Fortescue's Andrew Forrest calls for iron ore production cap, page-5

Hi Lion2009,

BHP & RIO pay for the right to extract the mineral via royalty payments.

People need to get over this notion that $120-$180p/t IO was somehow normal. That price was an outlier that came about due to Chinese expansion and a supply shortfall.

That shortfall has now been made up and no one should be surprised about that. Higher prices incentivize a supply side response, textbook economics.

If BHP & RIO didn't make up the shortfall, other mining companies in overseas jurisdictions would have, and the price of the commodity would have still ended up falling to marginal cost.

The only difference is that the jobs and revenues created from the expansion in Australia would've taken place overseas and our country would be worse off. Trying to hold the IO price so far above marginal cost and not expecting supply side reactions in other parts of the World is the stuff of dullards.

The "Australian people" can't mine and export the ore. Without companies developing and exporting the ore, it's worthless. Iron ore creates no jobs or tax revenue sitting in the ground.

If you want to be angry with someone, be angry with successive State and Federal Governments which treated the once off mining boom as the norm, and entered into structural expenditure around cyclical boom time revenues.

Good luck!