Mining Arbitration in Turkey: Licences, Royalties and Natural Resources Disputes

Introduction

Mining projects are among the most capital-intensive and legally complex investments in Türkiye. A mining operation may require years of geological exploration, substantial financing, land-access arrangements, environmental approvals, infrastructure construction, processing facilities, technical personnel and continuing regulatory compliance.

The legal structure of a mining project may involve several different parties, including:

• The mining licence holder;
• A foreign or domestic investor;
• A joint venture partner;
• A royalty or “rödovans” operator;
• Engineering and construction contractors;
• Equipment suppliers;
• Offtake purchasers;
• Banks and project financiers;
• Landowners;
• Public authorities.

Disputes may arise at any stage of the project. The parties may disagree over the ownership or transfer of mining rights, royalty calculations, production quantities, mineral quality, licence maintenance, development expenditure, environmental obligations, rehabilitation costs, force majeure, termination or the consequences of an administrative licence decision.

For domestic and cross-border projects, arbitration may provide a specialist and neutral forum for resolving private commercial disputes. Mining arbitration in Turkey may be used for disputes arising from joint venture agreements, royalty arrangements, share purchase agreements, mining services contracts, offtake agreements, construction contracts and investment agreements.

However, the existence of an arbitration clause does not mean that every mining-related dispute can be decided by an arbitral tribunal. A fundamental distinction must be drawn between:

1. Private contractual disputes between investors, licence holders, operators, contractors or purchasers; and
2. Public-law disputes concerning the grant, amendment, suspension or cancellation of a mining licence by the competent Turkish authority.

An arbitral tribunal may determine whether one contracting party breached a royalty agreement or failed to finance an agreed exploration programme. It cannot ordinarily replace the Mining and Petroleum Affairs General Directorate, known as MAPEG, in the exercise of its statutory licensing powers or annul an administrative licence-cancellation decision.

This guide examines the principal legal issues relating to mining arbitration in Türkiye, including:

• Mining licences and operating permits;
• Foreign investment in Turkish mining projects;
• Licence transfers;
• Rödovans and private royalty agreements;
• State royalty obligations;
• Joint venture disputes;
• Exploration and reserve disputes;
• Environmental approvals and rehabilitation;
• Licence suspension and cancellation;
• Contract arbitration and investment treaty arbitration;
• Interim measures;
• Expert evidence;
• Annulment and enforcement of arbitral awards.

Turkish Mining Law Framework

The principal statute governing mining activities in Türkiye is Mining Law No. 3213. The law regulates the exploration, operation, ownership, transfer and abandonment of mining rights. MAPEG maintains the official mining-law and secondary-legislation framework and carries out licensing, registration, supervision and related administrative functions.

The regulatory framework also includes:

• The Mining Regulation;
• Regulations concerning mining-field tenders;
• Environmental legislation;
• Occupational health and safety legislation;
• Forestry and land-use legislation;
• Zoning and construction requirements;
• Technical reporting and reserve standards;
• Sector-specific rules applicable to particular minerals.

Mining Law No. 3213 was materially amended by Law No. 7554, adopted on 19 July 2025. Those amendments affected several licensing, permitting, financial and rehabilitation provisions. MAPEG subsequently published implementation notices, draft secondary legislation and 2026 guidance concerning licence and rehabilitation payments. Mining contracts and legal opinions should therefore be reviewed against the current consolidated legislation rather than relying on older versions of the Mining Law.

State Control over Mineral Resources

Under the Turkish mining regime, mineral resources are subject to the state’s authority and control. The right to explore and operate a mineral deposit is therefore not derived merely from ownership of the surface land.

A landowner does not automatically own the mineral resource located beneath the property. Similarly, acquiring shares in a company that owns land does not by itself create a mining right.

A mining investor generally requires:

• A legally valid mining licence;
• The relevant operating permit;
• Environmental and land-use approvals;
• Compliance with technical and financial obligations;
• Any other permits required for the project area and mineral type.

This distinction is essential in mining transactions. A project may involve three legally separate interests:

1. Ownership or use of the surface land;
2. The administrative mining licence;
3. Contractual rights among investors, operators and financiers.

A due diligence review must examine each element separately.

Who Can Hold Mining Rights in Türkiye?

Mining rights are subject to statutory eligibility requirements. Under the Mining Law framework, rights may be granted to qualifying Turkish citizens, companies established under Turkish law whose corporate purposes satisfy the statutory requirements, and authorised public entities.

