Scottish Resources Group subsidiary Scottish Coal operated six open cast mines in Easy Ayrshire, South Lanarkshire and Fife and, together with plant operator Castlebridge Plant, employed 732 people.
Castlebridge has also been placed into administration.
A combination of falling coal prices, rising operational costs and a number of the company’s sites exhausting their reserves was cited for the “significant cash flow pressures”.
Liquidators KPMG said that despite significant efforts in recent months, the company was unable to secure the level of investment required to enable the business to continue.
KPMG said it was possible the sale of certain sites could see mining operations continue and offer job opportunities for some staff.
“In light of Scottish Coal’s poor trading and financial position, we have had to cease trading with immediate effect,” joint provisional liquidator in Scotland and KPMG restructuring head Blair Nimmo said.
“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.”
Approximately 450 staff were placed on notice of redundancy on March 7 as the company sought to restructure its activities.
Immediately following the insolvency appointment, 590 employees were made redundant and all operations ceased.
The remaining 142 employees have been retained to assist in securing the sites.
Scottish Energy Minister Fergus Ewing said the government would do its best to support and relocate redundant workers.
“Our concerns remain with the workers and families affected by the decision to make 590 Scottish Coal staff redundant,” Ewing said in a statement.
“However, I very much welcome the view from the liquidators that there is a possibility that mining operations may continue.
“The Scottish government will do everything we can to secure the continued operation of the business on a sustainable basis and we are in contact with both the liquidators and the trade unions in this regard.
“Meanwhile, Skills Development Scotland will also coordinate local response teams under the partnership action for continuing employment to provide tailored help and support those affected.”
Ewing simultaneously announced the creation of a trust to help restore old open cast coal mines across Scotland.
“Whilst our main concern is to retain as many of the existing Scottish Coal jobs as possible, the restoration process itself is expected, over time, to create hundreds of jobs across the country – as well as restoring the local environment,” he said.
The Scottish government’s independent Regulatory Review Group chair Professor Russel Griggs has agreed to chair the trust initially.