Last month, the troubled Scottish Resources Group, which owns Scottish Coal, told 450 miners they could be facing redundancy as it struggled with financial difficulties.
Blair Nimmo and Tony Friar of KPMG were appointed last night by the Court of Session to sell off as many of the group’s mines as they could.
But at the same time, they confirmed 590 employees were being made redundant and all operations had “ceased with immediate effect”.
KPMG added that the remaining 142 employees would be retained to “assist in securing the sites” while the liquidators “explore how best to maximise returns from the assets” including its sites, plant and stocks.
Scottish Coal is owned by Colin Cornes, 71, the reclusive millionaire who was estimated by the Times Rich List to have a fortune worth £90 million. His attempt to raise £25m in a £200m stock market flotation in July 2011 failed.
First Minister Alex Salmond had supported the flotation. Other directors include former Labour energy minister Brian Wilson.
In September of 2011 – the last year the company produced accounts – it unveiled a 90 per cent slump in profits after lower coal prices and increased investment took their toll.
Scottish Coal operated six opencast coal mines in Scotland, in East Ayrshire, South Lanarkshire and Fife. Together with the plant operator, CPL, the business employed a total of 732 people.
KPMG said Scottish Coal had been been suffering from “well- publicised difficulties”.
The liquidators added: “A combination of falling coal prices, rising operational costs, particularly fuel, and a number of Scottish Coal sites exhausting their reserves has contributed to trading losses and significant cash flow pressures.”
Mr Nimmo 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.
“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.”
Last night, Scotland’s energy minister Fergus Ewing said: “This is very disappointing news, and our immediate concerns are for the workforce and their families. Our efforts are directed towards the objective of seeking to continue mining operations.”