A foreign investor may participate in a Turkish mining project through a company incorporated under Turkish law. However, the licence holder must itself satisfy the statutory conditions applicable to mining rights.

The corporate documents of the licence-holding company should therefore be reviewed to confirm:

• Incorporation under Turkish law;
• Corporate purpose and authority;
• Shareholding structure;
• Authorised signatories;
• Compliance with licence requirements;
• Absence of transfer or control restrictions.

Foreign ownership of the shares and legal ownership of the mining licence are distinct matters. A foreign company purchasing a Turkish mining business commonly acquires shares in the Turkish licence holder rather than attempting to hold the Turkish mining licence directly.

The transaction must also address whether a direct or indirect change of control requires contractual consent, financing approval or notification to any relevant authority.

The Mining Licence Lifecycle

Mining rights develop through a regulatory process rather than through a single permanent authorisation.

Depending on the mineral group and project, the lifecycle may include:

• Application or tender;
• Exploration licence;
• Exploration activities;
• Technical and resource reporting;
• Operating project submission;
• Operating licence;
• Operating permit;
• Production;
• Licence extension;
• Rehabilitation and closure;
• Abandonment or transfer.

Each stage carries separate obligations.

A company may possess an operating licence but still lack the operating permit or another approval required to commence production lawfully. The parties should therefore avoid using the general expression “fully licensed mine” without identifying the precise status of every permit.

Exploration Licence Disputes

Exploration-stage projects involve substantial geological and financial uncertainty.

The parties may disagree about:

• Whether the investor funded the required exploration programme;
• Whether drilling targets were selected properly;
• Whether expenditure was eligible under the joint venture;
• Whether technical reports were accurate;
• Whether exploration results were disclosed;
• Whether the project should proceed to the development stage;
• Whether one party earned an ownership interest.

A farm-in or earn-in agreement may provide that an investor acquires an interest by spending a specified amount on exploration.

The agreement should define:

• Eligible exploration expenditure;
• Annual minimum spending;
• Operator overhead;
• Related-party charges;
• Technical approval procedures;
• Treatment of overspending;
• Consequences of failure to meet milestones;
• Ownership and access to geological data;
• Rights following a discovery.

A dispute may arise where substantial expenditure has been incurred but the technical result remains uncertain. The contract should distinguish between an obligation to spend and an obligation to achieve a particular geological result.

Resource and Reserve Disputes

The value of a mining project depends heavily on estimates of mineral resources and economically recoverable reserves.

Disputes may concern:

• Sampling methodology;
• Assay results;
• Cut-off grade;
• Geological modelling;
• Density assumptions;
• Metallurgical recovery;
• Commodity prices;
• Operating costs;
• Reserve classification;
• Competent-person or qualified-person reporting.

Resource and reserve estimates are not identical to guaranteed production.

A purchaser alleging that reserves were misrepresented must identify:

• The representation made;
• The reporting standard applied;
• The data available at the relevant time;
• Whether assumptions were reasonable;
• Whether later information merely changed the estimate;
• The resulting financial loss.

Technical experts in geology, mining engineering, metallurgy and valuation may be required.

Operating Licence and Permit Disputes

Once a project moves from exploration to production, disputes may concern the licence holder’s compliance with the approved operating project.

Potential issues include:

• Failure to commence production;
• Production outside the licensed area;
• Extraction of an unauthorised mineral;
• Incomplete technical reporting;
• Failure to pay statutory charges;
• Non-compliance with occupational safety rules;
• Failure to appoint required technical personnel;
• Failure to rehabilitate disturbed land;
• Production exceeding approved limits.

These matters may create both administrative and contractual consequences.

For example, a rödovans operator’s regulatory violation may expose the licence holder to administrative sanctions. The licence holder may then pursue the operator contractually for indemnification.

The arbitral tribunal can determine the contractual allocation of liability between the licence holder and operator. It cannot ordinarily cancel or substitute the administrative sanction itself.

Licence Transfers

Mining licences and related statutory mining rights may be transferred only in accordance with the Mining Law and the administrative procedures applied by MAPEG.

MAPEG’s current transfer documentation refers to Articles 5, 6, 13, 24 and 27 of the Mining Law and the corresponding provisions of the Mining Regulation. For operating licences with an active operating permit, the transfer process requires specified application documents, financial compliance and registration procedures. Current MAPEG documentation also indicates that transfer fees and outstanding state claims must be considered before completion.

