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Australian consumer watchdog probes mining magnate's call for iron ore output cap

Xinhua, March 25, 2015 Adjust font size:

Australia's competition watchdog launched an investigation on Wednesday into comments by mining company executive Andrew Forrest calling for miners to cap production and push up iron ore prices.

Fortescue Metals Group (FMG) Chairman Forrest told a business dinner in Shanghai on Tuesday that his company along with BHP, and Rio Tinto "should cap our production now and we'll find the iron ore price will go straight back up to $70, $80, $90 ..."

Australian Competition and Consumer Commission (ACCC) Chairman Rod Sims said Forrest's proposal could breach competition laws.

Sims told the Australian Broadcasting Corporation that even attempting to cap pricing, or fix pricing, is illegal.

"We propose to make contact immediately with Mr Forrest and his company to get more detail from them."

"The law says that not only can't you do things that are a breach of the competition provisions of the Act, but you can't attempt to do them."

Forrest told the Shanghai meeting that China would not mind paying more if it meant FMG and even smaller companies survived instead of the big three miners gaining complete control of the market.

Commentators have said that FMG could struggle to survive if iron ore prices stay as low as they are. Endi