Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. (“Park Elektrik” or “the Company”) was established in March 18, 1994 to operate in textile business under the commercial title of Park Tekstil Sanayi ve Ticaret A.Ş. Park Elektrik has a deep-rooted public company culture with shares trading on İstanbul Stock Exchange (“Borsa İstanbul”) since its initial public offering performed in 1997. Park Tekstil Sanayi ve Ticaret A.Ş. was operating in the textile sector when shares offered to public and its main activity was home textile production. The production plant was located in Edirne, Turkey.
The Company changed its commercial title as Park Elektrik Madencilik Tekstil Sanayi ve Ticaret A.Ş. by amendments made in its articles of association in 2000 with the aim of expanding its subject of activity to include mining and energy sectors and has been operating in mining and energy sectors since 2000. With the change performed in 2009, the Company started to use its current commercial title of Park Elektrik Üretim Madencilik Sanayi ve Ticaret A.Ş. Park Elektrik commenced its copper mining operations in 2006 in Madenköy district of Siirt, to produce concentrated copper from copper ore. Until March 2017, Park Elektrik extracted raw copper in Siirt Madenköy mine which than concentrated at the concentration facilities of the Company and almost all of the production exported to abroad.
On 17 November 2016, a landslide occurred in the Madenköy copper mine field of the Company in Siirt, Şirvan and in the following period, assets related to the concentrated copper production were sold on 17 March 2017. As a result of this transaction, copper production operations of the Company was ceased.
The Company changed its operations following the sale of the copper production business and purchased %100 of the shares of Konya Ilgın Elektrik Üretim San. ve Tic. A.Ş. (“Konya Ilgın”) owned by the main shareholder’s of the Company, Park Holding A.Ş. and Turgay Ciner. The purchase was approved at the General Assembly Meeting held on 10 May 2017 of the Company.
Konya Ilgın, in which the Company purchased 100% of its equity, has a project to establish an integrated thermic power plant with an installed capacity of 500 MW in Ilgın district of Konya. The subsidiary Konya Ilgın has the operating rights of lignite coal in related mine fields located in Konya, Ilgın through its mining operation licenses (fields with license number 1247 and 2444) and royalty agreement (field with license number 1247).
According to the Coal Resource Estimation Report prepared in accordance with standards adopted by National Resources and Reserves Reporting Committee (“UMREK”) on 10 January 2022, it is estimated that 188 million tonnes of coal is located in the fields with licence numbers 2444 and 1247. The lower calorific value of the coal on original basis was determined as an average of 2.079 kcal/kg. Total 188 million tonnes of coal resources are classified in the Potential Category and additional studies are continuing in order to start the mineral reserve estimation study.
Konya Ilgın Thermic Power Plant Project is a greenfield investment project, the timing of the investment is affected by many factors such as the path of the Turkish Lira against the US Dollar, supply or/and demand of electricity, electricity prices, incentives provided to investments utilizing renewable energy and domestic resources. Due to recent economic and sectoral developments observed in Turkish electricity market that are out of Company’s and its subsidiary’s control, the construction of the thermal power plant has not commenced yet.
The Energy Market Regulation Authority (“EMRA”) has rejected the application of Konya Ilgın which includes the amendment of the electricity generation license dated 27 February 2013 with a term of 49 years by extending the completion time of the thermal power plant by an additional 66 months and cancelled the electricity generation license with its decision taken on October 27, 2022. Although the reasons we have presented in our application for the extension of the completion time of the facility due to economic and sectoral developments beyond the control of our company and its subsidiary has been evaluated not to be within the scope of “Force majeure situations, and justifiable reasons not caused from the license holder”, within framework of the electricity market legislation, by EMRA, since such an assessment is considered not to be reasonable and in compliance with the relevant legislation, legal action was taken against the decision. The investigation on the merits of the case is ongoing and a decision has not yet been made on the merits of the case.
Our subsidiary Konya Ilgın started to carry out a preliminary mining activity plan due to the fact that the construction of the power plant has not started yet and the construction period of power plant is approximately 3.5 years. Konya Ilgın aims to perform 42.3 million m3 of stripping activity and produce approximately 2.2 million tonnes of coal within the period of June 2019- December 2026. Due to the fact that it is not possible to store the coal for a long time in this pre-investment period (spontaneous combustion as a result of oxidation, etc.), Konya Ilgın started to generate income by selling coal during this transition period. The main mining activity plan which aims to produce approximately 3.5 million tonnes of coal per year during the 30-year operational period of power plant, will meet the fuel need of the thermic power plant. The duration of the preliminary mining activity plan can be extended based on the timing of power plant construction.
