COMPetition LAw

Competition in the Mining Sector

Iron Ore and Steel Industry

Srinivas Atreya4th Year

March 2013

Introduction

“Natural resources” is a catch-all term which covers a wide industry sector and concerns activities related

to exploration and exploitation of oil, gas, metals and minerals, etc., More specifically, the mining industry

in India covers an array of 89 minerals and metals which are dividend into fuel minerals, metallic minerals,

non metallic minerals and minor minerals. In India, 80% of mining is in coal and the rest in various metals

and other raw materials such as iron ore, gold, copper, iron, lead, bauxite, zinc and uranium. A large part

of these metals and minerals are utilized as raw materials in a range of industries such as steel, railways,

cement and power plants.

The Indian mining sector has a large and over-bearing presence of public sector companies that account

for over 80% of the total value of minerals produced. The mining and quarrying sector accounted for

about 2.67% of the total GDP. The major mineral industries are dominated by large integrated players

with interests from mining to metallurgy and processing such as NMDC in iron ore, SAIL and Tata Steel in

steel and Hindalco and Nalco in aluminum.

Major minerals come under the purview of the Central Government while minor minerals are separately

notified and come under the purview of State Governments. The Mines and Minerals (Development and

Regulation) Act, 1957 and the Mines Act, 1952 are the relevant central legislations governing the mining

sector.

More than two decades after liberalization, keeping in mind the importance and scale of the mining

industry, the pertinent question is whether the state-controlled regulation is still an effective model in the

present global scenario to promote healthy competition. The objective of this paper will be to identify the

industry dynamics and realities and the factors affecting competition in this area. Another relevant

question will be to assess how the new competition regulation has affected and will continue to affect this

industry sector. As the mining industry encompasses a number of specific industries, the primary focus of

this paper will be on the Steel and Iron Ore Industries.

Relevance of Competition Law

Competition law has two main strands - merger control and regulation of market behavior which are most

relevant to the mining industry worldwide.

For instance, In Europe, there have been a number of mergers in the non-renewable natural resources

sector which have attracted the attention of the European Commission. The most notable recent deal was

the proposed acquisition of Rio Tinto by BHP Billiton. This hostile bid attracted scrutiny from competition

regulators globally. Although clearance was obtained from the US, Australia, and South Africa (subject to

some conditions), it was expected that the European Commission would have required some divestments

which, given the changing market conditions, would have made the deal too risky, and it was abandoned.

On the other hand, The EU competition behavioral rules cover illegal agreements and abuse of a

dominant position. The typical concept of an illegal agreement is that of a cartel between competitors,

aimed at increasing prices. There are many examples of such cartels in the natural resources sector. For

instance, In South Africa, the Competition Commission began investigating a potential cartel for the

supply and pricing of piped gas. In December 2008, the French Competition Council imposed fines of

€575.4 million on 11 companies for participating in a five-year steel-trading cartel.

Importance of competition regulation in the Mining Industry

In the natural resources sector, there may be numerous arrangements that should be screened for

competition law compliance. As an example, it is common for mine operators to enter into long-term

arrangements with third party smelters and refiners for the exclusive supply of all goods produced from

the mine. Long-term exclusive supply arrangements are generally not permitted under EU competition

law, unless there is some form of objective justification. In the case of this type of arrangement, a possible

justification is that long-term security of supply is necessary to ensure the necessary level of investment

to finance the mining operations. Such an agreement could, however, be open to challenge. Whether

merger control or behavioral rules apply, the way in which the market is defined will almost always be a

key issue. As a basic rule of thumb, unless merging parties, or parties to an agreement, have a significant

share of the market, their activities are unlikely to attract the censure of competition law.

