Waterlogged organic matter accumulates in deltaic, coastal barrier or raised mires to form peat. Coal forms by the compaction and decomposition of peat. Chemical changes imposed by increasing temperature and pressure over time determine the coal rank.
Coalfields can be classified as either exposed or concealed, depending on whether or not the coal-bearing rocks are hidden by younger strata. In most coalfields, mining commenced in the shallower exposed regions and has gradually extended into the deeper parts of the concealed coalfields.
Surface outcrops of rock can indicate the likelihood of finding coal at depth. In remote areas of the world, initial surveys often use data acquired from satellites or aeroplanes, before detailed ground exploration takes place.
Drilling boreholes is the only way to determine reserves and coal quality in concealed rock sequences. Geophysical logging records the nature of the strata located in the boreholes without the need to take expensive cores.
Calculation of the stripping ratio indicates whether surface or underground mining is most economic.
Surface mining is a flexible, cheap system that is currently producing most of the coal exported globally. However, it results in short-term local environmental disturbances; underground mining provides longer lasting problems, owing to spoil heaps, subsidence and acid mine drainage.
Most underground coal is extracted nowadays using the longwall method and mechanized systems. Such coal-cutting systems are very inflexible and are incapable of negotiating geological variations in the coal seam. Continued exploration during coal production is therefore necessary to predict these variations and to maintain the continuity of operations.
The oldest coalfields are of Carboniferous age, which formed in tropical latitudes. The Permian-Triassic coalfields of the Southern Hemisphere originated in temperate latitudes. Brown coals make up half of global coal reserves; they are mainly Jurassic to Tertiary in age. Extensive Tertiary deposits of low-rank coal are worked in Eastern Europe.
Reserves of coal depend on whether or not deposits are economic to mine under current economic circumstances (costs of mining set against the price of coal). Technology, economics and political circumstances often change unexpectedly. So it is possible for reserves to become resources if they fail to be profitable, and vice versa.
In 2003, global reserves of 984.5 × 109 t of coal were predicted to last into the 23rd century, at 2003 rates of production. China is currently the largest producer though it has a relatively low R/P ratio.
Demand for coal has fallen in the UK over the last 20 years, because of technological, economic and political factors. The UK now imports more coal than it produces.