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 entered a slow but steady decline since then. In the meantime, asphaltite production in South Eastern Turkey took off, and there has been significant increases in lignite production across the country. As of 2018, annual production figures for hard coal, asphaltite and lignite are 1.1 million tonnes, 1.75 million tonnes and 81 million tonnes, respectively.  

While hard coal production peaked in the 1970s and entered a steady period of decline, lignite production has displayed an upward trend between 1970 and 1998, and two V-shaped decline and recovery periods since 2000. According to Turkish Coal Enterprise, 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

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 2019, Turkey is the second largest lignite producer in the world, following Germany. 

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. Between 2015 and 2018, total hard coal reserves have increased by 16%, from 1.3 billion tons to 1.5 billion tons. Visible reserves stand at 730 million tons. The latest reserve composition is as follows:

Reserve type Non-coking coal Semi-coking coal Coking coal TOTAL(thousand tons
Amasra A Amasra B Armutçuk Kozlu Üzülmez Karadon
Ready 420 1764 3411 305 1758 7658
Visible 5596 395955 1827 62676 133528 130511 735893
Probable 2176 151162 11089 94342 94342 159162 461789
Possible 7758 58813 5886 74020 74020 117034 313483
TOTAL 15950 605929 20565 302195 302195 408465 1518823

Source: Türkiye Taşkömürü İşletmeleri 2018 Taşkömürü Raporu 

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

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.

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 is the 7th largest coal importer in the world. 

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 – 2018, Source: Energy Balance Sheets of the Ministry of Energy and Natural Resources

Lignite and asphaltite supply in the country is met exclusively by domestic production. On the other hand, share of imports in hard coal supply has increased from 67% to 97% between 1990 and 2018, arguably due to the increase in imported coal-fired power plant capacity and the decline in hard coal production in Zonguldak basin. 

Share of imports in Turkey’s hard coal supply, 1990 – 2018. 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 2018, their combined exports accounted for almost 90% of total global exports. Colombia and Russia are two largest sources for Turkey’s coal imports, with respective shares of 36.4% and 36.2%. The USA follows those two countries with a share of 13.9%. South Africa, Australia and Canada are other noteworthy import destinations. 

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

Employment

As of 2018, 35.000 people are employed in hard coal and lignite production. Since 2010, total production of lignite and hard coal has increased by 14%, but employment has declined by 28%. Arguably, this has been the continuation of a long term decline in the sector. Back in 1975, employment in the coal sector was 59.000. This figure has decreased to 48.000 in 1998, and to 35.000 in 2018

Employment in hard coal and lignite sectors 2010 – 2018. Data source


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