For abuse cases, simply put, there can be no case without market power. In order to assess the level of

market power that exists, the boundaries of the market in which the relevant entities operate must first be

identified. In the natural resources sector, as with many other sectors, there are quirks to market

definition. Taking mining as an example, each stage of the mining process, from extraction, to refinement,

to the generation of end products is likely to constitute a separate market. The characteristics of a

particular mineral might mean that there are separate markets according to its end use, or the grade of

the raw materials. From a geographic perspective, although many minerals are globally traded

commodities, distinctions may be drawn between domestic supply and global shipment markets.

Iron Ore Industry

Iron ore is used as a raw material mainly for making pig iron, sponge iron and steel. Iron and steel

together for the largest manufactured products in the world and each of them enters into every branch of

industry. The production of iron ore constituting lumps, fines and concentrates was at 208 MT in the year

2010-11. In the same year, about 104.05 MT of iron ore was consumed in various industries like iron and

steel, sponge iron, Ferro-alloys, alloy steel, coal washery, and cement. The domestic production is likely

to touch 140 million tons (MT) in 2012-13, an 18 per cent decline year-on-year. A similar production level

was seen earlier during 2004-05. It had peaked in 2009-10 to 220 MT. Public sector companies

like NMDC and SAIL produce 25-30 per cent of India’s output. The production of iron ore production has

declined sharply since 2011-12 following the closure of several mines in Karnataka and Goa.

For instance, 316 iron ore mines were recorded in 2010-11 as against 320 in the previous year. Among

them, 33 mines were in the public sector and 283 in private sector. Among the 33 public sector mines, 15

mines each producing more than one million tons annually account for 96% of the output in public sector

and 27% of the total production in the country during 2010-11. (5 in Chhattisgarh, 4 in Odisha, 3 in

Jharkhand and 3 in Karnataka). The contribution of public sector to the total production was about 28%

as against 27% in the preceding year.

From the supply side, today, the iron ore market is divided into the following segments:

1. Merchant mining companies in the public sector such as NMDC, OMC OMDC etc. who sell

iron ore either at market based or government determined prices.

2. Merchant mining companies in the private sector who sell iron ore at market based prices

3. Steel producers’ captive mines.

From the demand side of the market, the market is segmented in the following way:

1. Iron and steel companies making use of their own captive resources mined directly or

indirectly at the actual cost of mining (plus freight)

2. Iron and steel companies obtaining assured allocations from NMDC or any other government

company at prices fixed by the concerned iron ore company with or without the government

clearance/approval.

3. Iron and steel companies buying partly or fully their requirement from the merchant mining

companies/traders at market prices.

In terms of supply assurance, the steel producers with captive mines are best placed followed by those

with assured allocations from the merchant mining companies in the public sector. The iron and steel

companies who have to depend on the market are the worst placed. Among them, those with long-term

arrangement with then iron ore miners are placed better.

The year 2012-13 saw a massive drop in iron ore production due to the suspension of mining leases in

Karnataka and Goa. The ban has had an adverse effect on iron ore exports and industry reports have

predicted pegged iron ore exports to drop sharply by 62% to about 45 million tonne as against an all time

high of 117 million tonne in FY11. In FY12, India exported 61.8 million tonne of iron ore, showing a

decline of 36.7% over the previous year.

As regards to the price of iron ore, the pricing is internationally benchmarked with miners such as NMDC

and Sesa Goa. As the country’s largest producer and supplier, NMDC has been in a position to dictate

the pricing of iron ore as a large number of secondary manufacturers are completely reliant on NMDC for

their raw material.

However, following the ban on mining, drop in production of iron ore has resulted in rapid fluctuations in

price both domestically and internationally. In the Domestic market, the majority of the steelmakers rely

on NMDC for iron ore. Therefore, NMDC has also been in a position to determine the pricing of iron ore.

In August 2012, NMDC hiked iron ore prices by 13% following which the price of lumps with 65 per cent

iron content reached Rs 6,100 a tonne and up to Rs 3,000 a tonne for fines containing lesser iron. Even

before the hike, several allegations were made by steel manufacturers regarding the arbitrary change in

the pricing policy of NMDC for January – March 2012. Although, prices were subsequently cut in

November 2012 by 2-11%, there has been growing criticism and apprehension regarding the volatility of

prices and the under supply of raw material in the domestic market.

