Supervisor fund expectation for the guarantee of salaries in the presence of the effect of permanent supervisor salaries on mining operating costs in Turkey

Abstract

For mining to be conducted in Turkey, at least one (mining engineer) permanent supervisor is required to be employed in enterprises. From the perspective of mining investors –as a cost item-share of supervisor salaries in the annual mining operating costs is a matter of question. Because, personnel salaries constitute an important part of mining operating costs. Mining investors desire this share not to be high in the total costs. This share makes mining enterprises economically vulnerable in the face of unexpected costs. In Turkey, since land use costs and taxes that mining enterprises pay are high, investors are led towards the methods which they will be able to make an easier cost controlling with. One of these emerges with the deduction from the salaries of employees and mining engineer supervisors and, even, with the practice of dismissing them. With the effect of these factors, can not be fully collecting the supervisor salaries from licensee is one of the biggest problems in the practice in the permanent supervisor system in Turkey. Over SurveyMonkey program, 33% of supervisors stated that they receive their salaries with a delay, and 53% receive their salaries lower than the minimum salary tariff determined in Official Gazette. For supervisors to receive their salaries without delay and over the minimum salary tariff determined according to Official Gazette, in what kind of payment system should the salaries be given? In this study, it was analysed how much of a share the salaries of supervisors working in different mineral groups and (open-pit/underground) operating methods constitute in mining operating costs. The ratio of a supervisor salary to annual operating costs for all mineral groups is 2.8% on average. If other mining engineers who are not supervisors in the operation are included as well, the ratio of salaries of all mining engineers to annual operating costs is 4.7% on average. If all of the supervisors received their salaries over the minimum tariff, this rate would have been 6.4%. When considering an estimated employee salary over the minimum wage, the ratio of the total salaries of all mining engineers and employees in the enterprise to operating costs is 22.7%. These rates, in which the other engineers salaries in the mining operation are excluded, show that the total salaries of the personnel working in a mining operation have a high share in the operating costs. In the presence of this high share, to ensure salary assurance of supervisors and for them to receive a salary at least over the minimum tariff, it will be beneficial to launch a Permanent Supervisor Fund where will be followed up in the control of the state, and where their salaries will be made by the employer. In which payment system should the supervisor salaries be given so that supervisors can receive their salaries without delay and above the minimum tariff? It is wondered whether the supervisor salaries are higher than the minimum salary tariff determined according to Official Gazette in Turkey. The Fund will not only economically contribute to supervisors but also to investors, the bank -with whom the contract is made-, government, mining administration.