Etibank is a state bank and economic state enterprise that operated in Türkiye between 1935-2001. It was established to operate Türkiye’s underground resources, produce minerals and energy needed by industry, raise capital for these activities, and provide banking services.
Etibank, which was an important tool of nationalization policies in the early period of the Republic, played a role in the production of minerals such as coal, copper, chrome, sulfur, and boron, and contributed to energy production and social development projects. With the privatization process that began in 1998, Etibank was first transformed into Eti Holding A.Ş., and then into Eti Mining Operations General Directorate in 2004.
The first Etibank building. (TMMOB Chamber of Mechanical Engineers)
Establishment and History
Etibank was established on June 14, 1935, with the law numbered 2805, upon the directive of Mustafa Kemal Atatürk. On the same day, the Mineral Research and Exploration Institute (MTA) was established with the law numbered 2804, and these two institutions undertook the duties of identifying and operating Türkiye's mineral reserves. Etibank's name was determined upon Atatürk's suggestion, in reference to the Hittites (Etis), one of the first mining civilizations of Anatolia. The purpose of the establishment was to operate the mineral deposits identified by MTA with modern methods, to produce raw materials and energy for industry, to nationalize mining operations held by foreign companies, and to finance these processes through banking activities. Etibank was given the authority to operate mining fields, obtain licenses, transfer shares, and evaluate resources with economic value.
The establishment was designed in the 1930s as part of the First Five-Year Industrial Plan. Due to Sümerbank’s intensive activities in the textile and cellulose sectors, a separate establishment was needed for mining, and this task was transferred to Etibank. Initially established with a capital of 20 million Turkish Lira, Etibank increased its capital as its activities expanded: 100 million in 1942, 150 million in 1946, 500 million in 1953, and 2 billion Turkish Lira in 1971. Its first general manager was İlhami Nazif Pamir, who served between 1935 and 1939, and then Ahmet Reşit Gencer took over this position. Etibank became fully operational in December 1935, but the main work began in 1936. The establishment process is considered a step that supports the Republic’s economic independence and industrialization goals.
Activities
Etibank has a wide range of activities in the fields of mining, energy production, and banking. Mining activities included the production of a wide variety of minerals such as coal, copper, chrome, sulfur, lignite, iron, boron, silver, zinc, mercury, phosphate, aluminum, molybdenum, antimony, and wolfram. Energy production included the establishment of power plants to meet the needs of mining enterprises and to develop Türkiye's energy infrastructure. Banking services were initiated in 1955, providing financing for mining and industrial investments.
Nationalization, Energy Management, and Mining Enterprises
Etibank, as an instrument of the Republic's nationalization policies, nationalized mining enterprises held by foreign companies. In 1936, the shares of Ergani Bakır T.A.Ş. were purchased from Deutsche Bank for 850 thousand Turkish Lira, and the enterprise was transferred to Etibank on July 18, 1936. In the same year, the coal mines, port, and railway network of the French Ereğli Company in Zonguldak were nationalized, and these enterprises were connected to Etibank on June 11, 1937. The Kuvarshan copper deposit was allocated to Etibank for 99 years in 1937. The Guleman chrome deposit began to be operated by Etibank on May 14, 1936, and an annual chrome export of 30 thousand tons was realized with the agreement made with the German Krupp Company. Şark Kromları T.A.Ş. was established in 1936 to manage the production in Guleman.
Within the scope of the Three-Year Mining Program, Etibank restructured the Ergani Copper, Divriği Iron, Şark Kromları, and Garp Lignite enterprises and increased their production capacity.
In the 1930s, coal production increased from 2.3 million tons to 3.7 million tons, blister copper from 400 tons to 11 thousand tons, and lignite from 110 thousand tons to 800 thousand tons. Facilities such as Murgul Copper, Keban Simli Lead, Bulgardağ, and Çatalağzı power plants were established. Chromium exports contributed to the financing of Karabük iron and steel plants. In 1934, Keçiborlu Sulfur Plant, in 1939, Ergani Copper and Guleman Chrome Plants in Elazığ, in 1958, Emet Colemanite, in 1964, Bandırma Borax, and in 1970, Kırka Borax were incorporated into Etibank.
Energy Production
Etibank has built power plants to meet the energy needs of mining operations and strengthen Türkiye's energy infrastructure. Çatalağzı Power Plant, Dinar Hydroelectric Power Plant, Kovada Hydroelectric Power Plant, Sarıyar Hydroelectric Power Plant, Tunçbilek, and Soma Power Plants are facilities directly built or financed by Etibank. These power plants have ensured the sustainability of mining activities and increased the country’s electricity production capacity. For example, Çatalağzı Power Plant has played an important role in meeting the energy needs of the Zonguldak coal basin.
