Coal production in Turkey

History

The discovery of first coal reserves in Ottoman Empire dates back to 1731, when lignite reserves were discovered in Sarajevo by Humbaracı Ahmet Pasha (formerly known as Claude Alexandre Comte de Bonneval, before converting to Islam).¹ Large scale, continuous production of coal, on the other hand, started between 1835 and 1839, in the Ereğli Basin in Zonguldak. Although there are different accounts on who discovered the hard coal reserves in Ereğli (Hacı İsmail or Uzun Mehmet), there is an overwhelming consensus on the reason why coal production started in Ottoman Empire: Improving energy supply security by curbing dependency on coal imports from the UK, in the face of increasing domestic demand triggered by increasing use of steam engines especially by the Ottoman navy.²

Ereğli and Zonguldak became the epicenter of hard coal and therefore energy production across the Balkans, Anatolia and Middle East. The control of coal production in Ereğli was a contentious issue among Italy and France during the allied forces’ preparations for the Treaty of Sevres. Turkish Grand National Assembly that was established in 1920 attached importance to coal production in the region, as well. “Amele Kanunu” that was introduced in 1921 in order to improve rights of miners in the region was the first labor law of the Republic of Turkey. Zonguldak, once a borough of Ereğli was upgraded to a district in 1920 and province in 1924. Upon the foundation of the modern Republic of Turkey, utilizing hard coal reserves in Zonguldak received significant attention.³ From 1923 until 1967, there has been a steady increase in hard coal production in the region, with the exception of the World War II period. 

Lignite production began in Balıkesir, in 1899. Although it is reported that lignite had been used for heating purposes for quite a few decades across the Ottoman land, its rise to some prominence started during WWI. As the hard coal production in Ereğli proved insufficient to meet the increased demand in war conditions, lignite production began to be considered as an alternative fuel. Until 1936, Soma, Ergene, Merzifon, Değirmisaz and Tavşanlı were among the important lignite producing regions. After 1936, nationalization of lignite fields began and in 1940, liginite assets were consolidated under Western Lignite Enterprise (Garb Linyitleri İşletme Müessesesi – GELİ).

Nationalization of lignite assets were actually preceded by the hard coal sector, when the hard coal assets in Zonguldak were transferred to Etibank (Etibank Ereğli Coal Enterprise – EKİTAŞ) in 1937.⁴ In 1957, Turkish Coal Enterprise (TKİ-Türkiye Kömür İşletmeleri) was founded, and the assets of both GELİ and EKİTAŞ were transferred to TKİ.⁵  

Hard coal production in Turkey peaked in 1967 and has been in a slow but steady decline ever since. In 2020, production fell below 1 million tonnes, down to 990 thousand tonnes. In the meantime, asphaltite production in South-Eastern Turkey took off, and there have been significant increases in lignite production across the country. In 2021, saleable coal production in Turkey reached 74 million tonnes in total, of which 72,81 million tonnes were lignite and asphaltite and 1.24 million tonnes were hard coal. Compared to the previous year, saleable coal production decreased by 0.67 million tonnes and remained almost the same (TKİ Coal Sector Report 2021).

Lignite production displayed an upward trend between 1970 and 1998, and two V-shaped decline and recovery periods since 2000. According to Turkish Coal Enterprise (TKI), pause in coal production in Afşin-Elbistan due to the landslides in 2011, insufficient levels of new investments in the sector and increase in production costs as a result of the legislative changes introduced after the mining disasters in 2014 and 2015 are the main causes of decline in lignite production between 2011 and 2015. The reason for the decline in 2020 is explained by the Covid-19 pandemic.

Legislative changes that were introduced to decrease costs arguably led to a recovery in lignite production. From 2015 until 2018, lignite production in Turkey increased by 44%. As of 2020, Turkey is the third largest lignite producer in the world, following Germany and Russia. In 2019, it ranked 11th in the world in total coal production, regardless of type. Despite the top position of the country in production, its imports have reached high figures as well. With 36 million tonnes of coal imports in 2021, Turkey follows Germany who is the largest coal importer outside of the Asia Pacific region.

Coal reserves

Most of Turkey’s hard coal deposits are located in Zonguldak basin. Coal is extracted in Amasra, Armutçuk, Kozlu, Üzülmez and Karadon regions in the basin. As of 2022 the total capacity of the identified geological hardcoal reserves is 1.511 billion tonnes. Visible reserve capacity stands at 725 million tonnes. The latest reserve composition is shown at the below table:

Source: TKİ, Kömür Sektörü Raporu 2021 

Turkey’s lignite reserves stand at 19.32 billion tonnes, as of 2019. In BP statistics, Turkey’s proven exploitable lignite reserves are stated as 10.98 billion tonnes in 2021. Until 2005, total lignite reserves in the country was estimated to be 8.3 billion tonnes. Most of these reserves had been identified as a result of the exploration work carried out between 1976-1990. The second wave of coal explorations began in 2005, eventually culminating in the discovery of almost 11 billion tonnes of new reserves. Between 2015 and 2019 only, lignite reserves have increased by 24%, from 15.6 billion tons to 19.32 billion tonnes.  

Karapınar-Ayrancı, Eskişehir-Alpu, Afyon-Dinar, Tekirdağ-Malkara and İstanbul-Silivri highlight the list of new lignite.