On the other hand, the export market also suffered large deficit of supply of iron ore. Global prices have

since fluctuated and according to Bloomberg data, in January 2012, the price of iron ore fines in China

stood at $145 per tonne. This came down to $98 per tonne by August-end. In September 2012, the price

was hovering around $105-108 per tonne. By November, the price had increased to $135. Currently, the

price has stabilized at around $145. The rapid rise in the international market can be attributed mainly due

to the slump in exports from India.

The Competition Commission of India has investigated various complaints and industry practices in the

Iron ore sector over the past few years. In All Odisha Steel Federation v. Orissa Mining Corporation1, the

complainant alleged abuse of dominant position and arbitrary pricing of iron ore under section 4 of the

Competition Act. However, the commission was unable to find a prima facie case. More recently, in

Sponge Iron Manufacturers Association v. NMDC & Ors2, the complainant alleged violation of section 3

and 4 of the Competition Act. The allegation was that NMDC, the largest mineral producer abused its

dominant position and affected competition in the iron ore production market in India. The main

contentions were related to unfair and discriminatory pricing between domestic and overseas buyers and

imposing unilateral and arbitrary conditions in contracts. The commission taking into account the market

share of NMDC and the other prevailing circumstances found that it was not a dominant player and held

that there was not prima facie case of anti competitive practices.

1 Case no 13/20122 Case no 69/2012

Despite the findings of the CCI in these cases, concerns regarding supply and pricing still remain as

industries dependent on Iron ore continue to suffer from shortage and volatile prices in the shadow of a

slowing economy.

Coal Industry

Coal is the primary source of supply of commercial energy in India and ranks third amongst the primary

producers of coal in the world. However, coal has the largest domestic reserve base and the largest share

of India’s energy production and consumption. As on June 2010, coal accounted for 82.4% of the total

thermal generating capacity in India, representing approximately 52.4% of India’s total energy needs

followed by oil and gas at 41.6 per cent. Coal production in 2009-10 was 535.23 MT, compared to 385.02

MT in 2007-08.

The coal industry is dominated almost entirely by two large public sector enterprises, Coal India Limited

(CIL) and Singareni Collieries Company Limited (SCCL), and they account for almost 93% of the total

production in India. Coal (coking or non-coking) has limited private participation in the supply side and it

is sold to the steel companies at administered prices by government owned Coal India Ltd. Steel

companies have been forced to import raw material due to falling supply within the country . Coking coal

suppliers have considerable influence on the steel industry as India imports more than 70% of its

requirement. The demand for coking coal will increase as new steel capacity comes online, such that

India’s coking coal requirement is expected to reach 90 million tonnes by FY20. India is a net importer of

coking coal, importing 23 million tonnes of coking coal in 2010 to meet its total requirement of around 40

million tonnes.

There are several barriers to entry in the form of regulatory and policy barriers. Further, several instances

of abuse of dominance have been alleged against CIL for arbitrary supply and unilateral and unjustified

pricing. Most recently, the CCI is reported to have found evidence regarding abuse of dominant position

by CIL and its subsidiaries.3 The complaints allege supply of low quality coal at higher prices while placing

non-transparent contract conditions and quality and other supply parameters. Other impending issues that

continue to plague the coal industry relate to the complicated regulatory framework as well as an opaque

and ineffective allocation of coal blocks. Amending the coal policy and updating the inadequate data on

3 http://www.thehindubusinessline.com/companies/coal-india-arms-may-have-abused-dominant-position/article4469580.ece

coal reserves to encourage private sector participation and increasing captive mining would improve the

production and the competition scenario in this sector.