A contractual agreement to sell a licence does not itself necessarily complete the administrative transfer.

The parties should distinguish among:

• Signing the licence transfer agreement;
• Satisfaction of conditions precedent;
• MAPEG approval or processing;
• Registration in the mining registry;
• Payment of the transfer price;
• Transfer of operational control;
• Transfer of related land and environmental permissions.

The purchase price may be held in escrow pending completion of the regulatory transfer.

Mining Share Acquisitions

Instead of transferring the licence directly, an investor may acquire shares in the licence-holding company.

A mining share purchase agreement should address:

• Legal validity of the licences;
• Licence areas and mineral groups;
• Operating permits;
• State royalty liabilities;
• Environmental obligations;
• Pending inspections;
• Rehabilitation liabilities;
• Land-access rights;
• Technical data;
• Reserve representations;
• Litigation and administrative proceedings.

Warranty disputes may arise after closing if the buyer discovers:

• Undisclosed royalty debt;
• Non-compliant production;
• Incorrect reserve reports;
• Missing forestry permits;
• Environmental damage;
• Unrecorded rödovans arrangements;
• Pending licence cancellation.

The arbitration clause should cover regulatory warranties and indemnities while recognising that the tribunal cannot compel MAPEG to maintain or renew a licence.

Rödovans Agreements in Turkish Mining

A rödovans agreement generally allows another person or company to conduct mining activities within all or part of a licensed field in return for payment to the licence holder.

The rödovans payment may be calculated according to:

• Tonnes produced;
• Tonnes sold;
• Gross sales revenue;
• Net smelter return;
• Mineral grade;
• A fixed minimum payment;
• A combination of fixed and variable royalties.

The licence holder remains legally important even where daily operations are conducted by the rödovans operator.

MAPEG’s official documentation states that mining activity conducted under a rödovans agreement without the required administrative process may be stopped. MAPEG also states that it is not a party to the private rödovans agreement merely because the agreement is annotated in the mining registry.

This distinction has major consequences.

Registration or annotation may provide regulatory visibility, but it does not convert MAPEG into:

• A guarantor of the agreement;
• A party to the arbitration clause;
• A debtor of the private royalty;
• An adjudicator of contractual payment claims.

Common Rödovans Disputes

Rödovans disputes may concern:

• Underreported production;
• Incorrect royalty calculations;
• Failure to meet minimum production;
• Unauthorised extraction;
• Mineral quality;
• Stockpile ownership;
• Sale to related companies below market value;
• Non-payment of state royalties;
• Environmental damage;
• Licence sanctions caused by the operator;
• Termination and return of the site.

The agreement should define exactly when the royalty becomes payable.

For example, payment may be triggered by:

• Extraction;
• Delivery to the processing plant;
• Sale;
• Receipt of customer payment;
• Export;
• Shipment from the site.

Ambiguous wording may create substantial differences where large stockpiles remain unsold.

Private Royalties and State Royalties Must Be Distinguished

Mining transactions may involve both private contractual royalties and the statutory state right, known as “Devlet hakkı.”

The state right is a public financial obligation arising from mineral production and is governed by the Mining Law. Its calculation may depend on factors such as the mineral group, production or sales data, pithead sales price and statutory rate.

MAPEG publishes annual guidance and declarations relating to state royalty calculations. Its 2025 state-right rates were published in April 2026, reflecting the statutory rules applicable to the relevant production year. MAPEG also requires licence holders to submit state-right declarations, including in some circumstances where there was no production or shipment.

A private royalty is different. It arises from a contract between commercial parties.

The agreement should state whether the private royalty is calculated:

• Before or after the state right;
• Before or after processing costs;
• Before or after transport;
• On gross or net revenue;
• Before or after taxes;
• Before or after third-party smelting charges.

The agreement should also allocate responsibility for state-right declarations and payments.

Royalty Calculation Disputes

A royalty clause should define the complete mathematical formula.

Disputes frequently concern:

• Quantity;
• Moisture content;
• Mineral grade;
• Payable metal;
• Treatment charges;
• Refining charges;
• Transport;
• Insurance;
• Penalties for impurities;
• Commodity-price reference;
• Foreign exchange;
• Related-party sales.

A “net smelter return” royalty should not be used without defining the permitted deductions.

