Coal of Africa Ltd. announced Monday it plans to place its Mooiplaats Colliery in South Africa on care and maintenance. The company cited unacceptable operational losses as the reason for the closure.

CoAL said it has not been able to ramp up production to meet necessary targets owing to challenging geological conditions and poor operational performance. The global downturn in thermal coal prices over the last year has hampered business as well.

At the end of the 2012 fiscal year, Mooiplaats had lost R167 million ($17 million). Since the beginning of the current fiscal year, it has been losing R20 million ($2 million) on average each month.

Prior to implementing care and maintenance, the company will meet with stakeholders to evaluate possible alternatives.

CoAL said in a written statement it recognized the importance of preserving jobs but preserving its financial structure and future sustainability was paramount. Mooiplats — located in the Ermelo coalfields in the eastern region of the country— employs 290 employees and 258 contractors.