Around 600 jobs have been lost following the appointment of Blair Nimmo and Tony Friar of KPMG as joint provisional liquidators of the Scottish Coal Company Ltd (Scottish Coal), which has ceased operations.

Scottish Coal is the main trading subsidiary of Scottish Resources Group Ltd. Together with another subsidiary company, Castlebridge Plant Ltd (CPL), which has also been placed into administration, the business employed a total of 732 people.

Following the privatisation of British Coal in 1994, Scottish Coal was responsible for operating six open cast mines in East Ayrshire, South Lanarkshire and Fife.

The company had been suffering from well publicised difficulties with falling coal prices, dwindling coal reserves and rising operational costs, which had resulted in trading losses and significant cash flow pressures.

The administrators said that despite significant efforts in recent months, Scottish Coal was unable to secure sufficient investment to enable the business to continue.

As a result, 590 employees have been made redundant. The remaining 142 staff have been retained while the liquidators look at options for selling the business assets, principally the sites, plant and stocks.

Blair Nimmo, joint provisional liquidator and head of restructuring at KPMG in Scotland said: 'In light of Scottish Coal's poor trading and financial position, we have had to cease trading with immediate effect. It is extremely regrettable that we have had to make so many redundancies but have been left with no other option.'

'We will be looking to secure the sale of certain sites as well as the company's key assets in the coming weeks. It is still possible that mining operations will continue and offer future employment prospects for at least some of the people who have lost their jobs today.'