DOING IT RIGHT

Turkey 2020 | MINING & INDUSTRY | INTERVIEW

The ministry is working round the clock to increase the mining sector's contribution to GDP and ensure the companies operating in the sector are sensitive to the environment.

Fatih Dönmez
BIOGRAPHY

Fatih Dönmez has been the Minister of Energy and Natural Resources since 2018, having previously served as the ministry's undersecretary since 2015. He previously served as the commissioner and board member of the Turkish Energy Market Regulatory Authority (EPDK), as affiliates general coordinator for the Istanbul Metropolitan City Council (IMCC), and as CEO and board member for several of its affiliates. Dönmez also worked for the Istanbul Natural Gas Distribution Company and Turkish telecom firm Netaş. He graduated from Yıldız Teknik University's electrical engineering and electronics department and also completed his e-MBA certificate.

Turkey's mining sector accounts for around 1% of GDP but the government has a goal to increase that to 3%. How well positioned is Turkey to expand its mining sector?
It is important to increase the output of the mining sector in Turkey for a number of reasons—beyond just GDP growth. Mining activity in Turkey produces vital raw material inputs for the industrial sector; therefore, its expansion will reduce our dependence on imports. Turkey imported around USD27 billion worth of mining products in 2018; in comparison, Turkey's mining exports in 2018 stood at USD6-7 billion. Much of that USD20 billion trade deficit is due to gold imports, which amounted to USD8.5 billion in 2018. We also import other products such as copper and iron ore, among others. Contrary to what these figures might indicate, Turkey has significant mining resources—there are about 90 kinds of mining products in the world and 70 of them exist in Turkey.

What are the biggest challenges to expanding the mining sector's share of GDP, and how is the ministry working to decrease the sector's environmental impact?
Mining is a time- and cost-intensive activity. It can sometimes take 10 years between exploration and production. Investments in the sector are long-term commitments and therefore we need to be patient. The sector's expansion is also limited by environmental and location constraints. We don't initiate mining projects close to residential neighborhoods and cities as well as protected areas such as natural parks, national parks, SIT areas, and touristic areas. When you look at the remaining areas, they are often agricultural or forested land. In these cases, the Ministry of Agriculture or the General Directorate of Forestry have to be consulted, and we engage in studies about the environmental and economic impact of initiating a project. There are protections in place to ensure that citizen land rights and forested lands are respected.

How is the ministry involved in the rehabilitation of land after mining projects are completed?
We are involved in the rehabilitation process, especially when it relates to forested areas. If a mining project is to be initiated in a forested area, the General Directorate of Forestry has a specific permit process that has to be undertaken in line with its own legislation overseen by its regulation boards. For example, it is prohibited to mine in dense forests. Moreover, there are per unit costs of cutting trees, and projects are required to plant as many trees as they cut in a different location. The General Directorate of Forestry also receives rent income to help improve the condition of forests around the country. Once the mining operations cease, the mining area needs to be rehabilitated, which involves a number of processes, including reforestation. Our ministry has also contributed by initiating a campaign involving a number of stakeholders from the natural gas, electricity, mining, and energy sectors aimed at planting 5 million trees around the country. Maintaining a fair balance between protection and production will enable the economy to realize the full potential of the mining sector.

Can you outline the importance of the mining sector?
Minerals are used in nearly every product we use on a daily basis. In Turkey, the sector employs around 130,000 people. Its importance for the economy is clear. While Turkey's mining sector accounts for 1% of GDP, the mining sector in countries such as the US, Canada, China, South Africa, and Australia represents over 10%. While we are doing all we can to catch up, it is also paramount that we vet the companies operating in the sector to make sure they are sensitive to the environment and local communities.