UPDATE 2-Australia's Fortescue urges iron ore output cap, upsets regulator
* Australia's Fortescue calls on rivals to cap iron ore output
* Fortescue founder says ore price will rise in response
* Australia's competition regulator says holds "grave concerns" (Adds Fortescue ceo comments, updates shares)
By James Regan
SYDNEY, March 25 (Reuters) - Australia's Fortescue Metals Group called on iron ore miners to cap production in the hope of reversing a dramatic fall in prices, triggering a probe by Australia's competition regulator.
Fortescue founder and chairman Andrew Forrest told a gathering in Shanghai late Tuesday he was happy to challenge rivals to "cap our production right here and start acting like grown-ups."
The comments come as a glut of ore, along with slower Chinese demand growth, has slashed prices, hampering efforts by the world's fourth-largest iron ore miner to refinance $2.5 billion in debt and sending its shares to six-year lows.
Australian competitors BHP Billiton and Rio Tinto declined to comment, but have consistently outlined a strategy of ramping up production
The Australian Competition and Consumer Commission (ACCC) said on Wednesday it would investigate Forrest's remarks. Australia has penalties of up to 10 years in jail for individuals involved in cartel behaviour and heavy financial penalities for companies. Continuación...