Coal can be classified into following categories in the order of rank.

Peat:  peat is a brown and fibrous mass. It is the first stage of coalification. It is not used as coal for industrial purposes. It has around 90% water in it and has low calorific value (about 5400 kcal/kg.) it is formed by gradual decaying of vegetable matter. It is brown or black in colour and has large amount of water.

Lignite: it is also known as brown coal. It is compact in texture and contains about 60% moisture in it. Lignite on exposure to air absorbs oxygen readily and gets ignited. These are employed as house hold and boiler fuel. Calorific value is about 6500 - 7100 kcal/kg.

The air dried lignite contains about 70% carbon and 20% oxygen. It burns with a long smoky flame. But these are better than peat. Lignite is used for manufacture of producer gas. On carbonization, lignite give tar and ammounium sulphate. Tar can be used in road making and ammonium sulphate is used as a fertilizer.          

Bituminous coal: this is a common coal. It is a compact black material. They show a laminated structure of alternate bright and layers. Calorific value is about 8000 kcal/kg. They are widely used in industries for making metallurgical cokes, coal gas, and steam preparation and in domestic heating.                                                                                               On the basic of carbon content, they may be sub classified into 3 types.

Sub-bituminous coal:  it is homogeneous, smooth and black in colour. Carbon content is 78- 90%. The calorific value is around 6800-7600 kcal/kg like lignite it ignites easily on exposure to atmosphere. It appears like banded bituminous coal. The bands are poorly joined and can be easily split in to slabs. They are non caking coals.

Bituminous coal: these are most common and widely used under the name "koels". These are brittle. Carbon content varies from 78-90%. Calorific value on ash-free basic is about 8000-8500 kcal/kg. It is used in industries for making metallurgical coke, coal gas, steam rising and in domestic heating.

Semi- bituminous coal: carbon content is 90 - 95%. These are used for coke-manufacture. It is the highest grade bituminous coal. Their calorific values are about 8500-8600 kcal/kg.

Anthracite: it is highest rank coal. Carbon content is more than 90%. They are black in colour and hard but brittle. It has lowest volatile matter and moisture. Calorific value is about 8650-8750 kcal/kg. They burn with short flame without smoke. They are used for steam raising, metallurgical processes etc.