Steel Industry

Development of the Steel Industry

Steel plays a critical role in infrastructure and overall economic development and the health of the steel

industry is often considered as an indicator of economic progress. It is common today to talk about "the

iron and steel industry" as if it were a single entity, but historically they were separate products.

The Steel Industry in India was under a strict framework of regulation until 1992. Post liberalization, the

steel industry began experiencing a new era of development. Large plant capacities that were reserved

for public sector were released. Export restrictions were eliminated and import tariffs were reduced from

100 percent to 5 percent along with de-control of domestic steel prices. More significantly, foreign

investment was encouraged, and the steel industry was part of the high priority industries for foreign

investments and implying automatic approval for foreign equity participation up to 100 percent.

As a result, the domestic steel industry has since then, become market oriented and integrated to a large

extent with the global steel industry. This has helped private players expand their operations and bring in

new cost effective technologies to improve competitiveness not only in the domestic but also in the global

market. The Indian steel industry, with a production of about 1 MT at the time of independence, has come

long way to reach the production of about 57 MT in 2006-07. During the last decade more than 12 MT

(million tons) of capacity has been added in the steel industry. The contribution of the private sector in the

total output has also increased in India and the development of private sector has caused high growth in

the capacity, production, export and imports of steel industry. The entry of foreign players in the Indian

market has also had a major impact and the steel industry has been receiving significant foreign

investments from multinational companies like POSCO and Arcelor-Mittal Group

Major Producers/Market Players

Broadly, there are two types of producers in India viz. integrated producers and secondary producers.

Integrated steel producers have traditionally integrated steel units have captive plants for iron ore and

coke, which are main inputs to these units. Currently, there are three main integrated producers of steel;

Steel Authority of India Limited (SAIL), Tata Iron and Steel Co Ltd (TISCO) and Rashtriya Ispat Nigam

Limited (RINL). Of the three, SAIL is the largest owing to its large steel production capacity plant size.

After liberalization, on the account of active participation of private sector in the steel industry, public

sector share in the total production started dwindling. In 2003-04, share of public sector in the finished

steel production (alloy & non-alloy) was 28 percent, which was reduced to 23 percent in 2006-07.

Secondary producers use steel scrap or sponge iron/direct reduced iron (DRI) or hot briquetted iron (HBI).

It comprises mainly of Electric Arc Furnace (EAF) and Induction Furnace (IF) units, apart from other

manufacturing units like the independent hot and cold rolling units, rerolling units, galvanizing and tin

plating units, sponge iron producers, pig iron producers, etc. Secondary producers include Essar Steel

Ltd., ISPAT Industries Ltd., and JSW Steel Ltd. There are 120 sponge iron producers; 650 mini blast

furnaces, electric arc furnaces, induction furnaces and energy optimizing furnaces; and 1,200 re-rollers in

India.

Production

Steel Production has been expanding rapidly in India in recent decades. As per the recent figures

released by the World Steel Association (April 2011), India has emerged as the fourth largest steel

producing nation in the world, with a total of 69 million tons crude steel production in the year 2010-11.

Crude Steel production in India has increased by a compounded annual growth rate (CAGR) of 8 percent

over the period 2002-03 to 2006-07. India’s production grew constantly in the last five years from 57.8 MT

in 2008 to 63.5 MT in 2009, 69 MT in 2010, 73.6 MT in 2011 and 76.7 MT in 2012.

According to the end use, steel is categorized into structural steel, construction steel, deep drawing steel,

forging quality, rail steel etc. The production of finished steel stood at 66.01 million tonnes during 2010-11

as against 46.57 million tonnes in 2005-06, a CAGR of 7%. The integrated producers constitute most of

the mild steel production in India and the main finished products include flat steel products such as Hot

Rolled, Cold Rolled and Galvanized steel, long steel and special steel. The top six segments: Bars &

rods, structural’s, HR coil/strips/scalps, cold rolling coils/strips, plates and GC/GP sheets, contributed

about 93.50 percent of total finished steel (non-alloy) production in 2006-07.

