COUNTY Durham mining and transport group Hargreaves Services has confirmed that it is to close the 130 year-old Monckton coke plant near Barnsley.

Production at the site, which Hargreaves bought in 2005 and employs 120 people, will cease this month following a period of consultation with workers.

Monckton is the only independent coke plant in the UK. The GMB union, which has about 80 members at Monckton, said it marked "the final nail in the coffin of the coal industry in Yorkshire."

Hargreaves, which has its headquarters in Esh Winning, confirmed its intention to review the future of Monckton earlier this year due to a period of "unprecedented turmoil in European coke markets." Hargreaves said the decision represents a major element of the group's "simplification plan" to help it combat falling fuel prices.

In a trading update today Hargreaves said: “The decision to close Monckton, whilst regrettable for the staff and stakeholders, will reduce the level of risk and volatility currently created by the challenge of fluctuating demand and low commodity prices.

"We are pleased to note that the group faces these challenges with a very strong balance sheet and profitable and cash generative trading, services and transport operations.

"The board remains committed to developing the Group's surface mining operations and regards these assets as a source of significant long term value. The actions taken to maintain the maximum amount of operational flexibility around the mining business will ensure that the group is well placed to ride out the current challenges presented by low international coal prices and quickly benefit from any improvement."

The Monckton site is expected to achieve break-even in this financial year, having previously forecast an operating profit of £2m, however, the outlook beyond this year is poor given current market prices.

Closing the site is estimated to cost £3m, plus £1.8m in remediation costs. A further £13.6m of non-cash book impairments, including £5.7m relating to goodwill, are expected with the total charge to the income statement estimated to be £16.6m.

Hargreaves added that the group's trading during the first six months of the financial year has been in line with management's expectations. It noted that falling fuel prices would lead it to redouble efforts to find cost savings and boost revenue in other parts of the business.