The company had filed an application to support a three-year closure plan for its collieries in Kellingley, North Yorkshire and Thoresby, Nottinghamshire.
Minister of State for Business and Enterprise Matthew Hancock said that the government will not provide £338m for extension of mines until 2018 saying it does not represent value for money.
The proposed closure of the mines is expected to put around 1,300 jobs at risk.
Pontefract and Castleford MP Yvette Cooper said: "This means over 600 skilled men and women are set to lose their jobs.
"It’s a massive blow to everyone after all the campaigning and work we’ve done to try and persuade ministers to help."
The company has sought £10m to proceed with the planned closures.
Hancock said: "We are working with the company to determine the amount, timing and form this additional assistance could take."
TUC general secretary Frances O’Grady said: "Immediate help for UK Coal workers and their families is welcome, but this announcement doesn’t resolve the long-term problems facing the UK coal industry, in terms of both job and energy security."
