1
REPUBLIC OF TURKEY PRIME MINISTRY
Investment Support and Promotion Agency of Turkey(ISPAT)
Turkish Mining Industry
Investment Support and Promotion Agency of Turkey
AGENDA
The Agency
Overview of Turkish Mining Industry
Deep Dive on Priority Minerals of Turkish Mining Industry
New Incentive Regime
Investment Support and Promotion Agency of Turkey
Investment Support and Promotion Agency of Turkey (ISPAT)
Investment Support and Promotion Agency of Turkey
ISPAT
Attached to the Prime Ministry and reports directly to the Prime Minister
Private sector approach Result oriented Multi-lingual, professional and dedicated project directors ONE STOP SHOP 2 offices (Ankara – Istanbul) Establishment of the Agency in 2007 is a proof for
improvement of the investment climate in Turkey
ISPAT
Investment Support and Promotion Agency of Turkey
ISPAT
International representatives network worldwide and strategic partners in Turkey (Embassies, Consulates, Commercial Attaches, NGO’s etc)
The International Network
Investment Support and Promotion Agency of Turkey 6
Turkish Mining Industry
Turkey’s Potential is:2.5% of the World Reserves of Industrial Raw Materials
0.6% of the World Reserves of Metallic Minerals
2004 2005 2006 2007 2008 2009
138
188236
318
409478
Number of Companies with Foreign Capital in Mining
SOURCE: USGS, MTA
Boron SaltsMarble
Na-FeldsparBentonite
PumicePerlite
Diatomite Barite
ChromiumSilverGold
PhosphateCopper
Iron
72.00%
40.00%
19.14%13.40%
9.74%
8.70%4.81%
4.73%
1.44%1.06%
0.67%
0.57%0.29%
0.03%
Investment Support and Promotion Agency of Turkey 7
Turkish Mining Industry
2005 2006 2007 2008 2009 2010
2.1812.732
3.528
4.541 4.247 4.493
Mining Sector Imports*U.S $ Million
2005 2006 2007 2008 2009 2010
1.468
2.004
2.6123.119
2.327
3.468Mining Sector Exports*
U.S $ Million
Turkey strong in exports of▪ Gold jewelry
▪ Natural stones and cement
Major trade imbalances in▪ Coal
▪ Copper
▪ Aluminum
2010, U.S. $ billions
*Raw Materials ,Ores and Concentrates+Includes all products in the value chain in addition to ores and concentrates
+
SOURCE: UN Comtrade; EtiBor; McKinsey&Company
Investment Support and Promotion Agency of Turkey 8
Turkish Mining Industry2005 2006 2007 2008 2009 20109.0
5.2
8.1
5.4
-6.9
4.7
Growth of Output in Mining Sector %
2005 2006 2007 2008 2009 2010
5.1666.214
8.105
10.1729.210
10.250
Mining Sector IncomeU.S $ Million
Global Crisis
Current Global Market Size (U.S $Billion)
SOURCE: McKinsey&Company, State Planning Organization
Investment Support and Promotion Agency of Turkey 9
Gold
Turkish gold reserves are around 700 tons (increased from 600 tons over the last 5 years, MTA alone discovered 45 tons in 2009).
Probable reserves estimated around 1,700-6,500 tons1 making up for as high as 1/8th of globally proven reserves.
Overview
1 ODTU metallurgical engineer Ayhan Erler and MTA’s cooperative study concluded 1,700-6,500 tons of gold potential in 580 different locations in Turkey
2005 2006 2007 2008 2009 2010
275
203242
180
53 64
1038 49
142 165
56
Turkey Gold Trade Import ExportTons
2005 2006 2007 2008 2009 2010 2011
58
10 11
1517
24Gold Production of TurkeyTons
+30%
Gold production in Turkey gained momentum following the legislation change facilitating exportation of unrefined gold.
SOURCE: MTA, Istanbul Gold Exchange, McKinsey&Company
Investment Support and Promotion Agency of Turkey 10
Gold Gold reserves
Anatolia Minerals
Koza Gold mine
Eldorado Gold
Potential gold-silver reserves
Turkish Gold Reserves
Ovacık
Masra
Çukuralan and Kaymaz
Efemçukuru
Kışladağ
5
12
47
53
415
Reserve Name
Company Production 2010 Tons
3
4
0
0
10
Reserves 2010 Tons
332
2889
31 15 34 27 18 11 24
Possible Production Sites
Turkey has 700 Tons of proven reserves concentrated in Aegean and Black Sea regions
SOURCE: MTA, Istanbul Gold Exchange, McKinsey&Company
Investment Support and Promotion Agency of Turkey 11
Copper Turkish Copper ReservesOperational Mines
Operable Mines
Downstream industries such as;
Automotive(Expected to grow %11 average and reach up to 23 $ Billion in 2015)
Construction(Expected to grow %7 average and reach up to 79 $ Billion in 2015) will boost Copper Imports.