Current hotspots

New reserve areas in Çayırhan 2, Eskişehir-Alpu, Afşin-Elbistan, Tekirdağ-Malkara, Tekirdağ-Çerkezköy, Konya-Karapınar and Afyonkarahisar-Dinar are priority hotspots for the expansion of coal capacity and utilization in Turkey. 

Towards this end, the government has adopted a new tender mechanism based on transfer of coal reserves to the private sector with the obligation of building and operating coal-fired power plants in the vicinity. The mechanism includes incentives such as a 15-20 year-long power purchase guarantee, completed expropriation, EIA and zoning permit procedures by EÜAŞ, up to 35 years of operating rights and exemption from carbon taxes or any other fee of that sort.  

The tender for the Çayırhan-B Project was contracted on July 11th, 2017 at US$6.04 cents/kWh. The tender for Eskişehir-Alpu was postponed for six times, and eventually cancelled in June 2019. The EIA process for Tekirdağ-Çerkezköy has been ended by the Ministry of Environment and Urbanization in early 2019. 

While the medium term target is to increase the capacity of domestic coal-fired power plants to 20 GW, the fields that are planned to be tendered in the initial round of reverse-auctions bear 5.9 GW of installed generation capacity potential. Due to reasons such as the slowdown in the economy and the objections of the local people against coal power plants, the future of many of the following tenders, which are included in the guides prepared by the Ministry of Energy for investors, are also uncertain.

	Total reserves (million tons)	Planned installed capacity (MW)
Eskişehir – Alpu	568	1100
Konya – Karapınar	427	1000
Afyon – Dinar	941	1000
Afşin – Elbistan C&D	949	1800
Tekirdağ – Malkara	618	1000

Table: Priority new coal regions. Source: Investor’s Guide for Electricity Sector in Turkey – 2nd Edition, Ministry of Energy and Natural Resources 

Coal imports

Turkey was the 7th largest coal importer in the world. Annual imports reached 10 million tons in the 1990s, rose above 30 million tons after 2010 and reached 35.92 million tonnes in 2022 according to TURKSTAT, 37.62 million tonnes according to MTA. In 2021, the coal import bill was $4.6 billion. In 2022, with the effect of the price increase, this figure reached $9 billion.

Coal imports (million tons)	2016	2017	2018 (tahmini)
China	282	284,3	295,5
India	192,1	209,4	240,2
Japan	185,9	187	185,1
Korea	134,5	138,9	142
Chinese Taipei	65,6	67,6	66,5
Germany	57,8	50,5	44,4
Turkey	36,2	38,3	38,3
Malaysia	27,2	30,4	33
Russian Federation	24	29	28,2
Thailand	22,6	23,5	24,9

Major coal importing countries, 2016-2018. Source: IEA Coal Information 2019

Coal Production and Imports in Turkey 1990 – 2020, Source: Energy Balance Sheets of the Ministry of Energy and Natural Resources

Turkey’s lignite and asphaltite supply is met by domestic production. It is known that the biggest reason for the increase in the amount of imported coal is electricity generation, in other words, thermal power plants operating with imported hard coal. Coal imports, which reached 40.78 million tonnes in 2020, decreased slightly in 2022 and remained at 37.62 million tonnes (MTA data via TKİ Coal Sector Report 2022). TKİ (Turkish Coal Enterprises) emphasises that the most significant increase in coal imports is the demand for electricity generation, and estimates that this trend will continue.

Share of imports in Turkey’s hard coal supply, 1990 – 2020. Source: Energy Balance Sheets of the Ministry of Energy and Natural Resources

Sources and magnitude of coal imports 

Indonesia, Australia, Russia, USA, Colombia and South Africa are the six major coal exporters in the world. In 2019, their combined exports accounted for almost  91% of total global exports. Russia and Columbia are two largest sources for Turkey’s coal imports, with respective shares of 54.1% and 29.2%. Australia follows these two countries with a share of 8.3%. The USA, Canada, South Africa and Kazakhstan are the other countries from which Turkey imports coal. Russia’s share in Turkey’s coal imports was 38% before the Ukraine-Russia war. After the war, Turkey’s coal imports from Russia increased due to more favourable prices, while the share of other countries decreased.

Turkey’s coal imports have increased steadily since the early 2000s, although they have declined in some years. Although the amount paid for imported coal varies depending on energy prices, it has remained above $4 billion since 2016. In 2022, it broke a record by reaching $9 billion.

Magnitude and cost of Turkey’s hard coal imports, 2015-2019. Source: TURKSTAT Foreign Trade Database

Employment

As of 2020, 36 thousand people are employed in hard coal and lignite production. While the number of employees in the hard coal and lignite industry decreased from 2011 to 2019, it remained stable in 2019 and 2020. The number was the same in the last two years but there was a decrease in the employment rate in the public sector, against an increase in the private sector. Back in 1975, employment in the coal sector was 59,000. This figure has decreased to 48,000 in 1998, and to 36,000 in 2020.

Employment in hard coal and lignite sectors 2010 – 2020. Data source

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^1,2,3,4,5 Ediger, Volkan Ş., TKİ ve Kömürün Tarihcesi ile Türkiye Kömür Stratejileri. TKİ Kurumu Yayınları, 2015.