Turkish Mining Sector Had a Very Difficult 2024

Under the motto "Mining is Our Life," Turkey's mining sector, which generates USD 60 billion in added value to the Turkish economy by leveraging the country's underground resources, faced a difficult year in 2024 due to the disinflation policy implemented in Turkey.

Ege Maden İhracat­çıları Birliği Chair İbrahim Alimoğlu stated that the mining sector is not entering 2025 with much optimism due to problems accessing finance, a weak exchange rate, high inflation, and contraction in export markets, and that 2025 is poised to be remembered as another difficult year.

Speaking at the "Mining Sector Meeting" organized by Ege Maden İhracat­çıları Birliği under the sponsorship of Denizli Exporters Association and in cooperation with Denizli Chamber of Industry and Denizli Marble Producers Association, EMİB Chair İbrahim Alimoğlu emphasized that forestry fees and license charges will increase at a revaluation rate announced at 44 percent, and that this will reflect in their costs with increases in the minimum wage.

Alimoğlu said: "While our costs are rising, the exchange rate is not increasing. We support the fight against inflation, but as exporters we want to protect an ecosystem in which we can conduct exports. Currently our exporters are forced to export at cost or at a loss. When the Central Bank of the Republic of Turkey converts foreign currency earned by exporter firms to Turkish lira, it provides a 2 percent margin. We want this margin to be increased to 5 percent."

We filed a lawsuit with the Council of State

"Unfortunately, there have been recent developments that are breaking the sector's back. We are taking care to act together with the sector in response to these developments," Alimoğlu continued as follows:

"The Regulation on the Implementation of Article 16 of the Forestry Law, published in the Official Gazette on 4 September 2024, introduced regulations that significantly restricted mining activities. In response to this application, we filed our nullification lawsuit with the Council of State together with relevant NGOs. To bring a mining operation into operation, we must obtain permits from 24 different institutions and organizations under requirements of 8 ministries, 7 laws, 87 regulations, 8 decrees, and 16 international agreements. One of these is forest permits. We have serious concerns that with the Regulation on the Implementation of Article 16 of the Forestry Law, license security will be eliminated and the sector could reach the point of disappearing."

Memişoğlu: "We will close 2024 with USD 4.4 billion in exports"

Denizli Exporters Association Chair Hüseyin Memişoğlu shared that they achieved USD 4.2 billion in exports in 2023 and will close 2024 with an increase to USD 4.4 billion in exports. Memişoğlu said: "I congratulate our exporters. Because you are conducting exports with these exchange rates without making money. When we talk to our ministers, they say 'Exports are increasing.' Exports are increasing, but we are selling at cost or at a loss. We hope that soon we all win the battle against exchange-rate-indexed inflation and gain access to exchange rates that allow us to export."

Memişoğlu, noting that Denizli has sectoral wealth in exports and is the 9th province with the highest exports in Turkey, said: "Our export target for Denizli in 2025 will be USD 4.7 billion. We are a leading position nationwide in processed natural stone exports. We exported USD 213 million of processed natural stone in 2023 and USD 220 million as of 15 December 2024."

Memişoğlu, mentioning that Turkish Trade Bank, which will provide financial support to exporters, has begun operations with 4 branches, shared information that Turkish Trade Bank will open a branch under Denizli Exporters Association in the near future.

Kasapoğlu: "While Denizli's exports have not declined, profitability is gone"

Denizli Chamber of Industry Chair Selim Kasapoğlu stated that although Denizli's exports did not decline in 2024, export profitability was lost, and 2024 was a year in which some industrialists and exporters in Denizli ended up in deficit.

"Turkey has been, as you know, fighting to pull inflation down through disinflation policies for some time. Of course, this is an important fight," Kasapoğlu said. "If we are complaining about why today there are problems in Turkey's economy and production, first of all the solution requires bringing inflation down, and of course the business world has supported this process until now. However, as we enter 2025 at the point we have reached today, what we are expressing is this: alongside exchange rate policies, production, employment, and export policies also need to be implemented.

Because starting in January there will be a new regulation on the minimum wage. Our labor costs will increase. Pressure continues on the exchange rate. This is a sign that we will enter a difficult period in 2025. Interest rates may begin to fall by December and January. And in my view, it may take until June and July for interest rate cuts to have meaningful impact on production for us. Therefore, we can say that the first 6 months of 2025 will involve a difficult period for us."

Incentive package for labor-intensive sectors will provide relief

Speaking also about expectations that a new incentive package will be announced for labor-intensive sectors including textile, ready-to-wear apparel, and furniture sectors that have appeared in media coverage, Kasapoğlu expressed that these incentive packages will support industrialists and exporters and provide relief.

In the session moderated by Ege İhracat­çı Birlikleri General Secretary İ. Cumhur İşbırakmaz, Turkish Eximbank Aegean Region Director Gülom Timurhan, Turkish Trade Bank Deputy General Manager Ahmet Zafer Seyar, and İGE A.Ş. Deputy General Manager Yiğit Alp Akdaş conveyed the financial resources they provide to exporters. In the second session moderated by journalist İrfan Atasoy, Denizli Chamber of Industry Vice Chair Mehmet Serter and Denizli Exporters Association Board Member Celil Kılınç were speakers.

Within the scope of the "Mining Sector Meeting," Ege Maden İhracat­çıları Birliği Chair İbrahim Alimoğlu and his accompanying delegation visited Denizli Governor Ömer Faruk Coşkun and Denizli Metropolitan Municipality Mayor Bülent Nuri Çavuşoğlu in their offices.

Ege Maden İhracat­çıları Birliği will hold the second "Mining Sector Meeting" on Wednesday, 25 December 2024 at 15:00 under the sponsorship of Muğla Chamber of Commerce and Industry.