Mustafa Selçuk Çevik, Member of the Board of Directors of the Istanbul Mineral Exporters' Association (İMİB) and Vice Chairman of the Board of Directors of the Turkish Chromium Producers Association (KROMDER), evaluated the latest developments in the mining sector, especially in chromium production and exports, at a press conference.
Sharing the information that there are approximately 15 thousand mining licenses in Turkey, Çevik stated that 10 thousand 136 of these are operating licenses and 5 thousand 386 are exploration licenses. Çevik noted that 850 of these 15 thousand mining licenses are chrome mines, of which 470 are operating licenses and the remaining 380 are exploration licenses. Çevik also stated that it is essential to establish a mining bank and underlined that the licenses issued do not create a value since the banks in the financial sector cannot put any collateral on the mines or make a value determination.
'Mineral Security Partnership' Against China
Pointing out that Western countries are experiencing 'China anxiety', Çevik said, "China's raw material and raw material processing capacity in the world scares Western countries a lot. We experienced this especially during the pandemic. When China closed down, we became unable to access some of the latest products in the world. One of the most striking examples is the chips in cars. Countries such as America, European countries, Australia and Japan have come together under the name of 'Mineral Security Partnership' against China. Europe has created the raw material alliance 'ERMA' within itself."
Stating that Europe has recently created a fund to break China's dominance, Çevik noted that they want to create structures that lead to end products in other countries that produce raw materials in order to break the dependence on China. Explaining that Europe mostly supports this in advanced technology products and health, Çevik said that they support and finance producers with low interest rates for chrome, ferrochrome and stainless steel production in their own sectors. Noting that Turkey can also benefit from this fund, Çevik emphasized that Europe's main goal is to create alternative producers to China and reduce dependence on this country.
'Mining Bank Should Be Established'
Pointing out that the establishment of a mining bank, which is on the agenda of the Istanbul Mineral Exporters' Association (İMİB), the Turkish Miners' Association and KROMDER, is essential, Çevik said: "Because the banks in our financial sector cannot put any collateral on the mines or make a value determination on them, the licenses do not create a value at the moment. Turkey entered a new era in mines in 2018 with the National Mineral Resource and Reserve Reporting Commission (UMREK). If valuations are made with UMREK, there will be a value. There are many standards in the world, not only UMREK, but also JORC standards. Our banks are very unfamiliar with these. Just as an appraisal can be made by an appraiser approved by the CMB and this can be done in a few days, mines also need to have people specialized in this field."
Stating that Export Development (İGE) Co. was established in October 2021 with the equity of the Turkish Exporters Assembly (TIM) and Eximbank in order to expand, support and facilitate the access to finance for exporters of goods and services through credit guarantee and surety practices, and to provide surety especially for export credits, Çevik said, "In order to get a loan from İGE Co., it is necessary to provide a letter of guarantee. What kind of letter of guarantee can the miner give? Maybe he can put the land of the factory he bought, he can show the equipment as collateral, but he cannot show the license. Miners pay a serious license fee to the state. This money goes to the general budget. Resources can be created from these and the bank to be established can be funded."
"License Fees and Lease Payments at the Mine Increased by 122 Percent"
Sharing the information that miners paid 7.6 billion TL in state rights in 2022, of which approximately 3 billion TL was the license fee and approximately 3 and a half billion TL was the forest rent, Çevik said, "These payments increased by 122 percent with the revaluation rate in 2023. A resource can also be created from here. Financing is also needed to make investments that will lead to end products. We want to emphasize that the sector needs such a structure for financing."
Stating that there are two large ferrochrome plants in Turkey, in Antalya and Elazığ, Çevik said, "When we look at the figures today, in the 9-month period of last year, we had a ferrochrome export of 313 million dollars. In the 9 months of this year, our exports almost halved to 186 million dollars. The main reason for this is that companies cannot work at full capacity due to energy costs. Companies produce and export the products that can be produced most easily and simply. These cannot work with systems such as large facilities and solar energy. Maybe with a dam or a thermal power plant. The state needs to subsidize this."
Ferrochrome 3 Dollars, Chrome 27 Cents in Exports
Pointing out that while ferrochrome exports fell by 50 percent, chrome exports increased by 20 percent, Çevik noted that the capacity utilization rate of ferrochrome facilities in the last 10 years has not exceeded 30 percent due to energy costs in Turkey, and continued his words as follows: "Since you cannot consume it within your own country, you have to sell it abroad. South Africa ranks first in the world in chrome exports. While we produce 1 and a half million tons, they produce 13 million tons. The closest and most suitable chrome for ferrochrome production is Turkish chrome. China uses our product by adding it to theirs, making it inferior in quality. However, apart from South Africa, Turkey and Albania, there is no country that exports chrome properly. Kazakhstan processes ferrochrome in its own ferrochrome plant and does not sell it abroad. Zimbabwe also took a decision and banned the sale abroad. Russia, too, does not sell it abroad, classifying it as a critical mineral. In fact, chromium is a critical mineral for our country as well. However, since we cannot process it domestically, we have to sell it. If we sell it as ferrochrome, it costs 3 dollars per kilogram, if we sell it as normal chrome, it costs 27 cents per kilogram, and if we sell it as stainless, it costs around 15 cents."
Finally, Çevik said that no chemicals are used in the separation of chromium and that it is separated with the help of water according to the original weight of the mine on completely shaky tables.
News Source: https://madencilikturkiye.com/turkiyedeki-krom-ihracati-yuzde-yirmi-artti/