Tony Abbott has rebuffed calls from mining magnate Andrew "Twiggy" Forrest for a cap on iron ore production, saying Australia supports the free market.
The Fortescue Metals boss says the world's largest iron ore miners should cap production to stop the dramatic slide in prices.
Mining giants such as Rio Tinto, BHP Billiton could push the price from below $US55 a tonne back up $US90, he said.
The prime minister wasn't aware of Mr Forrest's comments - made at a business dinner in China - when quizzed by reporters in Canberra on Wednesday.
"Nevertheless, we are a trade exposed-economy and we support free markets," he said.
"Obviously, in a free market prices can go down as well as up and that has consequences."
Mr Forrest's comments have captured the attention of the competition watchdog.
Treasurer Joe Hockey, in rejecting Mr Forrest's comments, said the government did not support cartels.
He noted that BHP made its first shipment of iron ore to India a few months ago, but a lack of infrastructure was hindering exports.
"Anything we can do to help to build port infrastructure in India with the Indian government ... is actually going to be to our advantage," he told reporters in Canberra.
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