Safiya Malik

The Competition Commission of India (CCI) has concluded its inquiry into allegations against IREL (India) Ltd. regarding the supply of Beach Sand Ilmenite in India. The case was initiated following a complaint by the Beach Mineral Producers Association, which accused IREL of abusing its dominant position by imposing unfair trade practices, discriminatory pricing, and excessive pricing in violation of Section 4 of the Competition Act, 2002. After a detailed investigation, the CCI found no contravention of the Act and ordered the matter to be closed.

The case was brought before the CCI by the Beach Mineral Producers Association, a registered society representing the interests of companies engaged in the mining and production of beach minerals. The complaint alleged that IREL, a Mini Ratna Category I Central Public Sector Undertaking (PSU) and the sole producer of Beach Sand Ilmenite in India since 2018, engaged in anti-competitive practices, including:

• Restricted supply to domestic consumers – The complainant claimed that IREL failed to adequately respond to Expressions of Interest (EoI) from domestic consumers and instead offered Standard Quantity Sales Contracts (SQSC) with pre-determined and often inadequate supply quantities.

• Preference to foreign companies – The complaint alleged that IREL prioritized exports over domestic supply, leading to an artificial shortage in the domestic market.

• Imposition of unfair conditions and excessive pricing – IREL was accused of imposing arbitrary contractual terms and significantly increasing Ilmenite prices beyond justifiable limits.

• Denial of market access – The complainant contended that IREL’s restrictive policies limited opportunities for domestic players, distorting competition in downstream industries such as paints, tiles, plastics, and cosmetics.

In response, IREL denied the allegations, asserting that it operated within government regulations. It contended that:

• It did not hold a dominant position in the market, as other competitors existed, and imports of Ilmenite served as an alternative.

• Its supply decisions were guided by government directives, including obligations under an official Memorandum of Understanding (MoU) with the Government of India.

• Price increases were driven by market factors and international benchmarks, rather than anti-competitive intent.

One of the key issues before the CCI was whether IREL qualified as an "enterprise" under Section 2(h) of the Competition Act, given its strategic functions related to atomic energy. The commission determined that:

• While IREL carries out activities linked to atomic energy, its mining and sale of Ilmenite constitute a commercial activity.

• Since Ilmenite mining does not directly involve the extraction of Monazite (a mineral subject to strict government control), IREL’s actions in the Ilmenite market were deemed separate from sovereign functions.

• Accordingly, IREL falls within the definition of an "enterprise" under the Competition Act, making it subject to the provisions of the Act.

The CCI upheld the findings of the Director General (DG), defining the relevant market as "mining and supply of Beach Sand Ilmenite in India." It rejected IREL’s argument that substitutes such as Synthetic Rutile, Rutile, Titanium Slag, and Leucoxene should be included in the market definition.

In assessing dominance, the commission noted that:

• IREL controlled over 90% of the market share in 2021-22.

• The Government of India had granted exclusive rights to IREL to mine Beach Sand Ilmenite following a policy shift in 2019 that barred private players.

• There were regulatory barriers preventing new entrants, reinforcing IREL’s market power.

On this basis, the commission affirmed IREL’s dominant position in the relevant market.

The Competition Commission of India (CCI) determined that IREL (India) Ltd. held a dominant position in the mining and supply of Beach Sand Ilmenite in India but found no contravention of Section 4 of the Competition Act, 2002. The commission examined allegations of discriminatory conditions, excessive pricing, and preferential treatment in exports and recorded that IREL’s conduct did not constitute abuse of dominance.

Regarding the allegations of discriminatory conditions and denial of market access, the CCI considered the Director General’s (DG) investigation into IREL’s supply practices. It recorded that while certain domestic companies, such as V.V. Titanium, had received lower supply quantities, there was no evidence of arbitrary or intentional exclusion. The commission further recorded that IREL’s export operations did not restrict domestic supply, as surplus quantities were exported only after fulfilling domestic demand. Additionally, it held that the Essential Facilities Doctrine was not applicable, ruling that Ilmenite was not an essential facility requiring mandatory access for private entities. Based on these findings, the commission dismissed allegations that IREL had engaged in exclusionary conduct.

The CCI also considered claims of excessive pricing, as the DG’s report recorded 24 price increases by IREL between April 2015 and March 2022. After reviewing cost structures, comparative pricing with competitors, and global price benchmarks, the commission recorded that IREL’s pricing was not excessive. It stated that IREL’s domestic prices were lower than both its export prices and international market rates, contradicting the claim that the company had engaged in unfair pricing practices. As a result, the commission rejected the allegation of excessive pricing.

Similarly, the commission dismissed claims that IREL had favored export customers over domestic buyers by offering lower prices internationally. It recorded that IREL’s pricing structure was influenced by market conditions and regulatory constraints rather than anti-competitive motives. The commission determined that there was no evidence of discriminatory pricing in favor of exports over domestic sales.

The CCI closed the investigation, holding that IREL qualifies as an "enterprise" under the Competition Act and holds a dominant position in the mining and supply of Beach Sand Ilmenite in India. However, the commission found no evidence of abuse of dominance, as there were no unfair supply conditions, excessive pricing, or anti-competitive discrimination between domestic and export sales. Accordingly, no penalty was imposed, and the case was dismissed. Additionally, the commission granted confidentiality for five years to sensitive business information under Regulation 36 of the Competition Commission of India (General) Regulations, 2024.

Case Title: Beach Mineral Producers Association v. IREL (India) Ltd.
Case Number: 26 of 2022
Bench: Chairperson: Ms. Ravneet Kaur, Members: Mr. Anil Agrawal, Ms. Sweta Kakkad, Mr. Deepak Anurag

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