The contract should identify:

1. The recognised commodity-price source;
2. The pricing date or averaging period;
3. The applicable exchange rate;
4. Permitted processing deductions;
5. Treatment of hedging;
6. Treatment of related-party transactions;
7. Audit rights;
8. Payment and objection periods.

Where minerals are sold to an affiliate, the agreement should provide an arm’s-length valuation mechanism.

Minimum Royalty and Production Obligations

A licence holder may grant a rödovans right in return for a minimum annual payment, even where production remains below the forecast level.

The operator may argue that the minimum should not apply because:

• Permits were delayed;
• The licence holder failed to provide access;
• Geological conditions differed;
• Force majeure prevented production;
• Commodity prices collapsed;
• The site was suspended by authorities.

The licence holder may respond that the minimum royalty was intended to transfer operational and market risk to the operator.

The agreement should specify whether the minimum royalty is:

• Absolute;
• Suspended during force majeure;
• Reduced for licence-holder breach;
• Creditable against future production royalties;
• Payable after a grace period;
• A condition of continuation.

Joint Venture Disputes

Mining joint ventures may be incorporated or contractual.

An incorporated joint venture may operate through a Turkish company holding the licence. A contractual joint venture may allocate exploration, development and economic interests among the parties without creating a separate project company.

Disputes may concern:

• Capital calls;
• Dilution;
• Operator conduct;
• Budget approval;
• Related-party contracts;
• Development decisions;
• Financing;
• Sale of production;
• Transfer of interests;
• Deadlock;
• Exit rights.

A mining joint venture agreement should regulate:

• Management committee voting;
• Reserved matters;
• Annual work programmes;
• Cash-call procedure;
• Default and dilution;
• Technical reporting;
• Data ownership;
• Marketing rights;
• Change of control;
• Transfer restrictions;
• Abandonment.

Where the licence is held by one joint venture party, the other party faces additional regulatory risk. The agreement should provide protections against unauthorised licence transfer, pledge, abandonment or non-payment of statutory fees.

Offtake Agreement Disputes

An offtake agreement provides for the sale of future mining production.

It may be used to support project financing by providing a predictable buyer and revenue stream.

Disputes may concern:

• Failure to deliver;
• Failure to take delivery;
• Quality specifications;
• Quantity tolerances;
• Pricing formulas;
• Treatment and refining charges;
• Shipment schedules;
• Assay procedures;
• Rejection rights;
• Force majeure.

The agreement should regulate independent sampling and umpire analysis where the parties’ assay results differ.

Where financing, offtake and shareholder arrangements are connected, their arbitration clauses should be compatible. Otherwise, the same production failure may generate separate proceedings before different tribunals.

Mining Services and Contractor Disputes

Mining projects depend on contractors providing:

• Drilling;
• Blasting;
• Excavation;
• Haulage;
• Crushing;
• Processing;
• Waste management;
• Laboratory services;
• Mine development;
• Equipment maintenance.

Disputes may involve:

• Unit rates;
• Measured quantities;
• Fuel-price adjustment;
• Productivity;
• Equipment availability;
• Delay;
• Safety incidents;
• Ore loss;
• Dilution;
• Damage to the mine.

The contract should allocate responsibility for compliance with the operating project and statutory mining rules.

A contractor may control daily operations, but the licence holder may remain exposed to administrative sanctions. The contract should therefore contain indemnity, audit and step-in provisions.

Environmental Impact Assessment

Mining projects may be subject to Türkiye’s Environmental Impact Assessment system.

The Ministry of Environment, Urbanisation and Climate Change distinguishes between projects requiring an “EIA Positive” decision under Annex I and projects processed through the Annex II selection and screening framework. The Ministry’s historical data show that mining and petroleum projects represent a significant proportion of both categories.

The applicable EIA procedure depends on matters such as:

• Mineral type;
• Project scale;
• Production capacity;
• Processing facility;
• Waste storage;
• Project location;
• Expansion of an existing operation.

A mining licence does not automatically replace the EIA process. Likewise, an EIA decision does not by itself grant the mining licence or every land-use approval.

Land, Forestry and Special-Use Permits

A mining project may require separate authorisations where the licence area overlaps:

• Forest land;
• Agricultural land;
• Pasture;
• Protected areas;
• Cultural or archaeological sites;
• Water-protection areas;
• Private property;
• Public land.

The 2025 amendments to the Mining Law materially affected the coordination of certain permitting processes. Contract documents should allocate the risk of obtaining and maintaining these approvals and should be checked against the current implementation framework.

