BHP Billiton and Fortescue Metals have applied for permits to add about 50 million iron ore tonnes to an already over-supplied global market as prices fell to new record lows.
Iron ore giants including BHP and Rio Tinto are being accused of increasingly angering shareholders and deliberately foregoing earnings by flooding the market.
Spot iron ore prices to the port of Tianjin in China fell to $US51 a tonne, which could be below Fortescue's breakeven price and is a record low since prices started being tracked in 2008.
It also emerged that BHP and Rio had applied to Western Australia's Environmental Protection Authority to boost Pilbara output - by building a new mine in BHP's case and expanding Christmas Creek in the latter's.
Commodity forecasters are lining up to slash their price forecasts for Australia's biggest export, warning of falls below $US50 with Deutsche Bank predicting a fall below $US40 before a recovery.
While some major investors such as Aberdeen Asset Management and Pengana Capital have backed BHP and Rio's actions, veteran resources analyst and MineLife director Gavin Wendt said they should be angry.
The majors could cut production and happily produce at at least $US90 a tonne but were arrogantly refusing to admit they badly miscalculated in predicting Chinese demand, said Mr Wendt.
"Shareholders must be annoyed thinking that management are trashing their future, trashing their earnings for the next few years," he told AAP.
Fortescue founder Andrew Forrest was ridiculed for calling for a cap on production last week, but some analysts such as Morgan Stanley's Tom Price point out the big miners could legally cut production and influence prices.
The big miners have attracted prominent critics from Western Australian premier Colin Barnett who called their strategy dumb, while Glencore chief executive Ivan Glasenberg cited his own culling of coal output.
The WA government is suffering revenue hits but is trying to help desperate iron ore juniors, with BC Iron announcing it had been granted relief from paying half of its royalties.
Australia's east coast economies are also suffering from plunging coking and thermal coal prices - Australia's number two export - in the last two months.
UBS analyst Glyn Lawcock said the big miners could potentially keep making cash with an iron ore price in the low $US30s.
They were merely fulfilling their strategy of producing while they could make cash, he said.
Fortescue could be losing money based on UBS's breakeven iron ore price of $US53 a tonne, threatening its viability.
Dr Lawcock said they should be paying off more debt but was optimistic about its ability to cut more costs.
Falls in the Australian dollar, the oil price's crash and related falls in freight costs were helping, while there is still a view that faltering Chinese demand will rebound with much urbanisation to occur.
Morningstar resources analyst Mark Taylor predicted that the market was going to be left with just a handful of seaborne players, in which a lot of iron ore miners were threatened including Fortescue.
There were positives including more control for the big suppliers such as BHP, but negatives too.
"An oligopoly type market is ideal if everyone behaves rationally from a suppliers' perspective ... but it never is that," he said.
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