By: AGBI

Turkey must exploit its untapped gold deposits to bridge its trade deficit and meet the nation’s appetite for bullion, the head of the country’s mining association said.  

“While $17 billion was spent on importing 222 tonnes of gold last year, only $2.5 billion worth of gold was produced domestically,” Mehmet Yılmaz, president of the Turkish Miners Association, told AGBI.

Turkey has proven reserves of nearly 6,000 tonnes of gold in the ground, valued at $461 billion at current prices. However, deposits could top 10,000 tonnes if more-advanced surveys were conducted, Yılmaz said.

He called for increased investment in gold mining and sustainable domestic production, saying such steps would significantly reduce Turkey’s trade deficit.

Over the past three decades, Turkey has imported more than 5,000 tonnes of gold. This suggests domestic demand could be met for the coming 30 years or more if the country’s resources were developed.

Gold imports accounted for 22 percent of Turkey’s trade deficit in 2023. But quotas restricted bullion imports, meaning they eased to just under 17 percent of last year’s total of $82 billion, according to Turkstat, the state statistics agency. 

Demand for gold in Turkey is always high. It has traditionally been seen as an investment or asset, gold and money-markets analyst Islam Memiş said. Import quotas have curbed supply and pushed up prices, however.

If domestic production were increased, import restrictions would not be necessary and prices could be driven down, he said. 

“Over the past two decades there has been better vision, better technology and strong appetite to [mine] our assets. But the amounts produced do not match the demand and expectations,” Memiş added. 

The precious metal was fetching around $3,321 per ounce on Wednesday, after reaching its lowest level since August 1.

One challenge facing gold mining is safety, both environmental and in the workplace. 

In recent years, a number of accidents have occurred in Turkish gold mines. One in the eastern province of Erzincan in early 2024 left nine miners dead after a slippage of spoil that also polluted nearby water sources. 

Despite these challenges, mining is gaining regulatory support. 

Yılmaz welcomed legislation passed last month by parliament, saying the move will eliminate barriers to mining expansion.

The legal change will streamline applications for new mining permits on land designated as open for extraction purposes, while easing restrictions on mining in agricultural areas.

The new process is set to cut the timeframe from application to approval from four years to 18 months. It will also open more land for mining and investment.