Nelson Colliery was formed by Messers Bennett and Meek in March 1825 and a licence was granted to erect a steam engine. However there was little activity prior to 1841 when a shaft was sunk to a depth of 168 ft. By 1845 coal production had increased to 6388 tons. Eleven years later in 1856 the yield had increased to 24539 tons, the fifth highest in the Forest.

Tramroad connections were made to both the Forest of Dean (later South Wales) and Severn and Wye Railways, and by 1856 the colliery had a broad-gauge connection. The colliery appears to have declined leading up to 1865, although it is possible some coal was worked up to the early 1870s. By 1881 the gale was in the ownership of the Bilson and Crump Meadow Collieries Co. Ltd. The company acquired the colliery not to mine it, but to protect their own colliery at Crump Meadow just to the south. That closed in 1929.