The licence holder and operator should clarify:

• Who prepares applications;
• Who pays land-use fees;
• Who communicates with authorities;
• Who bears delay risk;
• Who compensates landowners;
• What happens if approval is refused.

Rehabilitation and Mine Closure

Mining operations create long-term obligations extending beyond the final sale of ore.

Closure and rehabilitation may require:

• Securing pits and shafts;
• Stabilising waste areas;
• Restoring topsoil;
• Managing water;
• Removing facilities;
• Replanting vegetation;
• Monitoring environmental effects;
• Returning land in an acceptable condition.

Law No. 7554 introduced significant changes concerning rehabilitation funding. MAPEG issued notices for the collection of rehabilitation payments for 2026 and continues to publish annual licence and rehabilitation payment requirements.

A transaction agreement should determine who bears:

• Historical rehabilitation liabilities;
• Current annual rehabilitation payments;
• Closure costs;
• Cost overruns;
• Liability for pre-existing contamination;
• Post-closing monitoring.

A licence sale should not assume that all environmental liability transfers automatically to the buyer as between the parties or vis-à-vis public authorities.

Administrative Licence Sanctions

MAPEG may impose administrative consequences for non-compliance under the Mining Law.

Depending on the legal basis and seriousness of the violation, possible consequences may include:

• Administrative fines;
• Suspension of activity;
• Restrictions on licence transactions;
• Licence cancellation;
• Collection of unpaid statutory amounts;
• Other statutory measures.

MAPEG’s own institutional reporting recognises its authority to impose sanctions, including licence cancellation and administrative fines, within its statutory mandate.

A licence holder challenging a MAPEG decision must use the appropriate administrative-law remedy.

A private arbitration clause between the licence holder and operator does not authorise the tribunal to annul the MAPEG decision.

Contractual Consequences of Licence Cancellation

Although an arbitral tribunal cannot normally cancel an administrative decision, it may determine the contractual consequences of that decision.

For example, the tribunal may decide:

• Whether the operator caused the cancellation;
• Whether the licence holder breached a warranty;
• Whether termination was valid;
• Whether indemnification is payable;
• Whether advance royalties must be returned;
• Whether damages were caused by regulatory non-compliance.

The tribunal must distinguish between:

• Reviewing the legality of the administrative act; and
• Determining private contractual liability arising from the event.

Where an administrative annulment action is pending, the tribunal may consider whether to stay all or part of the arbitration.

Change in Law Disputes

Mining projects may last for decades. Changes in legislation can affect:

• Royalty rates;
• Rehabilitation obligations;
• Environmental standards;
• Forestry fees;
• Labour costs;
• Taxation;
• Export restrictions;
• Technical reporting;
• Permitting.

The 2025 Mining Law amendments demonstrate the importance of a carefully drafted change-in-law clause.

The agreement should define:

• General changes in law;
• Project-specific changes;
• Discriminatory changes;
• Changes announced before signing;
• Materiality thresholds;
• Mitigation;
• Price or royalty adjustment;
• Termination rights.

A change in law does not automatically excuse performance. The contractual risk allocation is decisive.

Force Majeure in Mining Projects

Possible force majeure events may include:

• Earthquake;
• Flood;
• Landslide;
• War;
• Embargo;
• Government prohibition;
• Exceptional infrastructure failure;
• Serious epidemic restrictions.

Mining-specific events such as poor ore grade or unexpected geological conditions are not automatically force majeure. These may represent commercial or geological risks allocated to the operator.

The clause should regulate:

• Notice;
• Supporting evidence;
• Mitigation;
• Suspension of minimum royalties;
• Extension of time;
• Long-stop termination;
• Care and maintenance costs.

Contract Arbitration versus Administrative Litigation

The correct dispute forum depends on the nature of the claim.

Claims commonly suitable for arbitration

These may include:

• Unpaid contractual royalties;
• Joint venture capital calls;
• Breach of an offtake agreement;
• Operator indemnification;
• Share purchase warranties;
• Contractor delay;
• Confidentiality;
• Contractual termination;
• Damages.

Claims commonly requiring administrative proceedings

These may include challenges to:

• Licence refusal;
• Licence cancellation;
• Administrative fines;
• Operating-permit refusal;
• Official registration decisions;
• Regulatory suspension;
• Public-authority permit decisions.

A mining contract should not describe every dispute as exclusively contractual where public-law proceedings may be unavoidable.

