive authority over these resources, it permits the delegation of this authority to third parties who meet specific criteria. A key prerequisite for participating in mining activities, as outlined in Article 6 of the Mining Law, is being a Turkish citizen or a company incorporated under Turkish law.
Depending on the classification of the mines, the mining process generally involves three key steps: (i) obtaining an exploration license, (ii) securing an operating license upon completion of exploration activities, and (iii) acquiring an operation permit to commence mining activities. License and permit holders may choose to exercise their rights independently or transfer them to royalty holders through royalty agreements.
While conducting business with the relevant licenses and permits it is also crucial to comply with the rules regarding State's right, the right of discoverer and municipality share.
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.
