China Shenhua Energy, the country's largest coal producer that also owns power plants, railways and ports, posted a 17 percent rise in net profit for the first half of 2012, beating forecasts, on higher sales despite a weakening coal market.

Shenhua said its net profit rose to 26.74 billion yuan ($4.21 billion) in the first six months, compared with a restated 22.82 billion yuan a year earlier. That beat an average forecast of 24 billion yuan by five analysts.

Total revenue of the firm increased 20.1 percent to 121.5 billion yuan.

But the outlook for Shenhua and smaller peers Yanzhou Coal Mining and China Coal Energy is overshadowed by a slowing economy and rising mining costs, analysts say.

Shenhua said it would realize its full-year operating targets by further leveraging its integrated coal-railway-power generation model and strengthening marketing and cost controls.

"The coal market in China has been experiencing drastic changes since the beginning of the second quarter. Bloated inventory of coal and the significant increase in imported coal rapidly pulled down the price of coal," Shenhua said in a filing with the Hong Kong Stock Exchange.

But it "will strive to overcome the challenges to accomplish its annual operating target," Shenhua said.

Softening demand from China, where the economy is growing at its slowest pace in more than three years, has dragged prices of coal, iron ore and other commodities to multi-year lows, hurting the profits of global miners such as BHP Billiton and Vale SA.

Shenhua said its commercial coal production rose 11 percent year-on-year to 155.8 million tons in the first half, accounting for 53.7 percent of its annual operating target. Sales volume jumped 16.2 percent to 222.1 million tons, accounting for 54.1 percent of its full-year target.

Its total power output dispatch rose 15.3 percent to 95.66 billion kilowatt hours in the first half.

China Coal Energy, the country's second largest coal producer, posted a 8.2 percent drop in its first-half net profit due to weak spot coal prices, higher cost of production and transportation and losses at its coking business.

Yanzhou Coal reported a 1.4 percent rise in its net profits in the first half, as higher sales volume offset lower prices.