Source: MENAFN                         Date: 31 August, 2011

Shenhua Energy Co is negotiating with the Mongolian government to develop the nation's massive Tavan Tolgoi coal deposit in the Gobi Desert. However, the company said it expects the project to account for only 5 percent of the company's total coal reserves. The site is a major deposit, reported to hold an estimated 6.4 metric tons of coal.

The company claimed the Tavan Tolgoi will only marginally influence the company's success. The company did not go further to explain any further details, citing a confidentiality agreement with Mongolian authorities. However, the company said it expected to meet or exceed its 2011 coal output and sales targets.

The Beijing-based coal producer, which also operates railways, ports, and power plants, reported that net profits rose 17 percent to CNY 22.73 billion because of increased coal sales.

Shenhua was awarded 40 percent of the Tavan Tolgoi's Western Tsankhi site. The deal has been under heated controversy since then and there is some calls to revise the chosen selection of investors.