One of the few remaining deep coal mines in the UK is at risk of closure because of major geological problems, its owner has warned.
Maltby Colliery in Rotherham has been producing coal for more than 100 years, but the presence of gas, water and oil in the development of a new face has fuelled uncertainty over the site, which employs about 500 workers.
Its owner, Hargreaves Services, said the outcome of further investigations at the panel, known as T125, by its mining engineers and external consultants should be completed by the end of next month.
A company statement said: “We anticipate that the abandonment of the T125 panel would lead to the mothballing or even closure of the mine as it would probably be uneconomic to switch production to a later panel due to the long face gap entailed.”
Maltby produces more than one million tonnes of coal per year, with about 60% of its total output supplied under a long-term contract with Drax, Europe's largest coal-fired power plant.
Much of the remaining production is sent to Hargreaves' Monckton works near Barnsley, which produces 200,000 tonnes of coke for use in the production of glass, detergents and steel manufacturing.
Hargreaves Services said it was confident that it had found international coals with a very similar, although not identical, specification to Maltby coal.
The company first disclosed the problems at Maltby in May, describing the conditions as 'unprecedented' and warning that delays in T125 production could cost it £16 million in profits for the year to May 2013.
Shares fell 20% today despite chief executive Gordon Banham insisting the company was strong enough to absorb any possible closure of Maltby.