Foreign Investment and Investment Treaty Arbitration

A foreign investor may, in appropriate circumstances, have rights under an applicable bilateral investment treaty.

Türkiye’s Ministry of Trade states that Türkiye has signed bilateral investment treaties with 98 countries and that 76 were in force at the time of its current published overview. The Ministry identifies common protections including fair and equitable treatment, full protection and security, protection against expropriation, free transfer of returns and investor-state dispute settlement.

A mining licence or shareholding in a Turkish mining company may qualify as a protected investment under a particular treaty, but this must be examined treaty by treaty.

The investor must establish:

• Protected nationality;
• A qualifying investment;
• State consent to arbitration;
• Compliance with any waiting period;
• Breach of a treaty standard;
• Causation;
• Loss.

A contractual breach is not automatically a treaty breach.

For example, a dispute over the correct calculation of a private royalty is ordinarily a commercial dispute. A discriminatory or uncompensated state measure destroying a qualifying foreign investment may potentially raise treaty issues.

Structuring Foreign Mining Investments

Treaty protection should be considered before the investment is made.

A tribunal may reject restructuring undertaken only after a dispute has become foreseeable.

Investors should review:

• Direct and indirect ownership;
• Treaty nationality;
• Denial-of-benefits provisions;
• Local company requirements;
• Tax consequences;
• Corporate substance;
• Dispute-resolution clauses.

Treaty planning does not replace compliance with the Mining Law. The Turkish licence holder must continue satisfying statutory eligibility, payment and operating obligations.

Evidence in Mining Arbitration

Mining arbitration commonly involves extensive technical and financial evidence.

Relevant records may include:

• Licence and permit files;
• MAPEG correspondence;
• Operating projects;
• Geological models;
• Drill logs;
• Assay certificates;
• Production records;
• Weighbridge data;
• Shipment documents;
• Stockpile surveys;
• Sales invoices;
• Royalty statements;
• Environmental reports;
• Rehabilitation plans;
• Board minutes;
• Technical committee records.

Electronic production and operational systems may contain critical evidence concerning:

• Tonnes extracted;
• Equipment hours;
• Grade;
• Recovery;
• Waste;
• Sales;
• Shipment dates.

The parties should preserve original data and metadata as soon as a dispute becomes foreseeable.

Expert Evidence

Mining cases often require several expert disciplines.

Experts may include:

• Geologists;
• Mining engineers;
• Metallurgists;
• Surveyors;
• Environmental engineers;
• Rehabilitation specialists;
• Commodity traders;
• Forensic accountants;
• Valuation professionals;
• Delay experts.

A geological expert may assess the reliability of a resource estimate. A surveyor may measure stockpile volume. A metallurgist may calculate recovery. A financial expert may determine the royalty or lost project value.

The tribunal remains responsible for legal interpretation.

Damages in Mining Arbitration

Potential remedies may include:

• Unpaid royalties;
• Outstanding purchase price;
• Exploration expenditure;
• Development costs;
• Lost profits;
• Diminution in project value;
• Closure costs;
• Environmental indemnities;
• Contractual penalties;
• Interest;
• Arbitration costs.

A mining valuation may use:

• Discounted cash flow;
• Comparable transactions;
• Market multiples;
• Historical expenditure;
• Probabilistic resource methods.

The correct method depends on the project stage.

A producing mine with reliable operating history may support a different valuation method from an early-stage exploration licence with no defined economic reserve.

The claimant must avoid treating speculative mineral potential as proven future profit.

Interim Measures

Urgent protection may be needed where a party threatens to:

• Transfer the licence;
• Dispose of project shares;
• Remove equipment;
• Sell disputed stockpiles;
• Destroy geological data;
• Prevent access to the mine;
• Divert sale proceeds;
• Breach confidentiality.

In Turkey-seated international arbitration, Law No. 4686 governs qualifying foreign-element disputes and recognises court assistance with interim measures. It also excludes matters outside the parties’ control and rights in rem over Turkish immovable property from its scope.

Domestic arbitration is governed by the Code of Civil Procedure, which similarly limits arbitration to disposable disputes and provides a procedural framework for interim protection and evidence preservation.

Court assistance may be necessary where the requested measure:

• Must bind MAPEG;
• Concerns a public registry;
• Requires attachment;
• Affects a non-signatory;
• Requires coercive execution;
• Must be granted without notice.

Drafting a Mining Arbitration Clause

A mining arbitration clause should cover the full contractual structure.

