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Turkey 2020 | MINING & INDUSTRY | INTERVIEW

Cengiz's investment in the Mardin Mazıdağı Metal Recycling and Integrated Fertilizer Plant was the largest private investment in the history of southeast Turkey.

Ömer Mafa
BIOGRAPHY

Ömer Mafa has been the general coordinator of Cengiz Holding since 2004. Prior to this, he served as Cengiz Enerji's general manager. Previously, Mafa worked for Balen, a Cengiz Holding subsidiary, SASIM, Caterpillar, BMG, and BSN Givors. He has degrees from Saint-Joseph French College and the Institut National des Sciences Appliquées in Lyon.

Cengiz Holding has invested hundreds of millions of dollars to renovate Eti Bakır's operations after acquiring it. Can you give me an overview of these investments and what operational benefits were achieved?
Eti Bakır is Turkey's largest mining metallurgical and chemical company, operating mines in Küre, Murgul, Cerattepe, Adıyaman, and Siirt, as well as a smelting plan in Samsun, and a metal recycling and integrated fertilizing plant in Mazıdağı. In the past 15 years, we have made investments into Eti Bakır plants totaling USD635 million to increase production capacity, modernize the equipment, and help other valuable fields such as the environment and occupational health and safety. We have become one of the most modern underground and open-pit mining and metallurgical plants in Europe thanks to these investments. As an example, the Samsun smelting plant was producing intermediate quality blister copper, which had 98-99% purity before the investments, but can now produce 99.999% cathode copper with LME A-grade quality. Before the privatization of Eti Bakır's Samsun smelter plant, it was damaging the tobacco fields in the surrounding villages due to its outdated technology, as it could not hold all the SO2 gas coming out of the chimneys. This is why we initiated a major investment and improvement initiative in the facilities following the privatization process. Today, its emission rate is one-third of that allowed by EU standards, and the waste gases that previously damaged farmers' crops are now recycled back into production thanks to the investments. The ammonium sulfate fertilizer plant that we built in Samsun captures the SO2 gas, converts it to fertilizer, and sells it back to the local economy, producing 580,000 tons of fertilizer annually.

What investments were made to increase mineral production to meet the increased capacity of the renovated plants?
The renovation of the factory was not enough to increase production, as the amount of raw materials supplied needed to increase as well. For this reason, we drilled and found new reserves in the copper mines of Küre and Murgul. We also acquired new mining companies in Adıyaman and Siirt. Thus, with these new investments, we increased our annual production from 32,000 to 75,000 tons.

In the future, what specific renovations and modernization efforts will Eti Bakır focus on?
We are finalizing a new investment plan that will see another USD450 million invested by 2023. These investments will be in zero-waste technology, high value-added end products, and finding additional mine reserves. We are also establishing an R&D base with an investment of USD5 million and conducting more than 200,000m of drilling per year to expand our mine reserves. In addition to these investments, the Mardin Mazıdağı Metal Recycling and Integrated Fertilizer Plant, which we designed and built from scratch, was completed and began operations in 2018. The USD1.2-billion investment in this facility is the largest private-sector investment in southeastern Turkey to date.

From a turnover perspective, can you break down Eti Bakır's revenue by product? Who are the primary end consumers of your products?
Broadly speaking, cathode copper sales account for 60% of our revenue, sulfuric acid and antimony sales account around 10%, recycled metals around 15%, and DAP or phosphate-containing fertilizer 15%. Digging into the uses of these products, cathode copper is a key high-purity industrial product used in copper wire and plates production, especially in the production of various alloys such as brass-bronze alloys. The demand for copper is high in Turkey because only around 20% of the demand can be sourced domestically. Sulfuric acid is used in many industrial fields, including the ore-leaching process and widely in the chemical industry, thermal power plants, sugar factories, and production stages of the iron and steel industries. Our metal recycling and integrated fertilizer facilities output precious metals, including zinc, iron, and cobalt, which are largely sold locally. Cobalt, which is used in battery production, has become a product of strategic value for our country, especially with the increasing interest in electric vehicles. Almost all of Turkey's phosphate resources are located where we operate in Mazıdağı, Mardin region, and are key inputs to fertilizer products.