Australia: ACCC won’t pursue Fortescue over call to cap iron output

Australia’s anti-trust watchdog said on Thursday it will not take any action against Fortescue Metals Group for comments by its chairman last month urging bigger rivals to join it in capping iron ore output to shore up prices.

Fortescue Chairman Andrew “Twiggy” Forrest upset the Australian Competition and Consumer Commission in March after he said at a dinner in Shanghai he was happy to challenge rivals to “cap our production right here and start acting like grown-ups”.

Forrest’s comments came as iron ore prices had sunk below $55 a tonne, heading toward decade lows amid a glut spawned by the big four producers, including Fortescue, just as demand growth in major customer China cooled.

Commission Chairman Rod Sims immediately launched an investigation and said on Thursday he accepted that the comments were “hypothetical” and meant to spark a policy debate about the long-term future of the iron ore industry.

“In deciding not to take further action on the comments that have been made, the ACCC has taken into account Fortescue’s position that Mr Forrest’s comments were made ‘off-the-cuff’ in response to audience questions,” Sims said in a statement.

Full content: Financial Review

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