Coal provides nearly two thirds of China's energy, but for mining companies, thiswinter could not be more chilly.

The government has done its best to save the day, but it is not enough to force up the price ofcoal, even in the short term and the outlook for the coming year is no better.

An already grim situation is made worse by weak demand, overcapacity and a large amount ofimports, according to Jiang Zhimin, vice president of the National Coal Association (CNCA).

Rating agency Fitch called 2014 a difficult year for coal miners in China, with prices sliding byabout 20 percent.

There is a lower demand for thermal coal stemming from an array of one-off factors like thehigher than average rainfall that helped hydropower generation.

The government imposed import duties ranging from 3 percent to 6 percent in October andbanned domestic production and imports of low quality coal.

Jiang expects oversupply and pressure on miners to remain in 2015, as China seeksenvironmental protection and quality growth with clean energy, but coal production actuallydropped last year for the first time since 2000, and Jiang predicts another 2.5 percent drop thisyear.

Coal stockpiles with miners stand at around 87 million tonnes, up 2.6 percent from this time lastyear. Worse yet, power plants have 95 million tonnes piled up, waiting to be burned; 17 percentmore than a year ago. Major coal companies recorded profits of 110 billion yuan ($18 billion) inthe first 11 months of 2014, down 44.4 percent.

CNCA analyst Zhang Hong believes the oversupply headache won't go away any time soon andthe entire sector will come under huge pressure this year. "Demand is slowing. Overcapacity isyet to be digested and environmental constraints are constantly in the headlines as we transformthe growth mode," he said.

Fitch holds no hope for a meaningful upswing in coal prices in 2015. Substantial capacityinvestments from previous boom years are still being digested, while demand has weakened.

As the government strives for more renewable energy at the expense of coal in the longer term,thermal coal consumption is set to decline. As the world's largest consumer of coal, China burnsas much as the whole of the rest of the world combined. Nearly 70 percent of its energy comesfrom coal, a proportion much higher than in developed countries, which use cleaner resourceslike oil and gas. China has the world's third-largest coal reserves but lacks gas and oil.

Miners are under greater pressure than ever to control pollution, with the bar for reducing carbonemissions per unit of GDP set very high. In 2013, emissions per unit GDP had dropped by 29percent from 2005 levels and in 2014 fell by another 4.8 percent. At that rate, the target will bemet well in advance.

Fitch also underscored the need to preserve cash flow, since many coal producers undertookdebt-funded capital expenditure and investments when coal prices were high between 2009 and2012, a toxic mix in current conditions. Cost control and leverage reduction will be importantstrategies for companies to maintain stable credit quality.