An illustrative clause may provide:

Any dispute, controversy or claim arising out of or in connection with this Agreement, including any dispute concerning its formation, validity, interpretation, exploration expenditure, production, royalties, mineral quality, operating obligations, environmental responsibilities, breach, termination or damages, shall be finally resolved by arbitration.

The clause should also state:

• The institution;
• The legal seat;
• The language;
• The number of arbitrators;
• The governing law;
• Required mining expertise;
• Interim measures;
• Confidentiality;
• Consolidation;
• Expert determination.

It should clarify that the arbitration clause does not prevent a party from:

• Challenging an administrative decision before the competent court;
• Applying for urgent judicial protection;
• Completing mandatory MAPEG procedures;
• Seeking remedies involving public authorities.

Expert Determination and Arbitration

Some technical issues may be suitable for expert determination.

These include:

• Stockpile volume;
• Assay difference;
• Mineral grade;
• Royalty arithmetic;
• Commodity-price adjustment;
• Production measurement.

Arbitration may be more suitable for:

• Contract interpretation;
• Fraud;
• Wrongful termination;
• Indemnity;
• Licence warranties;
• Damages.

The agreement should define whether the expert’s decision is final, provisionally binding or reviewable for manifest error.

Multi-Party Mining Disputes

A mining project may involve:

• Licence holder;
• Shareholders;
• Rödovans operator;
• EPC contractor;
• Mining contractor;
• Offtake purchaser;
• Lender;
• Guarantor;
• Landowner.

Different contracts may contain different arbitration clauses.

For example:

• Joint venture agreement: ISTAC arbitration;
• Rödovans agreement: Turkish courts;
• Offtake agreement: foreign arbitration;
• Financing agreement: foreign courts;
• Guarantee: no dispute clause.

This fragmentation may prevent related disputes from being heard together.

The project documents should coordinate:

• Joinder;
• Consolidation;
• Tribunal appointment;
• Related-party consent;
• Assignment;
• Guarantees;
• Confidentiality.

Annulment of Turkey-Seated Awards

A Turkey-seated arbitral award is not subject to an ordinary appeal on the merits.

Under the applicable domestic or international arbitration legislation, an award may be challenged only on limited grounds such as:

• Invalid arbitration agreement;
• Improper tribunal constitution;
• Excess of jurisdiction;
• Serious procedural irregularity;
• Violation of equality or the right to be heard;
• Non-arbitrability;
• Public policy.

The annulment court should not ordinarily repeat the geological analysis, recalculate every royalty statement or replace the tribunal’s valuation merely because one party disagrees with the award.

International Enforcement

A foreign or non-domestic commercial mining award may qualify for recognition and enforcement under the New York Convention.

Türkiye is a contracting state and applies the Convention subject to its reservations. The UNCITRAL status materials provide the authoritative international treaty framework.

Potential enforcement assets may include:

• Bank accounts;
• Company shares;
• Receivables;
• Mining equipment;
• Sale proceeds;
• Contractual royalties.

Recognition of an award against a public entity should be distinguished from execution against particular public assets. State or sovereign immunity questions may require separate analysis.

Practical Mining Arbitration Checklist

Before signing or enforcing a mining agreement connected with Türkiye, the parties should determine:

1. Who legally holds the mining licence;
2. The exact licence and operating-permit status;
3. Which mineral groups are authorised;
4. Whether statutory fees and state royalties are current;
5. Whether licence transfer or registration is required;
6. Whether the rödovans arrangement has completed the required MAPEG process;
7. Which party bears regulatory compliance risk;
8. How production and mineral grade are measured;
9. How private royalties are calculated;
10. Which deductions are permitted;
11. How related-party sales are valued;
12. Who controls geological and production data;
13. Which environmental approvals are required;
14. Who bears rehabilitation liability;
15. How changes in law affect the commercial terms;
16. Which events qualify as force majeure;
17. Whether an expert or tribunal decides technical disputes;
18. Which administrative matters remain outside arbitration;
19. Whether related contracts contain compatible clauses;
20. Where the award may need to be enforced.

Frequently Asked Questions

Can mining disputes be arbitrated in Türkiye?

Yes. Private contractual disputes concerning royalties, joint ventures, share sales, offtake, construction, services and damages may generally be arbitrated through a valid written arbitration agreement.

Can an arbitral tribunal grant a Turkish mining licence?

