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Boron in Turkey: between myth and reality.

Turkey's geographical location on the trade routes, adjacent to energy resources, and its emergence as an energy transit corridor, have made Turkey an attractive center for the investment of international capital. Turkey contains 72% of the world's boron reserves, which are concentrated in eight countries in the world; the USA and Russia have the next largest deposits. Boron, with its various applications and diverse product range, is an essential raw material in most industries. 85% of it is consumed in glass, fiberglass, insulating glass, detergent, ceramics and agriculture, with a total consumption of 3,500,000 metric tons (1,800,000 ton B2O3) per annum around the world. Turkey, with the Eti Maden, a wholly state-owned company, has become the leader in the boron business not only in terms of its reserves but also in production, sales and profitability since 2005. The primary target now is to make Turkey, the leader of world boron business, and an emerging terminal where energy lines intersect, a production base in the sectors identified in growth strategies.

Global Economic Developments in Relation to Turkey

International capital, which has displayed a movement beyond the expected level, has recently been directed towards developing countries. One reason behind this shift in orientation is the economic potential of these countries; the other reason is their sound efforts toward achieving political and economical stability. During the 2006-2010 period, the buoyancy of the world economy is expected to continue. Developed countries, developing countries, and the world economy at large are expected to grow annually, on average, by 2.9%, 5.8%, and 4.3%, respectively.

After the economic crisis of 2001 occurred in Turkey, important structural reforms were carried in order to strengthen the financial structure and ensure economic stability. Subsequently, a sequence of further reforms in the fields of politics and law have been carried out as part of the process of Turkish accession to the European Union. As a result of these structural reforms, inflation declined to single-digit numbers, the budget deficit decreased to less than 3% of the GDP, and the national economy boomed 7% on annual average. Further, in order to protect the economy from political interferences, independence has been provided to the Central Bank, the privatization process of state-owned enterprises has been accelerated, competition policies have been empowered and the legal system has been improved. Foreign direct investment, which is important for stable growth in Turkey, started to increase with the achievement of macroeconomic stability and progress towards membership in the European Union. Annual foreign direct investment (FDI) inflows were a paltry $1 billion or less until 2004. They ballooned to $9 billion in 2005 and $20 billion in 2006. This figure is more than India received that year. Besides the efforts toward achieving economic stability in Turkey, special attention was paid to the improvement of the investment environment. Regulations were introduced to eliminate the administrative obstacles that had previously been encountered in realizing investments, and investment procedures were streamlined through the reduction of red tape.

Mining and New Turkish Economy

In assessing the industrialization process of developed countries, the mining industry is of great importance due its direct contribution to the economy, and because it is a primary feeding input supplier of other industries, especially the manufacturing industry. The main aim of the mining industry is to contribute mineral resources and value-added products to the economy, and to meet the raw material requirements of the energy and manufacturing industries in secure and economical ways.

The share of mining sector is 4% of GDP in developed countries, and the world average is about 2%. In Turkey, the share of the mining sector accounts for about $2.6 billlion U.S. dollars in GDP, which corresponds to about 2% of GDP. In order to increase this figure to the level of developed countries, it is projected that the mining sector share about $US 8-10 billion from GDP in 2010. In this framework, Turkey's main goal in the sector is to promote the country to a position where it can play a key role in the global market by producing high value-added finished products, and by integrating the mining industry with the rest of Turkey's industries, instead of remaining a country which produces the mines and sells their output as raw materials.

Boron Minerals in Turkey

Turkey is rich in mineral diversity and its mining activities go back to ancient ages. It is known that copper, gold, iron, mercury, tin and other minerals were mined and processed by various civilizations such as the Assyrian, Phoenian, Hittite, Roman and Ottoman in Anatolia (modern Turkey). Due to its geological formation, the country has a significant mineral diversity and is rich in mineral resources. With its significant reserves of boron, marble, thorium, trona, zeolite, and pumice, the country also ranks at the top of the world for its mineral reserves of chromite, feldspar, barite, clay, coal, gold and silver. Turkey hosts 2.5% of the world's industrial minerals, 72% of its boron reserves and 50% of its perlite resources. In short, Turkey can be categorized as one of lucky countries in terms of mineral potential, relative to its land area and population. Today, over 50 mineral types containing boron, copper, zink, silver, magnezite, feldspar, kaoline and various clays have been produced in the country.

What is Boron and Why is It Important?

