UK fuel supplier Hargreaves Services could close its 130-year-old Monckton coke plant in Barnsley, putting 120 jobs at risk.
The company said it has started a 45-day consultation over the future of the plant and warned that staff at the site could face redundancies.
The Monckton plant is set to make a profit of £2m ($3.2m, €2.5m) this year, but the employer said that the outlook beyond 2014 is "very poor" given current European coke market prices.
Hargreaves, which acquired the plant in 2005, said a significant change in both market conditions and customer demand would be required to secure the plant's future.
"Whilst great progress has been made by the team in improving efficiency and environmental performance over the past ten years, the coke markets have become increasingly challenging for the business," said Gordon Banham, the chief executive of Hargreaves.
"I have worked closely with the management team and it is with great personal sadness that we find ourselves having to start this consultation process."
Hargreaves said that a close would free up more than £22m in 2015 and 2016, but the move would cost the company £4.8m (cash closure costs of approximately £3m and remediation costs of £1.8m).
The GMB union, which represents workers at the plant, said it expects the plant to close.
"GMB was informed on 27th October that the company have started consultations on the closure of this plant," said Steve Morris, a regional officer for GMB.
"The consultation is due to end on 11th December and I expect the plant to close soon after that. The shop stewards have been expecting this news. The plant is linked to a coalfield that no longer exists.
"This is a sad day. It marks the final nail in the coffin of the coal industry in Yorkshire."