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Turkish government to transfer 203 million mt of coal reserves to private owners

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Turkish government to transfer 203 million mt of coal reserves to private owners

Highlights

Total reserves include hard and lignite coal

Domestic production could cut import demand

Istanbul — Turkey has transferred seven coal fields to private sector operators for development, Turkey's energy ministry announced via its Internet site.

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According to the announcement, the seven fields hold a total of 203 million mt of reserves, consisting of three hard coal fields capable of together producing an additional 3 million mt/year of hard coal and four lignite fields with the potential to produce an additional 15.6 million mt/year of lignite.

The announcement stated that the intention of transferring the fields is to substitute the coal produced for some of the imported coal currently used by power plants, with the aim of reducing Turkey's current account deficit.

Turkey's former energy minister, now finance minister, Berat Albayrak announced last year that his government was planning for power plant burning imported coal to switch to locally produced coal.

As yet Turkish officials have not indicated how coal from Turkey's domestic fields, which are mostly far inland, will be transported to the plant burning imported coal, which are all located on coastal sites.

Turkey currently has eleven operational power plant burning imported coal totalling 8.79 GW, with a further five projects totalling 2.69 GW holding full generating licenses, and one 800 MW plant holding a pre license.

IMPORTS COULD BE CUT

The ministry stated that Turkey imported 37 million mt of coal in 2017, at a cost of around $4 billion, and that the production from the newly privatized fields would reduce the volume of imports by about half.

The four lignite fields were reported as having been transferred from Turkey's state lignite mining company Turkiye Komur Isletmesi (TKI) to Turkish mining group Imbat Madencilik, Fernas holding, Demir Export, a subsidiary of Turkey's Koc Holding, and construction group Yapi Tek for periods of between 25-30 years.

The three hard coal fields were reported as having been transferred from Turkey's state owned hard coal mining company Turkiye Taskomur Kurumu (TTK) to Erdemir Madencilik, a subsidiary of Turkey's autonomous military pension scheme Oyak, Tumas, a subsidiary of Turkey's Bereket Holding, and Turkish energy company Emsa Enerji. No information of the length of operation was given.

Turkey's energy ministry did not respond to a request for further information on which fields had been transferred, or on the reserves and quality of coal they hold.

An official from Yapi Tek confirmed in an interview that the company has taken over the Kutahya Tavsanli field, which holds coal with a calorific value of 2,000 kcal/kg and which has previously been in production but is currently not producing. The field has lignite reserves of 24.75 million mt, of which they expect to extract up to 1.8 million mt/year, the official said. The company's lease is for 18 years, of which the first three will be used for site preparation.

Imbat confirmed that they had taken on the Inez lignite field which is currently not in production, but were unable to confirm the quality of coal or reserves it contains, while Fernas confirmed that they have taken over development of the currently non producing Manisa field which contains lignite with a calorific value of 3,000 kcal/kg.

Reports in the Turkish media Friday stated that Tumas have taken over operation of the Inagz Baglik hard coal field in Zonguldag, which holds reserves of 136 million mt, and from which it will produce around 2.5 million mt/year

Officials from Demir Export did not respond to requests for further information while officials from Erdemir Madencilik and Ensa Enerji were unavailable.

--David O'Byrne, newsdesk@spglobal.com

--Edited by James Leech, james.leech@spglobal.com