Andrew Forrest has been very brave or very foolish
Fortescue Metals Group founder Andrew Forrest has been very brave or very foolish in flagging his willingness to put a cap on iron ore production to help support higher prices. The bigger danger for Forrest is not possible action by Australia's regulators but the possibility of non-Australian interests moving against him, Fortescue or any other producers deemed to have participated in a conspiracy to ramp up prices. An earlier generation of mining industry executives feared travelling overseas because of their alleged involvement in a uranium price rigging conspiracy. What became known as the Westinghouse litigation involved a US antitrust suit in which treble damages were sought against 29 US and foreign companies, including four companies - CRA, Mary Kathleen Uranium, Pancontinental Mining and Queensland Mines - operating in Australia. This happened after Westinghouse, the largest supplier of uranium to US nuclear power plants, could no longer fulfill its fixed price contracts because prices had risen so much. The US$7 billion action was one of the most expensive law suits in US legal history.
John Robertson is Chief Investment Strategist for PortfolioDirect a provider of resource sector investment stock ratings and portfolio strategies for mining and oil and gas investors. He has worked as a policy economist, corporate business...
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