The works, run by the company's coal products subsidiary, is the only one making Sunbrite smokeless fuel, which is used in domestic central heating systems.
Meanwhile, the Government dealt British Coal a blow by approving two more gas-fired power plants. This increases the squeeze on British Coal's share of the market for power generation fuel, which accounts for the bulk of the company's output.
The new approvals are for Humber Power's 1,100-megawatt plant at Stallingborough on Humberside and Scottish Power's 500- megawatt plant at Shoreham on the south coast.
The sanction for these plants is the latest in a series of setbacks for British Coal, which is earmarked by the Government for swift privatisation. The company's workforce has shrunk to 51,000 - of which only 41,000 are miners - from 221,000 in the mid-1980s.
Further job cuts are expected as power generators switch to natural gas and imported coal. British Coal is trying to win contracts for future supplies to National Power and PowerGen, but so far has been unable to secure a deal.
The company reacted angrily yesterday to the gas approval. A spokesman said: 'Many of these plants will be less efficient than modern coal-fired stations, which will inevitably have to close.'
The gas-fired plants are based on new combined-cycle gas-turbine technology, which has been hailed by the Government as an engine for competition in the electricity industry.
Sixteen CCGT plants have been given consent so far and about 12 are under consideration by the Department of Trade and Industry.
Miners at Thurcroft colliery in Yorkshire meet British Coal management today in a last-ditch attempt to save the pit, which they want to lease from British Coal. The company has said it must close the pit as the miners have not been able to pay the costs of keeping it open while they raise finance to take over operations.Reuse content