The people were buried when a three-story wave of mud and the mining waste inundated a valley in Xiangfen, a county in Linfen city of Shanxi province on Monday. State media put the official death toll at 128 people with 35 more injured.
Witnesses said the landslide buried an entire village of 1,000 people, the China Daily newspaper reported Thursday.
"There's almost no hope of their survival ... they have been buried for three days under two meters (yards) of slush," it quoted Wang Jun, head of the State Administration of Work Safety, as saying.
Wang said there could be several hundred people buried under the sludge, the paper also said. But Huang Yi, a spokesman of the administration, told The Associated Press that Wang had not commented on the possible number of people buried.
The landslide from a huge reservoir of iron ore waste, which had been illegally maintained and turned to sludge by heavy rain, occurred just as business at a busy outdoor market was getting under way with morning shoppers haggling at roadside stalls for food and daily necessities, the Shanghai Morning Post said.
When the dam broke, a wave of gray sludge flooded the valley washing out homes, cars and a building where more than 100 people from a local mining company were holding a weekly meeting, the paper said.
A relative of one of the company's employees told the Shanghai paper that only three of those at the meeting were believed to have survived.
More than 2,000 police, firefighters and villagers were mobilized in the search, but conditions were difficult, a woman surnamed Dong who heads the propaganda department of Xiangfen county told The Associated Press in a telephone interview Wednesday.
Rough terrain, poor telecommunications and heavy rainfall, which finally let up on Wednesday, have hampered rescue efforts, Dong said. Like many Chinese officials, she refused to give her full name.
Chinese President Hu Jintao and Premier Wen Jiabao have ordered "a thorough investigation" into the cause of the accident, the China Daily said.
The accident underscores two major public safety concerns in China: the failure to enforce protective measures in the country's notoriously deadly mines, and the unsound state of many of its bridges, dams and other aging infrastructure.
A preliminary investigation showed that the landslide was caused by the collapse of an abandoned dump which had been turned into a holding pond for mining waste by the illegally run Tashan Mine, said Wang Dexue, deputy head of the State Administration of Work Safety.
Heavy rains caused the already overloaded dump to breach its retaining wall, Wang said.