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CCI gives IREL (India) a clean chit in ilmenite market probe

CCI gives IREL (India) a clean chit in ilmenite market probe


The Competition Commission of India (CCI) has ruled in favour of IREL (India) Ltd. (formerly, Indian Rare Earths Ltd.), dismissing allegations of abuse of dominance in the mining and supply of beach sand ilmenite in India.

The decision comes after an extensive investigation into the claims brought by the Beach Mineral Producers Association.

Background

The case originated from a complaint filed by the Beach Mineral Producers Association, which alleged that IREL, a Mini Ratna Category I Central Public Sector Undertaking (PSU), had engaged in anti-competitive practices. The association contended that IREL was the sole producer and supplier of Beach Sand Ilmenite in India following the government’s 2018 restrictions on private sector involvement in the mining of atomic minerals.

The complainant accused IREL of imposing unfair trade conditions, restricting supply to domestic consumers while prioritizing foreign buyers, and engaging in excessive pricing. These actions, according to the complainant, violated Section 4 of the Competition Act, 2002, which pertains to abuse of a dominant position.

Investigation findings

The CCI directed the Director General (DG) to investigate the matter, and the findings were submitted in May 2023. Key points from the investigation included:

• IREL’s market position: The DG confirmed that IREL held a dominant position in the market, controlling over 90 per cent of India’s Beach Sand Ilmenite supply by 2021-22.

• Discriminatory supply practices: The investigation found no substantive evidence that IREL discriminated against domestic buyers in favour of foreign customers. Claims that IREL supplied more Ilmenite to foreign buyers at the expense of Indian consumers were not substantiated.

• Pricing analysis: While the DG found that IREL had increased Ilmenite prices multiple times between 2015 and 2022, there was no clear evidence to support allegations of excessive pricing. The CCI noted that pricing decisions were influenced by international market trends and cost factors.

• Market access allegations: Claims that IREL denied market access to certain domestic buyers, including V.V. Titanium, were examined but not upheld, as the supply restrictions were linked to regulatory constraints rather than anti-competitive behaviour.

CCI’s final ruling

After reviewing the DG’s findings, the CCI concluded that IREL’s operations in Ilmenite mining and sales were commercial activities and fell under the definition of an ‘enterprise’ as per the Competition Act. However, despite IREL’s dominant position, the CCI found no conclusive evidence that the company had abused its dominance through unfair trade practices, discriminatory supply, or excessive pricing.

Consequently, the CCI ruled to close the case against IREL, stating that no violations of the Competition Act were established.

Industry implications

The ruling reaffirms the regulatory environment governing India’s mining sector, particularly concerning strategic minerals. Industry experts believe this decision could have implications for policy discussions on market competition, pricing regulation, and government-controlled mineral resource management.

While the verdict is a relief for IREL, domestic consumers reliant on Ilmenite for industrial applications in paints, ceramics, plastics, and cosmetics may continue to seek alternative sources or policy interventions to ensure a stable and competitive supply.





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