The closure would put more than 400 jobs on the line and a minimum 60-day consultation process is underway with the unions.

The South African company announced in late 2012 that it would sell the colliery through a tender sale process because it was “no longer strategically aligned to Exxaro’s group strategy”

Exxaro said the “misalignment” was mainly due to the operation being a negative-margin operation with a shorter life-of-mine.

Following the initiation of a divestment process in April 2013, it became apparent to the company that NCC’s operations were under “significant and unanticipated stress”, Exxaro said in a statement Thursday.

"Revised 2013 forecasts for the operation indicated a substantial decrease in operating profit," Exxaro said, citing reduced coal prices and mining difficulties for the slide.

Labor tensions are already high in South Africa and the mine’s closure could secure the company a battle with unions.

The Mpumalanga mine produced 717 kilotons of steam coal last year, primarily for the export market.