Turkey to embrace new opportunities in bauxite development
----Interview with Yucel Unver
Marketing General Manager
Turkey Laman Mining Co.
Turkey Laman Mining Co., a 100% foreign-owned mining company, is one of the subsidiaries of Bros Industry Holding Inc., who has branches in 5 different countries. The company operates, produces and exports base metals, rare metals, secondary materials and platinum group metals in various regions in Turkey. Bros Industry Holding Inc. acquired MGH Mining Enterprise Co. in June 2023 and started its mine business in the name of Laman Mining Co.
Asian Metal: Welcome to the interview by Asian Metal Yucel. Please introduce your company's main business briefly at first.
Yucel Unver: Thank you for your invitation. Laman Mining has been one of the top 5 Turkish bauxite processors and exporters since 2018. We have 4 bauxite mining facilities which is located in Milas-Mugla, Sarkikaraagac-Isparta and Iskenderun, Turkey. The annual processing capacity now reaches 500,000t and we are targeting 1 million tonnes by the middle of 2024. We plan to complete exploration of the new bauxite mining fields in Isparta region and start processing operations at the beginning of 2024. We mainly export to Europe and the US.
Asian Metal: According to the data from China Customs, China imported around 600,000t of bauxite from Turkey in 2022, up by around 100% YoY, while the figure has surpassed 900,000t in H1 this year. What are the reasons for the increase? What are the main advantages of Turkish bauxite and what is your expectation for 2024?
Yucel Unver: Turkey has high grade monohydrate bauxite Al2O3 55%min SiO2 5%max, which is more competitive for alumina refineries in China. The monohydrate bauxite is suitable for alumina refineries who are equipped with high-temperature alumina production lines. In addition, we don't have any problems with the political environment in Turkey and actually Turkish export policy is strongly supportive, namely there is no export duty and the country does not restrict bauxite export like Indonesia. Besides, the bauxite reserve in Turkey is also very abundant. Our company's Sarkikaraagac-Isparta bauxite resources is one of top 5 bauxite deposits in Turkey. The previous exploration reports by Turkish government show that Turkey's bauxite reserve records over 20 million tonnes. Given the improving demand from China, I think Turkey might export no less than 1.5 million tonnes of bauxite to China in 2024.
Asian Metal: What challenges does the Turkish bauxite industry face and how do you anticipate the production in 2023?
Yucel Unver: At first, the inflation in Turkey has reached around 60% and we are facing increased cost of labor, logistics and facilities, etc. In addition, mining licenses approval and logistics are also challenges. Besides, attacked by the earthquake in February, the bauxite production near Iskenderun would reduce by around 40% this year as most producers cut production for labor shortage and logistics block. We restarted operation as of June, around 3 months delay, but the production remains not stable now and we may lose around 300,000t of bauxite production this year. I estimate an output of about 1-1.5 million tonnes of bauxite in Turkey this year.
Asian Metal: Many Chinese buyers reflect that Turkish bauxite has the content of TiO2 as high as 6% while most buyers prefer to consume the material with TiO2 content lower than 3%. Can you solve the issue technically?
Yucel Unver: The issue exists geographically and cannot be solved technically. However, the bauxite resources in west Turkey has low TiO2 content, like our new mining area in Isparta.
Asian Metal: What is your idea on bauxite export prices in Turkey now? What is your outlook for the price in Q4 of 2023? How do you think of the market demand and price in the US?
Yucel Unver: The current best sales price for Turkish bauxite Al2O3 55%min SiO2 5%max keeps at around USD30/dt FOB Turkey. I think prices will keep at USD30-33/dt FOB Turkey in Q4 this year. As I explained, bauxite processing and delivery cost increased. The demand from the US cement market requests around 200,000t of bauxite this year, similar to last year. The price for Turkish bauxite Al2O3 50%min used for cement production remains stable at around USD27/dt FOB Turkey right now.
Asian Metal: Alumina prices from China kept going down from early this year and many inland alumina producers suffered losses. Will Chinese alumina refineries stop using imported bauxite? What are the reasons?
Yucel Unver: China is the biggest consumer of bauxite in the world. In the Bauxite Summit organized by Asian Metal in May, we met many alumina refineries, who told us they will continue importing bauxite. Turkish bauxite is better in grade, so they will mix domestic bauxite with Turkish bauxite for production.
Asian Metal: When will you start bauxite export to China and what is the target?
Yucel Unver: We plan to start exporting bauxite to China from early 2024 and will try to export around 1 million tonnes.
Asian Metal: Finally, wish a new breakthrough with your bauxite mining and exports.
