Analysis and Commentary

Coal’s hidden treasures: unearthing the potential of chemical extraction

Analysis and Commentary

Coal’s future as a source of electricity isn’t what it used to be, writes Jan Kwak, but the material could be a rich source of industrial chemicals. In this article he considers the challenges and opportunities involved.

Australia, renowned for its abundant coal reserves, has long been a major player in the global mining industry. However, as the world transitions towards cleaner energy sources, the future of coal mining in Australia has faced increasing scrutiny. 

Despite the challenges, there is an untapped potential for Australian mining to contribute to the production of valuable chemicals derived from coal. By exploring the manufacturing process for chemical extraction from coal, we can uncover the remarkable possibilities that lie within this industry.

Chemical extraction from coal

Coal, often associated solely with energy generation, is a complex and diverse material composed of various organic compounds. With advancements in technology, coal can be utilised as a resource for extracting valuable chemicals. 

The manufacturing process involves several steps, including coal preparation, coal gasification, and the subsequent conversion of syngas into a range of chemicals.

  • Coal preparation – The first step in the chemical extraction process is coal preparation. Coal undergoes a series of mechanical and chemical treatments to remove impurities, such as sulphur and ash. This enhances the quality of the final products and reduces environmental impact.
  • Gasification – After preparation, the coal is subjected to gasification, a process that converts solid coal into a gas mixture known as syngas (synthetic gas). Gasification involves reacting coal with oxygen and steam under high temperatures and controlled conditions. The resulting syngas contains primarily carbon monoxide (CO) and hydrogen (H2), along with smaller amounts of carbon dioxide (CO2), methane (CH4), and nitrogen (N2).
  • Syngas conversion – The syngas obtained from coal gasification serves as a versatile feedstock for producing a wide range of valuable chemicals. One prominent example is the Fischer-Tropsch process, which converts syngas into liquid hydrocarbons, including diesel and jet fuels. Moreover, syngas can be further processed through chemical reactions to yield chemicals such as methanol, ammonia, and dimethyl ether (DME).

Potential chemicals and applications


Methanol, also known as wood alcohol, is a crucial building block for various chemicals and materials. It serves as a precursor to formaldehyde, acetic acid, and numerous plastics. Additionally, methanol can be utilised as a clean-burning fuel, providing an alternative to conventional petrol.


Ammonia, a compound composed of nitrogen and hydrogen, is a vital component in the production of fertilisers. The global demand for ammonia continues to rise due to its importance in agricultural practices, supporting food production on a massive scale. 

Australian mining’s contribution to ammonia production could positively impact the country’s agricultural sector.

Dimethyl ether (DME)

DME, a clean-burning alternative to traditional diesel fuel, holds significant potential for reducing greenhouse gas emissions in transportation. It can be used in compression-ignition engines, providing similar performance to diesel while producing fewer pollutants.

Benefits and challenges

The extraction of valuable chemicals from coal offers several benefits for Australia’s economy and environmental sustainability, including:

  • Economic opportunities – By diversifying the coal industry’s focus from energy generation to chemical extraction, Australia can capitalise on new revenue streams. The production and export of chemicals derived from coal can provide job opportunities and boost the country’s economic growth.
  • Energy transition – Embracing chemical extraction from coal allows Australia to utilise its coal reserves while reducing dependence on coal for electricity generation. This transition aligns with global efforts to decarbonise and shift towards cleaner energy sources.

However, challenges remain, including:

  • Environmental impact – Coal mining and processing have historically raised concerns about their environmental impact. It is crucial to ensure that chemical extraction processes adhere to rigorous environmental standards and employ technologies that minimise pollution and waste generation.
  • Market volatility – The demand and prices of chemicals derived from coal can be subject to market fluctuations. Diversification and careful planning are necessary to mitigate risks associated with market volatility.

The pursuit of chemical extraction from coal fuels technological innovation and research opportunities. Companies investing in this field can drive advancements in extraction processes, develop novel catalysts, and explore more efficient ways to utilise coal resources. 

Moreover, collaboration between academia, research institutions, and businesses can foster knowledge exchange and promote the discovery of new applications for coal-derived chemicals. Such innovation not only benefits individual companies but also contributes to the growth and progress of the wider chemical industry.

While the future of coal mining in Australia may face uncertainty, there exists a promising opportunity for the extraction of valuable chemicals from coal. By adopting advanced manufacturing processes, Australian mining can contribute to the production of methanol, ammonia, DME, and other chemicals, opening new economic avenues and supporting the transition towards cleaner energy sources. It is imperative that the industry continues to innovate, ensuring that environmental considerations remain at the forefront. 

Through responsible and sustainable practices, Australia can maximise the potential of its coal reserves while contributing to a greener and more prosperous future.

Picture: supplied

Jan Kwak is Regional Managing Director for Hatch in Australia-Asia. Hatch is an award-winning multidisciplinary leader in delivering engineering, operational and development projects in the metals, energy and infrastructure industries.

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