In a significant decision, the Competition Commission of India (CCI) dismissed allegations of abuse of dominance leveled against IREL (India) Limited, a key player in mining Beach Sand Sillimanite. Despite IREL’s monopolistic hold in the segment, the commission ruled that no misconduct had occurred under competition law.
A Monopoly by Design, Not Abuse
The complaint, brought by Kalpit Sultania, revolved around the company’s exclusive control over Beach Sand Sillimanite since 2016, when the mineral was classified as atomic, shutting out private miners. As a result, IREL became one of the only suppliers alongside Kerala Minerals and Metals Limited (KMML). The petitioner alleged IREL exploited this position by:
- Increasing prices from ₹9,000 per metric ton (2016-17) to ₹14,000 (2020-21).
- Offering preferential pricing to foreign clients over Indian micro, small, and medium enterprises (MSMEs).
- Imposing arbitrary supply quotas on customers.
The Investigation and Findings
Following preliminary scrutiny, CCI ordered an in-depth probe in 2022, led by its Director General (DG). The investigation confirmed IREL’s market dominance, noting the company’s substantial resources, control over supply, and market leverage. The DG reported that IREL exhibited discriminatory pricing practices, favoring international buyers over domestic customers, raising concerns under India’s Competition Act, 2002.
Why IREL Prevailed
IREL defended itself, arguing it wasn’t an “enterprise” under the Act due to its affiliation with the Department of Atomic Energy. However, the CCI ruled otherwise, affirming that IREL operates as a Miniratna Category-I public sector undertaking with commercial autonomy.
Although IREL’s pricing strategies were scrutinized, the CCI noted that another player, KMML, charged even higher rates despite being less dominant. Furthermore, none of IREL’s customers complained about excessive prices, and the company’s vigilance department had actually received complaints suggesting underpricing, resulting in potential revenue losses.
CCI’s Final Word
The CCI concluded that while IREL held a dominant position, it had not engaged in unfair pricing or discriminatory practices that would constitute abuse under Section 4 of the Competition Act. The commission found that IREL employed different sales strategies—such as long-term and annual contracts—based on availability and customer relationships, rather than arbitrary manipulation.
With this ruling, the CCI put an end to a three-year investigation, dismissing the accusations and reinforcing the legality of IREL’s operations.
