UK Coal Mine Holdings has announced that Daw Mill Colliery in Warwickshire will close.
The company blames the closure to 'the largest fire seen in a UK coal mine in over 30 years'.
The fire is still burning 740m below the surface and shows no signs of reducing.
“This has been a terrible week, not just for the company and its employees but also for the energy security of the country, as it brings an end to 47 years of coal production at Daw Mill."
Only a 'small, core team' will keep their jobs to secure the site over the next coming months. The rest of the 650-strong workforce will lose their jobs.
“We are now exploring the possible transfer of some colleagues to our other mines. Regrettably however, this news is likely to see the majority of the Daw Mill workforce being made redundant and our thoughts and best wishes are with these colleagues and their families at this difficult time.”
– Kevin McCullough, Chief Executive for UK Coal Mine Holdings
Daw Mill has been at risk of closure since March 2012 when it was also announced that a restructuring was needed to safeguard the entire business.
Britain's biggest coal producer has reshuffled its business and has safeguarded 2,500 jobs nationally, 800 are in Coventry.
"The restructuring has helped to safeguard 2,500 highly skilled and well-paid jobs, a skilled supply chain, and created a funding plan for the £450 million pension deficit that UK Coal has been burdened with."
– Jonson Cox, Chairman
Coalfield Resources, formerly UK Coal, has split into two businesses. A mining arm called Mine Holdings and property division Harworth Estates.
"This has been a restructuring of unprecedented scale and complexity for this size of company. I'm delighted that we've succeeded in completing it. Without it, it was almost certain that the coal mines would have been unable to trade beyond the first quarter of 2013."
The reshuffle of Britain's biggest coal producer has safeguarded 2,500 jobs across the UK.
UK Coal has split its operations into two businesses after the company, which generates around 5% of Britain's electricity requirements, slumped to a loss in the first half of the year as production at Daw Mill mine near Coventry plunged.
The new reshuffle is said to have safeguarded jobs at the Coventry-based mine.