Turkey Mining Industry Outlook – Market Opportunities and Entry Strategies Analyses and Forecasts

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					                           Turkey Mining Industry Outlook –
                           Market Opportunities and Entry
                           Strategies, Analyses and
                           Forecasts to 2016

                           Industry Forecast Report

BRICdata
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                           Reference code: MN0036MR
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EXECUTIVE SUMMARY



1 Executive Summary
Market size and growth potential

         The Turkish mining industry produced 246.9 million tons of minerals in 2011. The volume produced by the
          industry increased at a compound annual growth rate (CAGR) of 5.8% during the review period (2007–2011),
          and is projected to grow at CAGR of 4.56% over the forecast period (2012–2016), to reach 308.1 million tons in
          2016.
         The non-metallic mineral category accounts for the majority of mined resources in Turkey. In 2011, non-metallic
          minerals represented 51.1% of total Turkish mining production in volume terms, while coal accounted for a share
          of 45.5% of Turkish mining production volume, and metallic minerals accounted for 3.4%. However, the coal
          category’s market share is expected to increase over the forecast period, from 45.5% in 2011 to 47.9% in 2016.
Regulations

         Turkey implemented several favorable reforms in order to attract foreign businesses into the country during the
          review period. For example, the Turkish government passed the Turkish Foreign Investment Law, which enables
          both private and foreign companies to easily invest in the country’s mining industry. This created mining business
          opportunities and growth prospects, and led to the formation of new mining business entities, joint ventures and
          subsidiaries. In addition to this, the Turkish Parliament made amendments to the Mining Law in 2005, which
          aimed to provide foreign investors with opportunities to invest in the Turkish mining industry.
Trends

         The Turkish government has encouraged foreign investments through its liberal FDI policy and its planned
          accession to the EU. Fulfilling the accession criteria for joining the EU forced the Turkish government to initiate a
          series of political, economic and governance reforms in the country. These reforms have encouraged more
          transparency in business interactions and privatization, which created a favorable operating environment for the
          mining industry.
         Mining exploration will be an attractive investment opportunity in Turkey over the forecast period. According to a
          government organization, Turkish Coal Enterprises, Turkey is rich in mineral wealth which has only been partially
          explored and is currently underdeveloped. This provides a massive growth prospects for mining companies in
          Turkey and opportunities for new businesses.
         Turkey’s GDP is expected to expand at a CAGR of 3.1% over the forecast period, to reach a value of US$512.8
          billion in 2016. The Turkish mining industry will benefit from the country’s economic growth, since demand for
          mining increases alongside the country’s GDP growth.
Challenges

         The majority of Turkish mines use outdated mining equipment, which significantly reduces their production
          capacity. To address this problem, the Turkish government plans to privatize the mining industry, under the belief
          that private businesses will bring capital infusion and more modern, efficient mining equipment.
         Outdated equipment and low safety standards have been blamed for Turkey’s recent coal mine accidents, which
          claimed 47 lives in 2010. This worrying safety record means Turkey’s mines are considered to be some of the
          most dangerous mines in the world. These accidents arise as mine owners neglect safety procedures in order to
          maintain high levels of production.
Competitive landscape

         The competitive landscape in Turkish mining varies significantly depending on which mineral product is
          considered. For example, state-owned companies dominate the coal category, and there is little competition in
          this category. In addition, a small number of foreign companies account for the majority of the metallic mineral
          category market share. Meanwhile, global companies, such as El Dorado, Ariana Resources and Antolia
          Minerals, are beginning to provide competition to domestic companies in the production of precious metals such
          as gold and silver.




 Turkey Mining Industry Outlook – Market Opportunities and Entry Strategies, Analyses and Forecasts to
                                                                                                                          Page 2
 2016

© BRICdata. This product is licensed and is not to be photocopied                                        Published: February 2012
TABLE OF CONTENTS