Boron minerals are natural compounds which contain different amounts of boron oxide ([B.sub.2][O.sub.3]) in their structures. More than 230 different types of boron minerals are known in nature, but the number having commercial importance is limited to the following: tincal, colemanite, kernite, ulexite, pandermite, boracite, szaibelyite and hydroboracite. Commonly existing boron minerals in Turkey are tincal, colemanite and ulexite. These minerals are sodium-, calcium- and sodium+calcium-based minerals respectively. These minerals are primarily processed physically to promote enrichment (concentration), and then changed into various boron chemicals by refining. All these products are defined as "boron" in laymen's terms. Boron is consumed commonly as boron chemicals in end-use applications, but it can be directly consumed as concentrate in some applications as well.

Boron products have a wide range of application, and are commonly used in such areas as space and aviation vehicles, nuclear applications, armoured vehicles, fuel systems, electronics, agriculture, the glass industry, the chemistry and detergent sector, ceramics and polymeric materials, nanotechnologies, the automotive and energy sector, metallurgy and construction. But the main consumption of boron products is concentrated in glass, ceramics-glazes, agriculture and the detergent sectors, which together account for 85% of boron's total consumption. The world's total consumption is about 3.500.000 tpy in product base (1.800.000 tpy, [B.sub.2][O.sub.3] base).

Boron reserves exist in eight countries, the most notable reserves being located in Turkey, the USA, and Russia. Turkey has the largest boron reserves, enjoying a 72% share of the world's total. Considering the world's boron reserves and the current consumption rate, it is projected that there will be no shortage of boron minerals for many long years (about 500, according to most estimates). Boron is produced in a number of countries but Turkey and the USA play the most important role in the boron products market. Turkey and US Borax supply about 70-75% percent of the world's boron demand.

Boron Mining in Turkey

Eti Maden was founded in 1935 with title of Etibank in order to bring the country's mines (coal, iron-steel, aluminum, copper, chromite, silver etc.) into the economy. At the beginning of 1998 it was restructured and changed its name to Eti Holding A.S. Today the company continues its principle business of boron as Eti Mine Works General Management. Eti Mine processes and markets the boron minerals commonly found in Turkey, namely tincal, colemanite and ulexite at the following facilities; Emet-Kutahya, Kirka-Eskisehir, Bandirma-Balikesir, Bigadic-Balikesir and Kestelek-Bursa.

Recently, growth in the Asian boron market led Turkey to accelerate its establishment of marketing organization in this emerging region. To this end, marketing companies were set up in Russia and China to manage boron sales to Asian and Russian markets in consistence with the goal of the company. A respectable increase in productivity and a corresponding reduction in costs were accomplished as a result of R&D studies, improvement in processes, and the implementation of modern operation practices. Turkey's long-established understanding of the process of producing saleable boron chemicals and their equivalents, and its conformance to international quality norms started yielding results: Turkey recorded its highest level of production and sales in 2006.

In line with the growth trend which began in 2003, the production and sales of Turkish boron products reached the highest level of all time (including the period when Eti Maden was processing and marketing copper, aluminum, chromite, silver, barite, and other minerals) in 2006. Sales volume reached 1.4 million tons, while sales revenue increased to the level of $400 million. Increasing the exported share of high-value-added boron chemicals and their equivalents, while decreasing the share of concentrated boron products, has played an important role in the achievement of such sound results.

Turkey increased itsmarket share to 38% and 36% in terms of quantity and sales revenue respectively in 2006, from their prior levels of 24% in 2002. Turkey aims to increase its sales revenue to $600 million USD (a 50% market share) at the end of the next three years, and to $800 million USD at the end of the following three years.

For the development of its high-value-added specialty boron chemicals industry, Turkey plans to offer long-term contracts in order to encourage domestic and foreign private investors, who will transfer technology to produce boron specialty chemicals and high quality boron products at competitive prices.

Growth Axes of Eti Maden and Sectors Targeted for Development

The new vision is to make Turkey the world's boron center by sustaining stable growth in conventional boron chemicals and by pioneering the construction of boron-based industry, primarily high-value-added specialty boron chemicals. Turkey can finance investments in conventional boron chemicals by own-capital with its strong financial structure. Turkey endeavors to be a regional production base for sectors with growth potential, such as fiberglass (isolation, textile type), ceramics, detergent and fertilizer. In such cases, investors will have about 30% cost advantages (as raw material supply and transportation).

Sectors targeted to be Turkish production bases:

(1) The glass industry (fiberglass, insulating fiberglass, panel glass and borosilicate glasses) is the most boron-consuming sector, and ceramics-glaze follows it. The volume of the world's insulating fiberglass sector is estimated to account for about $10 billion USD. Depending on the increase in energy prices, the importance of the insulating fiberglass sector is increasing and it is estimated that this trend will continue. Therefore, insulating fiberglass will be consumed more in regions that have either hot or cold climates. Turkey has a logistic advantage due to its adjacency to Southern and Northern regions where insulation is required. Today, the increase in world energy prices, the tendency toward closer cooperation among regions, easy access to markets, the existence of a safe raw material supply, and price advantages will lure investors interested in insulating fiberglas to Turkey. Consequently Turkey will be an effective player in this area.

