Location:
Skull Cavern, deeper floors.
Strategy:
Iridium Crabs are similar to regular Crabs but have extremely high defense. Their shell makes them almost impervious to normal attacks. The trick is to break their shell first. Use a Pickaxe to hit them a few times, which will stun them and remove their shell, making them vulnerable to your weapon. Once the shell is off, switch to your sword/club and defeat them. They are not weak to any specific element.
Rewards:
Iridium Ore (guaranteed), Iridium Bar (rare).