from http://www.eia.doe.gov/kids/energyexplained/sources/non-renewable/coal.html
Mining the Coal
Diagram of surface mining. A huge backhoe digs through the top soil, the overburden and then into a shallow coal seam.
Source: Stock photography (copyrighted)
Coal miners use giant machines to remove coal from the ground. They use two methods: surface or underground mining. Many U.S. coal beds are very near the ground's surface, and about two-thirds of coal production comes from surface mines. Modern mining methods allow us to easily reach most of our coal reserves. Due to growth in surface mining and improved mining technology, the amount of coal produced by one miner in one hour has more than tripled since 1978.
Surface mining is used to produce most of the coal in the United States because it is less expensive than underground mining. Surface mining can be used when the coal is buried less than 200 feet underground.
In surface mining, giant machines remove the top soil and layers of rock known as "overburden" to expose the coal seam. Once the mining is finished, the dirt and rock are returned to the pit, the topsoil is replaced, and the area is replanted.
Underground mining, sometimes called deep mining, is used when the coal is buried several hundred feet below the surface. Some underground mines are 1,000 feet deep. To remove coal in these underground mines, miners ride elevators down deep mine shafts where they run machines that dig out the coal.
Processing the Coal
After coal comes out of the ground, it typically goes on a conveyor belt to a preparation plant that is located at the mining site. The plant cleans and processes coal to remove other rocks and dirt, ash, sulfur, and unwanted materials, increasing the heating value of the coal.
Transporting the Coal
After coal is mined and processed, it is ready to be shipped to market. The cost of shipping coal can cost more than the cost of mining it.
About 71% of coal in the United States is transported, for at least part of its trip to market, by train. Coal can also be transported by barge, ship, truck, and even pipeline.
It is often cheaper to transport coal on river barges, but barges cannot take coal everywhere that it needs to go. If the coal will be used near the coal mine, it can be moved by trucks and conveyors. Coal can also be crushed, mixed with water, and sent through a "slurry" pipeline. Sometimes, coal-fired electric power plants are built near coal mines to lower transportation costs.