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TMI Blog2013 (4) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... d be the market of 'iron ore production/supply in India' and OP 1 (which holds only 16% for the year 2011-12) is not a dominant player in this market. The Commission considered the facts and data placed on record by both sides and is of the view that the relevant market definition proposed by the informant cannot be accepted. The informant has inflated the market share of OP 1 by excluding captive iron ore production, low grade iron ore having less than 60% Fe content and exports from the relevant market definition. This indicates that the relevant market was much broader than the one proposed by the informant. However the relevance of determining relevant market and dominance of an enterprise is only there in free markets. Where mining act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, the iron ore market can be divided broadly into two product markets (i) low grade iron ore (less than 60% ferrous content) and (ii) medium to high grade iron ore (more than 60% ferrous content). The informant stated that since low grade iron ore having less than 60% Fe was unsuitable for use as input by steel manufacturers of India, the low grade iron ore would not form part of the relevant market. Therefore, the relevant product market proposed by the informant is the market for 'non-captive iron ore with more than 60% Fe content excluding exports'. With regard to geographic market, the informant stated that the main producers of iron ore having more than 60% Fe content were the states of Karnataka, Chattisgarh, Odisha and Jharkhand. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... abusive practices being adopted by OP 1, including the following: (a) Imposition of unfair pricing amounting to contravention of section 4(2)(a)(i) of the Act. It alleged that even when the cost of production of iron ore remained static between Rs. 200-300 per MT, OP 1's sale price ranged between Rs.3200 to 8000 per MT resulting in a very high profit margin of 85%. (b) Discriminatory pricing between domestic and overseas buyers amounting to a contravention of section 4(2)(a)(i) of the Act. (c) Imposing unilateral one sided conditions in the contracts entered into between OP 1 and the informants e.g. raising the prices for the e-auction to the arbitrary level with retrospective effect, changing pricing strategy without any consultation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the market share of OP 1 by excluding captive iron ore production, low grade iron ore having less than 60% Fe content and exports from the relevant market definition. The submission of the informant that low grade iron ore having less than 60% Fe was unsuitable to be used as input by steel manufacturers is not acceptable as the low grade iron ore is utilized by manufacturers incurring some additional cost. As per the publically available information, low grade ore i.e. +45% Fe can be beneficiated by High Gradient Magnetic Separators (HGMS)/Wet High Intensity Magnetic Separators (WHIMS) to produce 'Concentrate of +65% Fe with +70% recovery. Also, iron ore slime/processing waste with 40% Fe can be filtered; so that 30% slime shall yield ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red with. Also, the Supreme Court left this issue to the Central Empowered Committee to have discussions with OP 1, if they desire any change thereof. However, even the Central Empowered Committee, after discussions with OP 1, agreed that the pricing mechanism of OP 1 in fixing of basic price need not be interfered with. Besides, based on the changes in Government policy and iron ore trade dynamics, OP 1 had also been changing its pricing policy from time-to-time. Since the international market shifted to fixing the prices on quarterly basis, instead of annual system prevalent till 2009-10, OP 1 also started fixing prices for its domestic long-term customers on quarterly basis with effect from 01.04.2010 along with export contracts. Every e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court. 9. With regard to section 3 of the Act, the informant stated that OP1 (in its board meeting held on 16.04.2012) decided that Joint Plant Committee (JPC) would be collecting and furnishing price data to OP 1 so as to enable it to have a long term pricing methodology. This, along with existence of price parallelism resulted in a collusion under section 3 (3)(a) of the Act. Further, the informant alleged contravention of section 3(3)(b) of the Act stating that OP 1 restricted the supply of iron ore to steel manufacturers by creating artificial scarcity through concerted actions with other opposite parties. Therefore, the informant alleged a case of limiting production by the merchant miners to fetch high prices. OP 1 refuted the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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