Textile grade fiberglass is characterised by its high tensile and impact strength, high resistance to chemical attack, light weight and low cost. These properties make it ideal for use as a reinforcement material in plastics and composits. These high strength plastics and composits are also finding increased use in place of metals and alloys. The world's textile grade fiberglas market is reported at more than 3.5 million tons in recent years.

Because of increasingly high energy costs, countries around the globe will pay attention to sun collectors either as an alternative to tradional energy resources or for heating purposes. In line with this trend, the borosilicate glass industry is expected to develop. Turkey is in an advantegous position in this area due to its infrastructure, abundant raw materials, and high-quality human resources.

The glass industry which supplies input to building, automotive, beverage, food, home appliances, furniture, pharmacy, electrical and electronics etc. is an important sector. Boron oxide ([B203) is a crucial component in most glasses, especially borosilicate glasses, and insulating grade and textile grade fiberglasses. Much of the boron chemical consumption in the glass industry is concentrated in these three products. World consumption of these three types of glasses (insulating fiberglas, textile fiberglass and borosilicate glasses) is 975.000 ton B2O3, which means a 55% share of the world's total boron consumption.

(2) The most widely used bleaching agents in the world detergent industry are sodium perborate and sodium percarbonate. Even though the amount of sodium perborate used in the detergent industry has declined in keeping with the decline in consumption in European countries, it is expected that the consumption of perborate-based detergents will increase in the under developing and developing countries in the North, South and East regions of Turkey. Turkey is a safe suplier of the raw materials (boron and soda) required for the production of sodium perborate and sodium percarbonate.

(3) Boron compounds are used in agriculture as micronutrients, herbicides, pesticides and algaecides. Boron micronutrients are used in soils with boron deficiency. If plants do not take in enough boron from the soil they can not absorb phosphorus, cloride and rubidium and fail to use phosphorus and potasium. In Spain, the application of 20-30 gr per tree of borate fertiliser has been reported to double or triple the yields from olive trees growing in calcerous soils. Studies carried out on boron fertiliser in recent years in Turkey have shown that efficiency has increased 35% in wheat, 15% sugar in beets, 22% in chives, 30% in clover, 18% in tomatoes and 19% in hazelnuts. Given this framework, studies have been continued to prepare a soil boron map of Turkey with the aim of determining the boron content of its soil.

(4) Boron usage in the iron-steel sector is foreseen to be a growing market. Colemanite has been used in the sector, as an alternative to floride, as slag floater. In steel making, colemanite and a little amount of ulexite have been used as flux in the USA, Canada, and Japan as an alternative to floride.

Conclusion and Assessment

Turkey has become the leader in the world boron business in recent years by making significant changes in its management approach, principally in its production and marketing policies. It is making great effort to develop a new management model where decision making processes are improved to sustain growth by responding to the fast changes in market dynamics.

Turkey aims to be a production base for businesses which consume significant amounts of boron in the form of fiberglass (insulating glass+textile), optic glass, detergent, ceramics and agriculture. Turkey has significant advantages in these business areas in terms of its qualified workforce, infrastructure, and rich sources of raw materials.

The Turkish boron industry is open to joint ventures in the production of high-value-added boron specialties, as well as fiberglass (insulating glass+textile), optic glass, detergent, ceramics and agriculture. This openness promises an important growth potential which will, in turn, give momentum to the country's mining sector. Turkey is well positioned to accomplish its target of increased growth in accordance with its vision for the boron business.

Orhan Yilmaz, Chairman and General Manager, Eti Mine Works General Management.
Sectoral distribution of world boron consumption (2005)


                        (Thousand ton-
                          [B.sub.2]     Share
Application Area         [O.sub.3])       %

Insulation fiberglass        440        24,4
Textile fiberglass           370        20,6
Borosilicate glass           165         9,2
Ceramics-galze               350        19,4
Agriculture                  120         6,7
Detergents                    95         5,3
Other                        260        14,4
Total                      1.800         100

Source: Roskill, The Economics of Boron, 2006.


       Thousand ton

2002       436
2003       518
2004       715
2005       923
2006       1.021
2007       1.063

Note: Table made from bar graph.


       $US Million

2002       186
2003       177
2004       252
2005       299
2006       367
2007       378

Note: Table made from bar graph.
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Author:Yilmaz, Orhan
Publication:Insight Turkey
Geographic Code:7TURK
Date:Oct 1, 2007
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