REPUBLIC OF TURKEY PRIME MINISTRY Investment Support and Promotion Agency of Turkey ( ISPAT )

1. REPUBLIC OF TURKEY PRIME MINISTRY Investment Support and Promotion Agency of Turkey (ISPAT) TurkishMining Industry

2. AGENDA The Agency Overview of Turkish Mining Industry Deep Dive on Priority Minerals of Turkish Mining Industry New Incentive Regime

3. Investment Support and Promotion Agency of Turkey (ISPAT)

4. ISPAT • ISPAT • Attached to the Prime Ministry and reports directly to the Prime Minister • Private sector approach • Result oriented • Multi-lingual, professional and dedicated project directors • ONE STOP SHOP • 2 offices (Ankara – Istanbul) • Establishment of the Agency in 2007 is a proof for improvement of the investment climate in Turkey

5. ISPAT • The International Network International representatives network worldwideandstrategicpartners in Turkey (Embassies, Consulates, Commercial Attaches, NGO’setc)

6. Turkish Mining Industry Turkey’s Potential is: 2.5% of the World Reserves of Industrial Raw Materials 0.6% of the World Reserves of Metallic Minerals Number of Companies with Foreign Capital in Mining SOURCE: USGS, MTA

7. Turkish Mining Industry 2010, U.S. $ billions + • Turkey strong in exports of • Gold jewelry • Natural stones and cement • Major trade imbalances in • Coal • Copper • Aluminum +Includes all products in the value chain in addition to ores and concentrates *Raw Materials ,Ores and Concentrates SOURCE: UN Comtrade; EtiBor; McKinsey&Company

8. Turkish Mining Industry Current Global Market Size (U.S $Billion) Global Crisis SOURCE: McKinsey&Company, State Planning Organization

9. Gold Overview Turkish gold reserves are around 700 tons (increased from 600 tons over the last 5 years, MTA alone discovered 45 tons in 2009). Probable reserves estimated around 1,700-6,500 tons1 making up for as high as 1/8th of globally proven reserves. Gold production in Turkey gained momentum following the legislation change facilitatingexportation of unrefined gold. 1 ODTU metallurgical engineer AyhanErler and MTA’s cooperative study concluded 1,700-6,500 tons of gold potential in 580 different locations in Turkey SOURCE: MTA, Istanbul Gold Exchange, McKinsey&Company

10. Gold reserves Potential gold-silver reserves Koza Gold mine Eldorado Gold Anatolia Minerals Gold Turkish Gold Reserves Turkey has 700 Tons of proven reserves concentrated in Aegean and Black Sea regions Reserve Name Reserves 2010 Tons Production 2010 Tons Possible Production Sites Company SOURCE: MTA, Istanbul Gold Exchange, McKinsey&Company

11. Copper Operable Mines Turkish Copper Reserves Operational Mines • Downstream industries such as; • Automotive(Expected to grow %11 average and reach up to 23 $ Billion in 2015) • Construction(Expected to grow %7 average and reach up to 79 $ Billion in 2015) will boost Copper Imports. Copper Imports 2010,thousand metric tons PrimaryProduction +5% Given small refining capacity most of the copper sold as concentrate. 5 Exported as concentrate Secondary production from scrap Refined in domestic facilities Refined Copper import Total domestic refined Copper consumption Concentrate production SOURCE: MTA,McKinsey&Company

12. Turkish Bauxite Reserves Aluminum • InmidstreamTurkey has a big gap driven primarily by automotive and construction industries. Net Trade 2010, U.S. $ Billion Mid-stream production by Aluminum source 2010, thousand metric tons 63 Semi production Bauxite mining + aluminarefining Aluminium smelting 1.0 1.0 0.025 Secondary(scrap to aluminum players) Midstream Upstream Downstream Primary (Seydişehir) Net imports SOURCE: MTA,McKinsey&Company

13. Chromium Turkish Chromium Reserves • Turkey has %6 of worldproduction. • Worlds 3rd chromite exporter with %12.8. Chromium Production ChromiumExport Thousand tons U.S. $ Million +1148% SOURCE: MTA, Team Analysis

14. INVESTMENT INCENTIVES IN TURKEY 1. General IncentiveSystem 2. Incentives for Large ScaleInvestments 3. RegionalIncentiveSystem 4.Incentivesfor Strategic Investments

15. NEW INCENTIVE SYSTEM 4. Incentivesfor Strategic Investments 3. Incentives for large-scale Investments 1. General Incentives 2. Regional Incentives • VAT Exemption • Custom Duty Exemption • Tax Deduction • Employer’s share for insurance premium payment • Land provision • VAT Exemption • Custom Duty Exemption • VAT Exemption • Custom Duty Exemption • Tax Deduction • Employer’s share for insurance premium payment • Land provision • Interest Support (except 1st and 2nd regions) • VAT Exemption • Custom Duty Exemption • Tax Deduction • Employer’s share for insurance premium payment • Land provision • Interest Support • VAT Refund • In the 6th Region; income withholding tax and employee’s share for insurance premium payment

16. RegionalIncentiveMap

17. SPECIFIC PRIORITY INVESTMENTS • Specific Priority Investments to be supported by measures of Region V regardless of the region of the Investment: • Mininginvestments • Railroad and maritime transportation investments • Test facilities, windtunnelandsimilarinvestmentsmadeforautomotive, spaceordefenseindustries • Tourism investments in CulturalandPreservationand Development Regions determined by the Council of Ministers Decree • Primary, Middle and High School investmentsbyprivatesector • Specific pharmaceutical and defense industry investments with minimum investment amount of 20 million TL

18. LARGE-SCALE INVESTMENT INCENTIVE SCHEME

19. STRATEGIC INVESTMENT INCENTIVE SCHEME • Investments meeting the criteria below are supported within the framework of the Strategic Investment Incentive Scheme: • Having an import of at least 50 million USD for goods to be produced in the last one year period. • Realizing the production of intermediate and final goods with high import dependence of which more than 50 % are supplied by import, • Having a minimum investment amountof 50 million TL , • Creating minimum 40 % added value,

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22. THANK YOU FOR YOUR ATTENTION For Questions and Inquiries • Dr. Serdar Altay saltay@invest.gov.tr • Mehmet Tangut mtangut@invest.gov.tr