Following comments made by Andrew Forrest, chairman of Australian miner Fortescue, calling on major iron ore producers to implement a production cap to increase iron ore prices, as reported by Australian Financial Review, the Australian Competition and Consumer Commission (ACCC) has asked Forrest to explain his potential cartel call.
"The ACCC will be looking closely at Mr. Forrest's comments and the context in which they were made. In general terms, any attempt by Australian businesses to encourage competitors to restrict outputs is a matter of grave concern to the ACCC. Ultimately, any success in increasing the price of iron ore in an anti-competitive way would be expected to lead to an increase in prices that Australian consumers pay for items such as white goods and cars," said ACCC chairman Rod Sims.
Additionally, Fortescue CEO Nev Power said a depressed iron ore price was not in the interests of customers, shareholders of any Australian iron ore exporter, nor in the interests of the governments of Western Australia and Australia.