China is trying desperately to break its dependence on iron ore imports.

Miners across the country are stepping up capacities to boost output. In the first half of 2011, output of raw iron ore surged 22 percent to more than 570 million tons, according to data from the National Bureau of Statistics.

The goal is to lift the output to 1.5 billion tons in 2015 to meet 40 percent of the country's total needs, said Yang Jiasheng, Secretary General of Metallurgical Mines' Association of China.

From January to July, China imported 390 million tons of iron ore, up 7.9 percent year on year. The price averaged $162.76 a ton, jumping 37.8 percent. The acute cost inflation is hurting the profitability of China's steel industry. The country's 77 large and medium-sized steelmakers reported a profit-to-sales ratio of 3.08 percent in the first seven months, compared with 6.11 percent of the average industrial enterprises.

"But increasing output cannot be a panacea for ails of the industry due to a lack of quality mines," said Lu Yeshou. "It is still necessary to improve mining technologies and lower the costs of exploration."

While Chinese domestic iron ore production has been stimulated in the last year by strong demand growth, high production costs and low quality reserves will drive up import demands, said a report by Wood Mackenie, a global energy and mining consulting firm.