TABLE OF CONTENTS
1         Executive Summary ......................................................................................................................... 2
2         Comparison with Key Global Markets ............................................................................................. 8
2.1       Country Attractiveness ....................................................................................................................... 8
3         Turkey Market Attractiveness and Emerging Opportunities ....................................................... 11
3.1       Mining Industry Market Size and Growth Potential ............................................................................ 11
3.2       Market Share and Production Trend Analysis by Category................................................................ 13
3.3       Mining Equipment Market Size and Growth Potential ........................................................................ 18
3.4       End User Market Dynamics .............................................................................................................. 19
3.5       Business Trends and Growth Drivers................................................................................................ 23
3.6       Macroeconomic Drivers .................................................................................................................... 25
3.6.1     GDP growth ..................................................................................................................................... 25
3.6.3     Inflation rate ..................................................................................................................................... 26
3.6.5     FDI inflow by industry ....................................................................................................................... 27
3.6.6     Manufacturing net output at current prices (US dollar) ...................................................................... 28
3.6.7     Construction net output at current prices (US$)................................................................................. 29
3.6.8     Electricity consumption ..................................................................................................................... 30
3.6.9     Crude steel production ..................................................................................................................... 31
4         Mining Import and Export Dynamics ............................................................................................. 32
4.1       Import Dynamics .............................................................................................................................. 32
4.2       Export Dynamics .............................................................................................................................. 34
5         Industry Dynamics: Five Forces Analysis..................................................................................... 37
5.1       Five Forces Analysis: Coal ............................................................................................................... 37
5.1.1     Bargaining power of supplier: medium to high................................................................................... 37
5.1.2     Bargaining power of buyer: low to medium ....................................................................................... 37
5.1.3     Barrier to entry: medium ................................................................................................................... 38
5.1.4     Intensity of rivalry: low to medium ..................................................................................................... 38
5.1.5     Threat of substitution: low ................................................................................................................. 38
5.2       Five Forces Analysis: Metallic Minerals ............................................................................................ 39
5.2.1     Bargaining power of supplier: medium to high................................................................................... 39
5.2.2     Bargaining power of buyer: low to high ............................................................................................. 39
5.2.3     Barrier to entry: low to medium ......................................................................................................... 39
5.2.4     Intensity of rivalry: low to medium ..................................................................................................... 40
5.2.5     Threat of substitution: low ................................................................................................................. 40
5.3       Five Forces Analysis: Non-Metallic Minerals ..................................................................................... 41
5.3.1     Bargaining power of supplier: medium to high................................................................................... 41
5.3.2     Bargaining power of buyer: low to medium ....................................................................................... 41
5.3.3     Barrier to entry: low to medium ......................................................................................................... 41
5.3.4     Intensity of rivalry: low to medium ..................................................................................................... 42
5.3.5     Threat of substitution: low ................................................................................................................. 42
5.4       Five Forces Analysis: Mining Equipment........................................................................................... 43
5.4.1     Bargaining power of supplier: low to medium .................................................................................... 43

 Turkey Mining Industry Outlook – Market Opportunities and Entry Strategies, Analyses and Forecasts to
                                                                                                                                                        Page 3
 2016

© BRICdata. This product is licensed and is not to be photocopied                                                                 Published: February 2012
TABLE OF CONTENTS



5.4.2     Bargaining power of buyer: low......................................................................................................... 43
5.4.3     Barrier to entry: medium to high........................................................................................................ 43
5.4.4     Intensity of rivalry: high ..................................................................................................................... 44
5.4.5     Threat of substitution: low ................................................................................................................. 44
6         Market Entry Strategy .................................................................................................................... 45
6.1       Market Regulation ............................................................................................................................ 45
6.2       Market Entry Route .......................................................................................................................... 46
6.3       Key Challenges ................................................................................................................................ 48
7         Competitive Landscape and Strategic Insights ............................................................................ 49
7.1       Competitive Landscape: Overview.................................................................................................... 49
8         Company Profile............................................................................................................................. 50
8.1       Anatolia Minerals.............................................................................................................................. 50
8.1.1     Anatolia Minerals: recent announcements and strategic initiatives .................................................... 50
8.1.2     Anatolia Minerals: products and services .......................................................................................... 50
8.1.3     Anatolia Minerals: reserves .............................................................................................................. 50
8.1.4     Anatolia Minerals: alliances .............................................................................................................. 51
8.2       Ariana Resources Plc ....................................................................................................................... 52
8.2.1     Ariana Resources Plc: recent announcements and strategic initiatives.............................................. 52
8.2.2     Ariana Resources Plc: products and services ................................................................................... 52
8.2.3     Ariana Resources Plc: reserves........................................................................................................ 52
8.2.4     Ariana Resources Plc: alliances ....................................................................................................... 53
8.3       European Nickel Plc ......................................................................................................................... 54
8.3.1     European Nickel Plc: recent announcements and strategic initiatives ................................................ 54
8.3.2     European Nickel Plc: products and services ..................................................................................... 54
8.3.3     European Nickel Plc: reserves .......................................................................................................... 54
8.3.1     European Nickel Plc: reserves .......................................................
				
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Description: Mining exploration will be an attractive investment opportunity in Turkey over the forecast period. According to a government organization, Turkish Coal Enterprises, Turkey is rich in mineral wealth which has only been partially explored and is currently underdeveloped. This could create massive growth prospects for mining companies in Turkey and opportunities for new businesses. Moreover, the economic prospects in Turkey are expected to remain positive over the forecast period, which suggests a massive opportunity for growth for mining companies over the forecast period. Further, the Turkish government has encouraged foreign investments through its liberal FDI policy and its planned accession to the EU. Fulfilling the accession criteria for joining the EU forced the Turkish government to initiate a series of political, economic and governance reforms in the country. These reforms have encouraged more transparency in business interactions and privatization, which created a favorable operating environment for the mining industry during the review period.
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