The finished products sector is highly diversified due to a large variety of products. Interestingly, certain

products have markets with several competitors while certain products have literally not competition with

only one or two producers.

For instance, in the Bars and Rods segment, 70% of production came from secondary producers. Around

55% of HR coils/sheets were produced by secondary producers although SAIL is the largest producer

with 36% share. The structural’s segment is also dominated by the two PSE’s SAIL and RINL, although

the share of the secondary players has been growing from 64% to 77%. CR coils are mainly produced by

Tata Steel and SAIL with a combined market share of over 52%. This CR coils sector is highly

oligopolistic with the top four producers responsible for 85% of the total production. Plates constitute 7%

of the total finished production and SAIL dominates the market with over 71% production. GP Sheets

constitute 9% of the finished production and the main producers are Tata Steel and SAIL. With regard to

imports, the top six steel products were responsible for 73% of the imports. In the export market, GP

sheets are responsible for 30% of the total steel exports. GP sheets, HR coils and CR sheets together

constitute almost 70% of the total exports in 2006-07.

The Indian Steel Industry, taking into account all the various finished products, is dominated largely by

SAIL and Tata Steel, followed by relatively smaller producers like JSW Steel and Essar Steel. However,

small and medium scale industries have gained a significant market share over the last decade.

Secondary producers have accounted for around 60% of HR coils production in the period between 2002-

07. However, the production share has fallen over the period between 2009-12 owing to receding demand

as well as increase in production costs.

The global steel industry has been on a roller coaster since 2007. The booming market of 2004–07

rapidly declined during the global financial crisis. As a result, demand from the key steel end use markets

— infrastructure, construction and automotive — contracted by 7.4% year-over-year. The extreme lows of

2009 were followed by a steady recovery in demand and associated production, as well as a re-stocking

period. During 2010, global demand for crude steel rebounded to 2008 levels as investment in

infrastructure and other steel-intensive projects increased. Some of this recovery can be attributed to the

timely intervention of the governments of major economies, which provided stimulus packages to arrest

the economic crisis and effectively brought forward future steel demand.

Competition Issues in Steel Industry

Several forces determine the resilience of the Indian steel industry and its competitive position. Industry

competition is minimal as the Indian steel sector is a suppliers’ market, with excess demand met by

imports — cheaper steel from China and specialty steel from South Korea and Japan. About 47% of

crude steel production can be attributed to four major players: SAIL, Tata Steel, JSW Steel and RINL.

These companies are expected to contribute to the majority of new capacity through their brownfield

projects. However, several multinational steel companies are keen to enter the Indian steel market. Once

they set up their operations, there will be greater competition for resources, talent and market share.

The two biggest barriers to entry in the Indian steel industry are the financial outlay involved in setting up

a steel plant, the extended set-up period due to the challenges of land acquisition and other regulatory

procedures. These issues have deterred many global steel producers in the past, with many now

undertaking joint ventures with established Indian steelmakers. A complicated regulatory regime in India

makes execution and implementation of projects difficult, evidenced from the unsuccessful efforts of

Arcelor-Mittal to set up their Greenfield project.

Although the market share of the main steel producers is not large enough for total business control.

However, taking into account the total number of steel producers (only around 750) and their production

capacities, the main producers are still in a position to dominate the market and dictate prices.

Fragmented customer base drives pricing as more than 60% of the demand or the steel in India comes

from the construction and infrastructure sector. However, the supply side is more consolidated than the

end user segments, giving it a greater influence over pricing levels.

Steel prices have no formal controls or regulations and they are driven by the market. However, due to

market imperfections and allegation of cartelization, the producers of these finished products have a

greater degree of market power vis-à-vis the buyers increasing the risk of anti-competitive behavior. The

finished products market is highly fragmented and there are several types of products and each product

must be examined separately.