Banking Activities
Etibank started banking services in 1955. The first branches were opened in İskenderun, İstanbul-Pangaltı, Ankara-Sıhhiye, and Ankara-Anafartalar. Banking activities were carried out to collect capital for mining and industrial investments, provide loans to businesses, and support economic development. Etibank's banking arm operated until it was privatized in 1998.
Economic and Social Contributions
Etibank made significant contributions to the economic development of Türkiye. In 1937, 3.6 million Turkish Lira of revenue was obtained from coal, copper, chrome, and sulfur sales, 1.7 million Turkish Lira of this amount was from mineral exports. In 1948, mining revenues reached 104 million Turkish Liras, and in 1956, Etibank met all of the coal, copper, and sulfur production, 75-80% of lignite production, and 30% of chrome production. After World War II, the ratio of mining revenues to national income increased from 1% to 1.5%. In 1957, Etibank, which employed more than 47 thousand people, became one of the largest employers in Türkiye.
In the social field, Etibank businesses supported economic, social, and cultural development in the regions where they were located. Schools, hospitals, sports facilities, and cinemas were built to meet the needs of the personnel working in the businesses. Transportation infrastructure was improved, and new roads were opened. Heating problems were solved with coal distribution, and the literacy rate and quality of life were increased with education and health services. For example, businesses in Zonguldak and Elazığ accelerated urbanization in the region and revitalized trade and social activities. These contributions of Etibank enabled the modernization of the regions and the increase of social welfare.
Transformation and Privatization
Etibank’s activities expanded into mining, energy, chemistry, and banking until the 1980s. However, some businesses were transferred to separate entities. In 1955, Divriği Iron was transferred to the Turkish Iron and Steel Enterprises; in 1957, Ereğli Coal, Değirmisaz, Seyitömer, Tavşanlı Tunçbilek, Soma, and Garp Lignites were transferred to the Turkish Coal Enterprises; in 1970, electricity production facilities were transferred to the Turkish Electricity Authority. In 1982, AB Etiproducts OY (Finland) was established for the Northern European market, and in 1984, Etimine SA (Luxembourg) was established for the Western European market. In 1983, Çayeli Bakır İşletmeleri A.Ş. (Rize, 45% Etibank partnership) was started with foreign capital.
The privatization process started in 1993, and Karadeniz Copper, Çinkur, and Etibank were transferred to the Banking Privatization Administration. In 1994, Ergani Copper, Keçiborlu Sulfur, Halıköy Mercury, and Mazıdağı Phosphate enterprises were closed. In 1998, Etibank was transformed into Eti Holding A.Ş. with the decision of the Council of Ministers dated January 26, 1998; Eti Bor, Eti Aluminum, Eti Chrome, Eti Copper, Eti Silver, Eti Electrometallurgy, and Eti Marketing companies were established. In 2000, Eti Copper, Eti Chrome, Eti Electrometallurgy, and Eti Silver were privatized. Eti Chrome was sold to Yıltaş Company for 58.1 million dollars in 2004; Çinkur was sold to Kayseri Maden Metal Ticaret A.Ş. for 14 million dollars in 1996, but was transferred to İpek Mobilya in 2004 due to losses. Eti Gümüş was sold to Söğütsen Seramik in 2004.
Etibank Bankacılık was sold to Cavit Çağlar and Dinç Bilgin for 155 million dollars in 1998, but was transferred to the Savings Deposit Insurance Fund in 2000 due to losses, and was closed on December 28, 2001, with a loss of 4.465 trillion liras. In 2004, Eti Holding was transformed into Eti Maden İşletmeleri Genel Müdürlüğü by the Council of Ministers Decision dated January 9, 2004, and continued its activities only with boron mining. The claim on social media that “Etibank was sold to a US company worth 9 trillion dollars for 40 million dollars” is not true. The banking part of Etibank was privatized in 1998, and mining activities were transferred to Eti Maden.
Current Status
Eti Maden Operations General Directorate carries out all of Türkiye's boron production with its chemical plants in Kırka, Emet, and Bandırma. Balıkesir Bigadiç and Bursa Kestelek boron operations also continue their activities. Etimine SA markets boron products worldwide, and 75% of its shares belong to Eti Maden. Eti Maden, which has met 50% of the global boron production capacity with an investment of 1.3 billion dollars in the last 20 years, is an institution belonging to the Treasury, and there is no sale or transfer.
