The firm said the construction phase would create hundreds of new jobs while the surfacemine site could be tapped for geothermal energy to provide heating and cooling for the homes.
More than 60% of all coal mined in the UK is produced by the Doncaster-based company at collieries or surfacemine sites principally located in the west and east Midlands, Yorkshire and the North East.
Further alterations were later made, including changes to the mill's second waterwheel to drive a surface water pump and haul trucks from a neighbouring gypsum mine.