2008 2009 2010 2011 2015
272 289 332 312
386Thousand Tons
+5%+5%
Copper Imports
168
12642
332
379
5
2010,thousand metric tons
Total domestic refined Copper consumption
Refined Copper import
Secondary production from scrap
Refined in domestic facilities
Exported as concentrate
Concentrate production
Primary Production
Given small refining capacity most of the copper sold as concentrate.
SOURCE: MTA,McKinsey&Company
Investment Support and Promotion Agency of Turkey 12
Turkish Bauxite Reserves
In midstream Turkey has a big gap driven primarily by automotive and construction industries.
878150
665
63
Net importsSecondary (scrap to aluminum players)
Primary (Seydişehir)
Mid-stream production by Aluminum source 2010, thousand metric tons
-1.6
Bauxite mining + alumina refining Aluminium
smelting
Semi production
0.025 1.0
MidstreamUpstream Downstream
1.0
Net Trade
2010, U.S. $ Billion
Aluminum
SOURCE: MTA,McKinsey&Company
Investment Support and Promotion Agency of Turkey 13
2003 2004 2005 2006 2007 2008 2009 2010
27 61104 120
253
498
268
475
Chromium
Turkey has %6 of world production.
Worlds 3rd chromite exporter with %12.8.
Turkish Chromium Reserves
2003 2004 2005 2006 2007 2008 2009
5041.168
1.620 1.849
3.639
5.100
6.240
+1148%
Thousand tons U.S. $ Million
Chromium Production
364575
8471.079
1.3821.816 1.746
2.258Thousand tons
Chromium Export
SOURCE: MTA, Team Analysis
Investment Support and Promotion Agency of Turkey
INVESTMENT INCENTIVES IN TURKEY
1. General Incentive System
2. Incentives for Large Scale
Investments
3. Regional Incentive System
4. Incentives for Strategic Investments
Investment Support and Promotion Agency of Turkey
NEW INCENTIVE SYSTEM
1. General Incentives 2. Regional Incentives
3. Incentives for large-scale Investments
4. Incentives for Strategic Investments
VAT Exemption Custom Duty Exemption
VAT Exemption Custom Duty Exemption Tax Deduction Employer’s share for
insurance premium payment
Land provision
VAT Exemption Custom Duty Exemption Tax Deduction Employer’s share for
insurance premium payment
Land provision Interest Support (except 1st
and 2nd regions)
VAT Exemption Custom Duty Exemption Tax Deduction Employer’s share for
insurance premium payment
Land provision Interest Support VAT Refund
In the 6th Region; income withholding tax and employee’s share for insurance premium payment
Investment Support and Promotion Agency of Turkey
Regional Incentive Map
Investment Support and Promotion Agency of Turkey
SPECIFIC PRIORITY INVESTMENTS
Specific Priority Investments to be supported by measures of Region V regardless of the region of the Investment:
Mining investments
Railroad and maritime transportation investments
Test facilities, wind tunnel and similar investments made for
automotive, space or defense industries
Tourism investments in Cultural and Preservation and Development
Regions determined by the Council of Ministers Decree
Primary, Middle and High School investments by private sector
Specific pharmaceutical and defense industry investments with
minimum investment amount of 20 million TL
17
Investment Support and Promotion Agency of Turkey
LARGE-SCALE INVESTMENT INCENTIVE SCHEMEInvestment Sectors Amount of minimum
fixed investment (million TL)
Production of Refined Petroleum Products 1000Production of Chemical Products 200Ports and Port Services 200 Automotive OEM Investments 200 Automotive Supply Industry Investments 50 Railway and Tram Locomotives and/or Railway and Tram Cars 50Transit Pipeline Transportation Services 50Electronics 50 Medical, High Precision and Optical Equipment 50Pharmaceuticals 50 Aircraft and Space Vehicles and/or Ports 50Machinery (including electrical machinery and equipment) 50Mining investment (including metal production) 50
Investment Support and Promotion Agency of Turkey
STRATEGIC INVESTMENT INCENTIVE SCHEME
Investments meeting the criteria below are supported within the framework of
the Strategic Investment Incentive Scheme:
Having an import of at least 50 million USD for goods to be produced in the last one year period.
Realizing the production of intermediate and final goods with high import dependence of which more than 50 % are supplied by import,
Having a minimum investment amount of 50 million TL ,
Creating minimum 40 % added value,
19
Investment Support and Promotion Agency of Turkey
APPLICATION OF THE STRATEGIC INVESTMENT
Incentives (‘000 TL) Investment Amount: 50 Million TL Employment: 100 People
Investment Amount: 500 Milyon TL Employment: 1000 People
VAT Exemption 1.140 11.400
Custom Duty Exemption 700 7.000
VAT Refund - 11.460
Tax Deduction 25.000 250.000
Employer’s Share for Social Security Premium
1.445 14.448
Interest Support 2.500 25.000
Land Allocation 2.500 25.000
Total State Support 33.285 344.308
Support Density (%) 67 69
20
Investment Support and Promotion Agency of Turkey 21
ON
Investment Support and Promotion Agency of Turkey 22
THANK YOU FOR YOUR ATTENTION
For Questions and Inquiries•Dr. Serdar Altay [email protected]•Mehmet Tangut [email protected]