The closure of the West Midlands mine could reportedly put 800 jobs at risk.

UK Coal said Wednesday it had started a consultation process involving the potential closure of the mine by 2014.

The proposed closure falls under UK Coal’s plans to restructure the business.

“The principal objectives of the restructuring plan are to ensure a financial framework that is capable of supporting ongoing investment in each deep mine over its remaining economic life and to address the risks and volatility inherent in the mining industry,” UK Coal said.

“The plan is intended to isolate the operating risk of each deep mine from the group as a whole and mitigate future financial uncertainty arising from operations at Daw Mill.”

The closure of Daw Mill has been prompted following the mine’s lagging performance of late.

While UK Coal’s other mines are performing broadly in line with expectations, the producer said Daw Mill’s current output was 175,000 tonnes behind budget.

However, UK Coal said there was an opportunity to increase Daw Mills production in 2012.

At present, UK Coal has suspended developments for exploitation at the mine beyond 2013 but retains the option to resume developments, reopen the mine or extend its life, to exploit the mines considerable long-term resources, albeit at a “lower risk operating model.”

UK Coal has entered into discussion with its principal banking partner, Lloyds Banking Group, to address funding requirement of the group in light of the possible structure change.

The company had initially hoped to continue mining at Daw Mill past 2025 by accessing its further resources.

UK Coal reportedly admitted to safety failures at Daw Mill after three workers were killed in 2006 and 2007.