Mining magnate Andrew “Twiggy” Forrest says the world’s largest iron ore miners should cap production to stop the dramatic slide in prices.

Forrest told a business dinner in Shanghai that he would be happy to cap production for the company he founded, the fourth biggest iron ore exporter Fortescue Metals Group, at 180 million tonnes, Fairfax Newspapers report.

The 50 per cent slump in iron ore prices in the past year to below $US55 a tonne has slashed Fortescue’s earnings and cashflow, sending its share price down 27 per cent this year.

Fortescue also recently scrapped a $US2.5 billion ($A3.17 billion) high-yield bond issue.

Forrest said the major miners, Rio Tinto, BHP Billiton and Brazil’s Vale, should cap their production in what is an over-supplied market, helping push the price “straight back up to $US70, $US80, $US90”.

“I’m happy to put that challenge out there: let’s cap our production right here and start acting like grown-ups,” he said.

While a slowing China was benefiting from lower commodity prices, steel mills there were also concerned about a lack of competition and a few companies dominating the market if smaller producers were priced out, he said.

Previous suggestions of capping production have led to criticisms that it would constitute a cartel.

Iron ore is Australia’s biggest export earner.