Turkish Mining Law

Turkish Mining Law
Turkish Mining Law

Turkish Mining Law

Due to its peculiar geological setting, Turkey is a mineral-rich country. Therefore Turkish administrations aim to use this potential and enhance investment in the mining sector. Various legislative amendments have been made during the recent years to achieve this aim. This Article intends to give a short overview of the legal framework for mining activities in Turkey.

1. An overview of the legislative framework

Mining activities are mainly governed by the Mining Law No: 3213[1] as amended by various amending laws, the most recent one being the Law Amending the Mining Law and Certain Laws and Decrees numbered 7164 (the “Amending Law“)[2]. The Mining Law regulates the principles and the procedures to explore, operate and obtain mineral rights. Main regulations enacted for the implementation of the Mining Law includes the following

  • Mining Regulation, published in the Official Gazette No. 30187 dated 21 September 2017;
  • Regulation on Mining Activity Permits, published in the Official Gazette No. 25852, dated 21 June 2005;
  • Regulation on the Tender of Mining Fields, published in the Official Gazette No. 30187, dated 21 September 2017,
  • Regulation on the Transfer of Mining Districts and Licences, published in the Official Gazette No. 30429, dated 23 May 2018

Other important pieces of legislation concerning mining activities include the Environmental Law No. 2872 (dated 11 August 1983) and the Environmental Impact Assessment Regulation (published in the Official Gazette No. 29186, dated 25 November 2014) (EIA Regulation).

In addition to the aforesaid main legislation, other regulations may applicable to certain stages or aspects of mining activities such as environmental regulations, health and safety regulations

The mining activities are administered by the Ministry of Energy and Natural Resources (“Ministry”). General Directorate of Mining and Petroleum Affairs (“General Directory”) is the authorized office of the Ministry office in chargeof administering mining activities and issuing mining licenses. All information and records related to mining activities are kept by the Mining Registry administered by the General Directorate.

2. Ownership and Rights on Minerals

The minerals are exclusively owned by the state. The state may delegate certain mining rights to individuals or legal entities for a determined period of time in return for a payment of a remuneration which is referred to as “State Right” under the mining legislation. Mining rights may only be granted to Turkish citizens, companies incorporated under Turkish laws and authorized state economic enterprises and their affiliated institutions, subsidiaries or affiliates and other public authorities. Foreign entities may not obtain any mining rights. However, foreign capital companies incorporated in Turkey under Turkish laws may hold mining rights since they are considered as Turkish legal entities.

3. Type of Mining Rights and Authorizations

Mining rights that may be conferred to Turkish individuals and legal entities are discovery rights, apparent reserve development rights, exploration rights and operation rights. The Mining Law categorizes the minerals in five different groups and sub-groups within the main groups. The types of rights that may be granted and procedure applicable to each group of minerals are different. Mining rights obtained in relation to a specific group of minerals do not entitle the right holder to exploit the other group of minerals.

The authorizations that are required for each of the mining rights are as follows:

  • Exploration Rights
    Mineral exploration activities in a specific area may be carried out by obtaining an exploration licence (or exploration certificate for Group V minerals) from the General Directorate. The exploration activities consist of pre-exploration, general exploration, detailed exploration and if applicable feasibility stages. The exploration licence may be granted with for a term of three to seven years depending on the mineral type, which may be extended. Limited amount of production can be made under an exploration licence with a production permit to be obtained from the General Directorate.

  • Operation Rights
    Exploration licence holders may be granted operation licences by the General Directorate in order to operate the potential mineral reserves that were found during the exploration stage. Operation licences may be granted directly for certain type of minerals without obtaining exploration licence. Depending on the group of minerals in question, the operation licences may be with a term of ten to fifty years except for those related to Group V and some of the Group I minerals, which may be issued for a term of five years.

    In order to commence operation activities after obtaining an operation licence, an operation permit must be obtained from the General Directory, which will be for the term of the operation licence. An operation permit may be granted only after obtaining the authorizations enumerated in Article 7 of the Mining Law, which include:

    • An affirmative Environmental Impact Assessment (“EIA”) certificate or a certificate stating that EIA is not required,
    • Permits related to special areas such as forest areas, agriculture areas, feeding area, hunting areas, special protection areas, national parks, as well as cultural protection areas, coastal areas, tourism regions and military forbidden zones,
    • Land ownership or land usage permits,
    • Workplace opening and operation permits,
    • Environmental permits other than EIA certificate including discharge permit, emission permit, waste storage permit

  • Discovery Rights
    Exploration and operation licence holders of certain type of minerals may conduct discovery activities during their licence period and are deemed the finder of the minerals they declare as “resource” or “reserve” based on the technical reports to that effect. A discovery certificate is issued upon the finder’s application. The finder will be entitled to a payment for the minerals produced if the mining site is operated by a party other than the finder.

    Another related right which may be granted under the Mining Law is “apparent reserve development right”. Accordingly, third parties may be entitled to a share of the reserve if they discover or develop apparent reserves on the mining site based on an agreement with the licence holder.

    Discovery rights and apparent reserve development rights may be registered at the Mining Registry upon application.

4. Legal Transactions related to Mining Rights

The mining rights and the underlying licences may be subject to certain legal transactions. Some of the legal transactions concerning mining rights and the procedures applicable to such transactions include the following:

  • Transfer and Assignments
    The mining exploration and operation licences and discovery rights may be transferred to third parties, which are entitled to hold such mining rights and licences. Transfer and assignment of mining rights and licences requires the approval of the General Directorate. All the other permits and obligations relating to the transferred licence remain valid. An operation permit cannot be transferred separately from the operation licence. On the other hand, discovery rights may be transferred independent from the underlying licence, which they are related to since those are independent from the licence status.

    The mining licence holders may execute royalty agreements with third parties based on which such third parties may operate the mining site during the term of the agreement in return for a royalty fee.

    Transfer of mining rights and the royalty agreements must be registered with the Mining Registry kept at the General Directorate.

  • Transfer of shares of the mining licence holder
    In the event of the transfer of shares of a mining licence holder company, the approval of the General Directorate is required if the shareholding structure of the legal person holding a mining licence changes more than 10% of its share capital as a result of the share transfer

  • Collaterals
    Mortgages may be established on mining operation licences as collateral for the outstanding or future debts of the licence holder. Minerals produced under a mining licence may also be used as security for outstanding and future debts. Accordingly, mining exploration and operation licence holders may pledge the minerals that are produced under the licences to third parties. The mortgages, pledges and other encumbrances must be registered with the Mining Registry.

This Article aims to provide a brief and general overview of the Turkish mining law, but does not intended to serve as a legal advice. Before taking any action or relying on the information given, addressees of this Article should seek specific advice on the matters which concern them.

[1] Mining Law No: 3213 published in the Official Gazette dated 4 June 1985 numbered 18785

[2] Law Amending the Mining Law and Certain Laws and Decrees numbered 7164 published in the Official Gazette dated 28 February 2019 and numbered 30700