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Turkey transfers operating rights of seven coal fields to private companies

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ISTANBUL, Oct 11 (Reuters) - Turkey has transferred the operating rights of seven high-potential coal fields to private companies, Energy Minister Fatih Donmez said on Thursday, in an effort to reduce the country’s reliance on energy imports.

Once a darling of foreign investors, Turkey’s energy sector, which relies almost entirely on imports, has been hit by a sharp decline in the lira. The currency has lost nearly 40 percent of its value this year, sparking worries over its impact on the wider economy and the banking sector.

State pipeline operator Botas raised prices for natural gas used in electricity production by 50 percent in August. Natural gas and electricity prices for residential use have also been hiked for three consecutive months.

Speaking at the signing ceremony, Donmez said 19 million tonnes of coal would be produced with the new agreements, which is expected to halve annual imported coal costs.

“Every move that will decrease our dependence on foreign countries and increase local production will make us stronger and more independent,” Donmez said, adding the production would also help bring down Turkey’s current account deficit.

He did not give a time scale for the increased production.

The Turkish Hardcoal Authority signed agreements with Erdemir Madencilik, TUMAS and Emsa Enerji, while the Directorate of Turkish Coal signed agreements with Imbat Madencilik, FERNAS, Yapi-Tek and Koc Holding’s Demir Export for the operating rights of the coal fields, the energy ministry said.

Turkey produced 78.9 million tonnes of raw coal in 2017, including 1.8 million tonnes of hardcoal, and imported 36.6 million tonnes of hardcoal, data from Turkey’s statistics institution shows.

Turkey also announced last week it would hold a tender for the operating rights of three solar energy power plants with a total capacity of 1,000 megawatts.

Azeri state energy company SOCAR plans to start up its new oil refinery in Turkey next week to supply feedstock to Turkish petrochemicals firm Petkim, helping cut Turkey’s dependence on imported refined oil products. (Reporting by Ali Kucukgocmen; Editing by Mark Potter)