China's largest coal mine company Shenhua Energy Co announced on Friday a slightly lower-than-expected result, with earnings rising by 75 percent in 2005, driven by aggressive demand from power plants and steel refiners.

 

The world's sixth-largest miner said it earned 15.63 billion yuan (US$1.95 billion) in 2005, compared with 8.94 billion yuan (US$1.11 billion) a year earlier.

 

Analysts had forecast earlier that the Beijing-based mining group would post 15.9 billion yuan (US$1.98 billion) earnings.

 

Prospects for the firm, according to analysts, will wane somewhat this year due to dropping coal prices, as many domestic power plants and steel mills have already reserved enough in the wake of the coal crisis which clouded the whole industry earlier.

 

"The prospects for China's coal mines rely on whether coal prices remain firm or not," said energy analyst Andes Cheng from South China Research Ltd. "However, coal prices might drop by 10 percent in 2006. If so, the earnings of Shenhua will reduce accordingly."

 

(China Daily March 11, 2006)