SYDNEY, March 25 (Reuters) - Fortescue Metals Group is calling on its competitors to cap production of iron ore in hopes of triggering a recovery in slumping prices, according to media reports.
Fortescue chairman and company founder Andrew Forrest told a business gathering in Shanghai late Tuesday he was “absolutely happy to cap my production right now” at 180 million tonnes, the Australian Financial review reported.
Forrest said other major miners Rio Tinto , BHP Billiton and Brazil’s Vale should also cap their production “and we’ll find the iron ore price goes straight back up to $70, $80, $90 (a tonne).”
“I‘m happy to put that challenge out there. Let’s cap our production right here and start acting like grown-ups,” he said.
A Fortescue spokesman was not immediately available to comment on Forrest’s reported remarks.
Fortescue currently produces about 155 million tonnes of iron ore a year, making it the fourth largest producer in the world.
Iron ore prices have been cut in half in the last year as rising supply collided with weakening demand growth in top buyer China. On Wednesday the price stood at $55.60 .IO62-CNI=SI.
Big miners have resisted calls in the past to slow down expansion work that has seen output increase by tens of millions of tonnes over the past year.
Rio Tinto Chief Executive Sam Walsh has said iron ore mining has become a “survival of the fittest” business, where only the largest producers were likely to prosper.
Fortescue, Vale, Rio Tinto and BHP added 234 million tonnes of iron ore in the past two years - five times yearly U.S. consumption - and intend to inject another 196 million tonnes by 2020.
A spokesman for Rio Tinto had no immediate comment, while BHP was not immediately available for comment.
Reporting by James Regan; Editing by Richard Pullin