Competition Comm rules out unfair trade practices by NMDC

Fair trade regulator CCI has ruled out allegations of anti-competitive practices against National Mineral Development Corporation with respect to mining activities and production of iron-ore in Karnataka.
A complaint filed with CCI by Karnataka Iron and Steel Manufacturer's Association (KISMA) accused the state-owned company of abusing its market dominance by limiting production of the iron ore to the level lower than the approved capacity of mines as well as charging higher prices.
The association had further contended that NMDC did not follow any consistent method to determine base prices of iron ore and that it frequently changed the price determination criteria to maximise its revenue.

However, in an order today, Competition Commission of India (CCI) said there did not exist "a prima facie case for causing an investigation to be made by the Director General in the matter.
"...There is no evidence/material to lead to a prima facie inference that opposite party (NMDC) was abusing its dominance to the detriment of its consumers".
It added: "The mining activities and subsequent pricing of iron ore were being done as per the orders of the Supreme Court and under the supervision of Supreme Court appointed monitoring committee."

The Supreme Court had banned mining in areas including Bellary disctict of Karnataka by its orders in July, 2011.

Later, the apex court had allowed NMDC to resume mining operations in Bellary subject to the condition that the entire production from Karnataka should be sold by way of e-auction.
"...Opposite party (NMDC) was producing iron ore in the state of Karnataka under the orders of the Supreme Court, and, neither it was selling nor fixing the sale price of iron ore in the state of Karnataka of its own but in compliance of order of the Supreme Court," the fair trade regulator said.
KISMA had alleged that NMDC had got the monopoly in iron ore mining due to a Supreme Court order wherein the previous ban imposed on all mining activities in Bellary district in Karnataka was relaxed for the iron ore miner.

It was alleged that as a result of exclusivity of operations, NMDC was trying to limit its production to the level lower than the approved capacity of mines and was charging higher prices, taking advantage of its position of strength in the market.