China Shenhua Energy Co Ltd, the world`s second-largest coal producer by reserves, posted a 19.8% rise in first-half earnings owing to higher prices and sales volume.
Shenhua, which unveiled last month a plan to raise up to US$6.3 billion in a booming Shanghai market, is now in a prime position to invest in power and transportation and buy mines in China or overseas as growing demand for electricity pushes Asian coal prices to record highs.

Analysts are upbeat on the industry`s outlook, saying coal prices should keep climbing in China because of double-digit growth and as Beijing allows more market-oriented pricing.

Demand for coal from China, the world`s top consumer of the hydrocarbon, has nearly doubled in the past half-decade as power output struggles to keep pace with breakneck growth.

The country became a net importer on a monthly basis this year -- a situation expected to persist in coming years.

China`s top coal producer made a net profit of Yu10.315 billion (US$1.36 billion) in the January to June period, versus Yu8.607 billion a year earlier.

Shenhua said in a statement that demand for coal would continue to experience comparatively strong and steady growth in the rest of the year and the spot price for coal would generally remain high despite certain fluctuations.

Investors are looking to see if Shenhua would make increasing forays abroad, as it steps up activity at home.

Shenhua has said it is in talks to buy coal mines in Indonesia and Australia, two of the world`s largest coal exporters.

US coal miner Peabody Energy Corp said in July it was in talks with a number of Chinese companies, including Shenhua, to develop coal projects in the country.

Shenhua has also said it planned to buy Shendong Coal and Shendong Power -- major players in northern China -- from its parent for a total Yu 3.3 billion.

And the firm has stepped up mining to fuel power plants and steel mills across the world`s fourth-largest economy, selling 21% more coal in the first six months, or 97.8 Mt.

The company exported 12.2 Mt of coal in the first half of this year, down 1.6% from the same period of last year.

Shares in Shenhua jumped 46% in the first half of this year, outpacing a 16% gain in the index of Chinese companies listed in Hong Kong.