Buckets of crocodile tears were shed this week, not to mention the eruption of schadenfreude that was felt at the collapse of iron ore wannabe Western Desert Resources, and especially the possible losses racked up by rich lister shareholders Bruce Mathieson and Scott Perrin and high-profile businessmen Rick Allert and Roger Corbett.

The iron ore price plunge — from US$130 a tonne in late 2013 to US$83.20 overnight Tuesday — is not a reflection of a fading China, weak demand or anything to do with the buy side. It’s all to do with the deliberate strategy of BHP Billiton, Rio Tinto and Fortescue Metals Group in Australia (and remember Fortescue is still controlled by Mr Charity himself, Andrew “Twiggy” Forrest), and their great Brazilian rival, Vale. These companies have added tens of millions of tonnes of iron ore per month to the global seaborne trade, helping depress prices at a time when they were already weak.

It is a deliberate strategy to flood the global market with as much high-grade iron ore as possible to make life difficult for competitors, such as small- and medium-sized Chinese miners, as well as miners in countries such as Australia, Brazil, Guinea, Canada and India. And the two main culprits are BHP and Rio Tinto. They want to make life tough for their Australian rival, Fortescue, and all three want to make life tough, especially in the Chinese market, for Vale — the only other bulk iron ore exporter of global size.

The justification from the companies is that they are producing as much as the market can bear, and if producers and exporters of lower value/quality ore (which does include Fortescue) in Australia, China and other countries are damaged, well, that’s too bad. Call it the Darwinist approach to survival in the global iron ore trade.

So it’s ramp up the dozers, fire up the truck, trigger the ANFO, load the trains and the ships, and off we go. The bigger the better, as the expansion plans confirmed in the past month or so by the big four confirm. In fact, the iron ore price plunge has had no impact on the aggressive expansion plans of the big four exporters.

“These three big Australian iron ore miners and exporters are attempting to protect their market positions in the huge Chinese market to the exclusion of competitors … and don’t care who becomes collateral damage.”

Rio Tinto, the top global supplier, still plans to boost output to more than 330 million tonnes in 2015 after an 11% rise to 295 million tonnes this year. Vale will raise production by 8.4% to 348 million tonnes next year (which will pressure Rio and BHP once a big new mine comes on stream). BHP is looking for a 9% increase from its Pilbara mines in 2014-15 to 245 million tonnes. Fortescue is looking to boost exports by around 25% this financial year, and production by around 155 million tonnes. All up, these four companies could tip 80-100 million tonnes, or more, of extra iron ore onto the world market this year. No wonder prices are falling, exacerbating the already slowing level of demand from China (because Chinese demand for steel is slowing).

But somehow the woes of a small iron ore miner — a victim of weak global prices (weak for a very specific and Australian reason, which we will come to shortly) — and the sluggish Chinese economy have become the latest metaphor for a looming crisis for the “struggling” Australian economy. The falling iron ore price and the danger that poses to Australia now overshadows issues such as the sluggish pace of growth in the economy, the high value of the Aussie dollar, the rising jobless rate and rising housing prices — all deliciously conflated by The Australian Financial Review with the headline “Iron ore slump hits economy” on Monday, and follow-up stories pointing out the obvious threat to smaller iron ore exporters.

Chinese import data released last weekend, show that China imported 74.88 million tonnes of iron ore in August, down 9.3% from July, but up from just over 69 million tonnes in August of last year. The August figure was also well under the 86 million tonnes of imports in January (which was boosted by extras shipments ahead of the Lunar New Year break). The fall in iron ore shipments came as steel mills cut production in late August, as they start running down stocks of ore ahead of the northern autumn and winter.

Iron ore prices fell 8% in August, so the combination of lower volumes and prices cut the cost to Chinese steel mills. But in August, exports of iron ore from Port Hedland (the world’s major iron ore export outlet) totalled a record 37.3 million tonnes, with shipments to China (mostly by BHP and Fortescue) at a record 32.3 million tonnes. Rio ships through Cape Lambert and Dampier in Western Australia, but the statistics are not available. The shipments from Port Hedland accounted for more than 43% of China’s imports alone.

And yet the AFR (and The Australian, which has carried similar reports) have missed the real story — that the guilty parties (surprisingly, for the AFR and the Oz) are not nasty unionists or silly governments, or the mining or carbon taxes. They are the boardrooms of some of the world’s largest mining companies — three of which are based in Australia. These three big Australian iron ore miners and exporters are attempting to protect their market positions in the huge Chinese market to the exclusion of competitors (and even one another), and the boards and managers don’t care who becomes collateral damage. If the slide in iron ore prices does indeed hurt Australia, then look no further than the boardrooms and managements of the big three miners, plus their mates in Brazil.