For instance, several allegations of abuse of dominance and cartelization have been laid against the

major steel producers in the HR coils market and the pricing behavior can be a reflection of collective

action of dominant players. It is interesting to note, in the context of the points raised by the HR Coils

user industries, between 2003-04 and 2005-06, although the actual production of HR coils/sheets and

plates (Hot strip mill or Sheet mill products) increased by 21.6 per cent in the course of two years

domestic sales increased by 8.25 per cent only. The share of domestic sales in total production of these

products dropped from 72 per cent in 2003-04 to 64.1 per cent in 2005-06. In 2007-08, while the

merchant apparent consumption of HR coils (not considering the captive use) increased by 12.6 per cent

over the previous year, the domestic production for sale dropped by 0.65 per cent. At the same time

exports of HR coils remained fairly high at 1.39 million tonnes, although dropped 7.8 per cent from the

previous year as a result of government interventions and discouragement through policy measures. The

erratic pricing of HR coils has continued through 2012 and according to the Federation of Industries of

India (FII) — the industry body of ancillary steel producers — SAIL increased HR Coil prices by Rs 4,500

per tonne in a span of one week only (between February 1 to February 7 2012. Although it is difficult to

establish a prima facie case of abuse or cartelization, pricing behavior can exhibit a pattern reflected in

the timing of the pricing decisions and quantum of price changes each undertakes. In later part of 2012,

the CCI began a probe into alleged cartelization in the steel industry and several steel producers like

Essar Steel and JSW Steels are part of an ongoing investigation for alleged cartelization and price fixing.

In the 2010 case of Competition Commission of India v. SAIL & Anr4, the Supreme Court effectively

circumscribed the boundaries of exercise of power by both the Competition Commission of India

(CCI/Commission) and the Competition Appellate Tribunal. The case related to a complaint before CCI

alleging anti-competitive practices and abusive behavior by SAIL while it entered into an exclusive supply

agreement with Indian Railways.

Mergers and Acquisitions

While consolidation in the steel industry is one of the most prominent trends at a global level,

developments in India have not been significant. However, the Indian steel behemoths have been able to

strengthen their position globally with several overseas acquisitions. For example, Tata Steel has

acquired Corus and Essar Steel has picked Algoma. There are important acquisitions by Ispat Industries,

JSW Steel, JSPL ( Bolivian Mines ) as well. More recently, NMDC acquired a stake in the Australian

Legacy Iron Ore.

The effects of consolidation in the industry globally are being slowly established in the steel market as

steel prices are seen to be holding firm even at times when the demand is low or the market is faced with

excess supply. Pertinent questions in this are relate to the role of the consolidated industry and its

increased market power in the context of the phenomenal price rise observed in the past couple of years.

A risk of consolidation is that the steel majors globally may collude together to control prices and market

shares to mutual advantage or create artificial shortages. While the consolidated steel industry is in

command, the iron ore and coal industries globally are far more consolidated and with their oligopolistic

control over the market have been able to continuously raise prices irrespective of the actual demand

supply conditions in the market. As with the case of these raw materials industry, in steel too, the smaller

and marginal players are finding it more convenient to merely follow the leaders instead of attempting to

grow competitively.

Inter-dependence of Industry Sectors (Iron Ore - Coking Coal – Steel)

4 CA No. 7779/2010

Vertical Integration

The major players such as TATA Steel and SAIL are vertically integrated to secure raw materials. For

example, Tata Steel is 60% self-sufficient in iron ore and 100% self-sufficient in coking coal supply. SAIL

is self-sufficient in iron ore but imports most of its coking coal requirement. The rest of the players in the

Indian steel industry have varying degrees of self-sufficiency, still depending on raw materials to meet

their requirements. For the non-integrated players, the cyclical and volatile nature of prices of iron ore and

coking coal have been a major source of concern leading to under-utilization of production capacity.

