By Chuin-Wei Yap 

XINSHUI, China--As global iron-ore prices languish near multiyear lows, the strains on China's once-thriving miners are getting harder to bear.

Chinese ore producers are falling victim to a strategy pursued by much larger foreign rivals such as Australia-based BHP Billiton Ltd. and Rio Tinto PLC, and Brazil's Vale SA.

The three giants, which account for more than 60% of global iron-ore exports, have been relentlessly increasing production despite prices halving since last year, in a bid to drive out higher-cost rivals.

The signs from China say the strategy is working.

The country now imports more than 80% of the iron ore it needs, mostly used in steelmaking. That is up from 70% two years ago, the China Iron and Steel Association said. Meanwhile, China's iron-ore output has slumped, falling by 9% in the first quarter, the government said.

"It's common for domestic iron-ore mines now to be running losses, cutting production or completely halting production," CISA Executive Vice Chairman Zhu Jimin said Wednesday.

Iron ore's slide has hit employment and growth, CISA officials said. Last month the State Council said it would reduce a resource tax on iron-ore production. But Mr. Zhu says more is needed.

"We are not on a level playing field with global miners," he said. "We need to lessen the burden on our iron ore mines."

In Xinshui, a northern mining village in Hebei province, the impact of iron ore's malaise has been clear for some time.

The buildings of Malanzhuang Xinshui No. 2 Iron Ore Mine, perched atop a hill of red rubble, are flecked with broken windows, and a 10-foot-tall mound of iron ore outside has been untouched since the mine stopped production more than a year ago.

But its driveway is immaculately scrubbed, and a guard still stands sentinel.

"I'm just here on duty," a female employee there surnamed Liu said. "The office building is empty."

Employees say this 'ghost mine,' hacked from a hillside about two city blocks in area, closed after it was priced out of the market, but about 10 workers are still getting paid to show up and clean the complex amid the ruins of a silent quarry.

Small-scale Chinese operations like this one have languished, as the price of digging up each ton of Chinese ore runs more than double the $35 it costs in Australia. Iron ore was trading at $59.20 a ton on Wednesday.

China's ore is also of lower quality, generally containing about 30% iron content, compared with around 60% in Australia and Brazil, meaning more needs to be mined for a given quantity of steelmaking.

Though labor costs are low in China, miners with large operations, such as those in the Pilbara region of Western Australia, benefit from better technology and economies of scale in areas like procurement.

"We are the lowest-cost producer in the world," Rio Tinto Chief Executive Sam Walsh said in November. "If you're the lowest-cost producer, you will be in a particularly privileged position, so we're continuing to invest on that basis."

Chinese miners aren't the only victim of Big Iron's strategy.

Australian miner Atlas Iron Ltd. is closing mines and halting exports to Asia. Canadian miner Cliffs Natural Resources Inc. said it is trying to restructure its business away from the seaborne market. The Indian province of Goa, once the heartland of that country's iron-ore production, has seen its output dwindle to almost nothing.

In China, the industry's woes are hitting whole communities.

Once home to 80 employees, the human footprint at Xinshui has shrunk. Formerly ubiquitous ore trucks have vanished.

Public records show the mine, listed as still active, is owned by the Xinshui village committee. Calls to the committee went unanswered. The Qian'an city government, which administers Xinshui, declined to make officials available for comment.

Analysts say mines like Xinshui retain a handful of villagers on the job, subsidized by proceeds from other businesses, likely to honor terms of employment deals with the local government at the time of the mine's inception--in Xinshui's case, in 1992. The owners typically rev up if global markets improve, or, as CISA hopes, if the government sends a lifeline.

"In China, this sort of thing is quite normal," said Ma Haitian, an analyst at the state-backed metals consultancy Beijing Antaike Information Development Co. "The owners would pay these workers 2,000 to 3,000 yuan ($323-$484) a month to show up. This is a deal between laobaixing"--the Chinese term for ordinary folks--"and not a formal contract."

Qian'an is home to about 60 iron-ore mines. Some 90% of smaller privately owned mines--about a third of Qian'an's capacity--have become ghost operations or completely shut, residents say. Officials of Hebei province, China's main steel belt where Qian'an and Xinshui are located, last month told Premier Li Keqiang in a private meeting that their "employment pressure is not small."

"Everyone here works in a job related to iron ore," said a Qian'an resident surnamed Guo. "They don't know how to do anything else."

Back on the road to Xinshui, a four-lane highway built expressly for iron-ore trucks now carries barely any on a recent Tuesday afternoon. Freight trains used to ply a railway line near the ghost mine; the tracks have fallen silent.

"Our area is going back to the way it used to be," Mr. Guo said. "Poor."

Kersten Zhang contributed to this article.

Write to Chuin-Wei Yap at chuin-wei.yap@wsj.com

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