No. Mining licences are granted through the statutory administrative system. An arbitral tribunal cannot replace MAPEG.

Can a tribunal annul a licence-cancellation decision?

Ordinarily, no. A challenge to an administrative licence decision must be pursued through the competent administrative-law procedure. The tribunal may determine contractual damages arising from the cancellation.

Can a foreign company hold a Turkish mining project?

Foreign investors may participate through companies established under Turkish law. The licence holder must satisfy the statutory eligibility requirements applicable to mining rights.

What is a rödovans agreement?

It is a private agreement under which an operator conducts mining activities in a licensed field and makes contractual payments to the licence holder, commonly based on production or sales.

Is MAPEG a party to a rödovans agreement?

No. MAPEG’s official documentation states that the General Directorate is not a contractual party merely because the agreement is annotated for regulatory purposes.

Can mining continue under an unapproved rödovans arrangement?

MAPEG states that activities conducted under a rödovans agreement without the required permission or process may be stopped.

Is a private royalty the same as the state right?

No. The private royalty arises from the parties’ agreement. The state right is a statutory payment governed by the Mining Law.

Can a mining licence be transferred by contract alone?

No. The parties may sign a transfer agreement, but the transfer must also comply with the statutory MAPEG registration and approval procedures.

Does a mining licence replace an EIA decision?

No. Mining licensing and environmental assessment are separate regulatory processes.

Who is responsible for mine rehabilitation?

Public-law obligations may attach according to the licence and statutory framework. The parties may allocate financial responsibility contractually, but that allocation does not necessarily bind public authorities.

Can a foreign investor start investment treaty arbitration?

Potentially, where an applicable treaty protects the investor and investment, the state has consented to arbitration and the treaty’s jurisdictional and procedural requirements are satisfied.

Can interim protection be obtained during mining arbitration?

Yes. The tribunal or a competent court may provide qualifying interim relief, depending on the applicable rules and the nature of the measure. Orders binding public authorities or third parties generally require judicial or administrative action.

Can a foreign mining award be enforced in Türkiye?

A qualifying foreign commercial award may be recognised and enforced under the New York Convention or Turkish private international law, subject to limited refusal grounds.

Conclusion

Mining arbitration in Turkey offers an effective mechanism for resolving complex contractual disputes concerning licences, private royalties, rödovans arrangements, joint ventures, exploration programmes, offtake agreements and mining services.

The legal structure of a mining project must nevertheless be understood correctly.

Mineral resources are subject to the state’s authority, and mining rights are obtained through the statutory licensing system. Surface ownership, company ownership and mining rights are separate legal concepts.

A mining investor should verify:

• The licence holder;
• Licence status;
• Operating permit;
• Mineral group;
• Regulatory payments;
• Environmental approvals;
• Land-use rights;
• Rehabilitation obligations.

Contractual mining disputes may be arbitrated. Public-law licence decisions generally remain within the authority of MAPEG and the administrative courts.

Rödovans arrangements require particular care. The agreement should define production, sales, grade, deductions, audit rights, environmental responsibility and the consequences of administrative sanctions. Completion of the relevant MAPEG procedure does not make MAPEG a party to the agreement.

Private royalty payments must also be distinguished from the statutory state right. The agreement should explain whether the private royalty is calculated before or after state royalties, processing costs, transport expenses and other deductions.

Foreign investors may benefit from commercial arbitration clauses and, in appropriate cases, investment treaty protection. However, a contractual breach is not automatically a treaty violation, and treaty jurisdiction must be established separately.

The 2025 amendments to the Mining Law and MAPEG’s subsequent 2026 implementation notices demonstrate the importance of current regulatory due diligence. Licence, rehabilitation, permitting and financial obligations should be reviewed throughout the project rather than only at acquisition.

An effective arbitration clause should cover:

• Exploration expenditure;
• Production;
• Royalties;
• Quality;
• Offtake;
• Environmental obligations;
• Termination;
• Damages.

It should also preserve the parties’ rights to pursue administrative remedies and seek urgent court protection.

Mining disputes are evidence-intensive. Geological data, assay results, production systems, stockpile surveys, sale records and regulatory correspondence should be preserved as soon as a dispute becomes foreseeable.

For Turkish and international mining investors, licence holders, operators, contractors, purchasers and financiers, specialised mining and arbitration counsel can assist with regulatory due diligence, contract drafting, royalty claims, administrative coordination, arbitral proceedings and enforcement of awards.