The colliery has recorded consistent losses for more than a year and the company said it had fought in vain against poor operational performance and the impacts of the global downturn in thermal coal prices.

"This decision follows sustained and concerted attempts over the past two financial years to make the operation profitable and enable it to produce positive cash flows," the company said.

The colliery employs almost 550 people, including 258 contractors.

"This decision has not been taken lightly as [Coal of Africa] recognises the importance of conserving jobs, but at the same time the need to preserve the company's financial structure and ensure its future sustainability is paramount," chairman David Brown said in a statement.

Coal of Africa said poor global coal prices had hampered efforts by the company to return the colliery to profitability but the situation had been worsened by poor operational performance and challenging geological conditions at the site.

Mooiplaats recorded a loss of approximately $R167 million ($US62.8m) for the 2012 financial year and has recorded an average monthly loss of $R20 million ($US2m) since the beginning of the current financial year.

The company said it would embark on a regulatory Section 189A two-month consultation process from June 3 to evaluate alternatives to placing the colliery on care and maintenance.