Control Over Natural Resources and Captive Mines

While cartelization cannot be established with facts and in the context of the existing competition laws in

the country, there are larger concerns in the steel industry about competition issues when it comes to

differential pattern of access of raw materials such as iron ore, coal, manganese ore and chromium ore,

etc. Iron ore and Coal, therefore, are the most important minerals in the context of captive mining and the

connected policies lie at the centre of competition issues in the iron ore and steel market. All these have

created differential advantage to the steel makers. Captive mining historically arose from steel enterprises

starting iron ore or coal based production when there were no independent mining enterprises in the

relevant areas. In addition, such action was more valid in the context of administered pricing regimes of

the past. In such a situation when the output price is regulated based on costs, it did not matter, whether

raw materials such as iron ore or coal are mined by the steel producers or were bought from an external

agency mining independently at a market determined or administered price. However, the relevance of

continuation of such a system needs to be reviewed when there are no restrictions on the output (steel)

prices and free market conditions prevail in that market. One needs also to study the host of distortions

that arise in the market of iron ore, which, in turn, are reflected in the economics of steel production and

consequently raise intra-industry competition issues in the steel market.

Historically, Tata Steel and SAIL got into steel production based on iron ore mines leased out to them on

a captive basis. Other than them, the country had steel production only from scrap-based units who had

nothing to do with iron ore. What is relevant in this context is that there is no economic reason why there

should be a discretionary policy favoring captive allocation or administered price of a product when there

exists at the same time a competitive market where demand and supply conditions determine prices. Also

relevant is the issue associated with captive mining is that till now is related to the size of the lease

holding and the command over the resources extended. In this case, the large vertically integrated SAIL

and Tata Steel have an undue advantage over the other competitors. In a situation when there is

apparently a shortage with limitations being seen in expansion of production, significant resources are

getting locked up under the lease holding of a few companies which in turn in creating a shortage of

capacity and subsequent rise in the prices of iron ore in the open market.

Conclusion

From a competition policy perspective, the Indian Steel and Iron Ore Industry is a mixed bag. Although

there is no evidence of any formal agreements to fix prices or any other major anti-competitive practice as

a whole, there are areas of high concentration in certain product markets like HR coils. Further, prima

facie evidence of cartelization and certain other anti competitive practices such as price fixing have been

found in these concentrated product markets. Another major concern is the allegations against the state-

owned steel makers who are in a dominant position in the market by virtue of their production capacities

and access and supply of raw materials.

Even if the industry did not exhibit any anti-competitive behavior, the government’s approach to steel

prices is based on the assumption that a few steel producers have sufficient command over the market

and that they can uniformly cut prices to fulfill the intended objective. Although the government should be

taking measures to bring in competitive efficiency by conscious interventions to eradicate market

distortions, the effect of the government policy is causing the opposite of that in most cases, bringing in

more distortions than competition.

Keeping in mind the importance of mining and heavy industries to economic growth, competition issues

must be studied more closely in consonance with the global industry trends and growth patterns because

a competitive market condition is a pre-requisite for the competitive and sustainable growth of the industry

and the economy.

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http://www.livemint.com/Companies/Vv3oajXSs8AoPB2cDsVzDO/EU-fines-steel-producers-518-

mn-euros-for-cartel.html

http://www.indianexpress.com/news/nmdc-cuts-iron-ore-price-by-11-/1013724/0

http://www.business-standard.com/india/news/nmdc-aims-48-mn-tonne-per-annum-iron-ore-

production-capacity-by-fy15/196220/on

http://www.thehindubusinessline.com/companies/sail-essar-steel-deny-charges-of-cartelisation/

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verma

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ore/196610/on

http://www.thehindubusinessline.com/companies/domestic-steel-makers-paying-more-for-nmdc-

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http://www.livemint.com/Companies/VDlKcYvHzJhYoKzo1B9I6M/NMDCs-production-drops-7-

shortage-to-hit-steel-makers.html