Türkiye is believed to have a gold mining potential of as much as 6,500 tons, with a significant portion of it yet to be extracted, according to a top industry official who stressed the immense value of untapped resources and their potential to contribute to the economy.
"We know the location of 1,500 tons of this potential and have already started production," Mehmet Yılmaz, head of the Turkish Miners Association (TMD) said. "There are 5,000 tons still waiting underground, valued at approximately $300 billion."
Yılmaz emphasized the potential economic benefits of domestic gold production, particularly in mitigating inflationary pressures.
Gold imports have been one of the main factors fueling Türkiye's foreign trade and current account deficits, which the government has sought to curb through multiple policies spearheaded by aggressive monetary tightening over the past year.
It had also implemented a partial suspension of gold imports in mid-February 2023 and later announced import quotas and additional charge to lower the deficits and rebuild central bank reserves.
Türkiye has a long history of domestic gold ownership in both jewellery and investment form, and is one of the largest gold markets globally.
Stubbornly elevated inflation and depreciation in the Turkish lira fueled demand for gold by households over the recent years. That also prompted a culture of out-of-system savings, often referred to as "under-the-pillow" savings.
Authorities have sought to persuade households to integrate these savings, particularly gold, into the economy, but have so far struggled to develop convincing financial products.
Some $31 billion were spent on gold imports in 2023, compared to just $12 billion in exports, resulting in a $19 billion trade gap. The demand for gold has subsided since after last year's presidential and parliamentary elections.
"When the central bank exercises its preemptive right to purchase the gold we produce, it pays us in lira. This is where the local production has an impact on inflation because otherwise, the gold would have to be bought with dollars," Yılmaz explained.
He was speaking at a meeting with a group of journalists in Ankara.
Inflation reached an annual 75% in May, which is said to mark the peak before rate hikes and a relatively stable lira bring relief.
The mining sector, according to Yılmaz, is in need of regulatory reforms to expedite mining permits and boost production.
Over the past decade, the number of mining exploration licenses has plummeted from 40,000 to 5,000.
Green transition
Discussing the impact of the global green transition, Yılmaz predicted a substantial increase in need and the demand for mined resources.
"The green transition will increase the need for mining ninefold. As we move away from fossil fuels and toward more renewable energy sources, we will need to produce more batteries, store electricity, and manufacture solar panels and wind turbines," he said.
"This translates into a significantly higher demand for industrial and precious metals like lithium, cobalt, nickel, copper, and even gold."
Maximizing value from boron reserves
Yılmaz also addressed Türkiye's position as a global leader in boron, estimated to be holding approximately 70% of the world's reserves of the key material.
He underscored the potential economic benefits of processing boron into high-value end products.
"Instead of selling boron as ore or intermediate products," Yılmaz said, "we can generate significant added value by producing intermediate or finished goods."
"A ton of raw boron is valued between $300 and $500. If processed into intermediate products, the price can rise to $4,000 per ton. By advancing technologies such as glass and armor production domestically, the value of boron could reach $500,000 per ton," Yılmaz noted.
Yılmaz also stressed the importance of establishing independent oversight mechanisms within the mining industry to ensure compliance with safety standards.
He noted that countries adhering to sustainable mining principles have seen a reduction in workplace accidents. "We need clear standards for all stages of mining and a self-regulating, independent auditing system," he urged.