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Originally Posted by Legate of Amon Lanc
Yes, I always took that literally - and I like that idea. I assume, since coal, at least in our world's history in the Middle Ages, was mostly the one you "make" from wood, while the Dwarves did actually dig it, it points towards some advanced technology, and therefore probably means working in some Dwarven mines, most likely in the Blue Mountains, where we know Thorin and co. lived for a long time. So, I think it was simply a "working class-Dwarves'" job, while the coal would later be used for Dwarven furnaces, since that coal can produce much more heat than wood and you need high temperatures for making all kinds of super-extra steel and whatnot. So I imagine the Dwarves would be working among their own, but it would be just a very mechanical, "dirty" job for someone as fancy as Thorin..
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Actually the tech level would probably have to be even higher than that. To make really good steel even coal isn't usually capable of generating enough heat; you need to burn it in a low air condtion and turn it into coke. Wood Charcoal usually doesn't make good coke; it has too much ash and sulphur content. So for the dwarves to be able to make the steel they could, coal would be a neccesity as it might be for some of the other metals smelted (I can't think of any others explicit ones off the top of my, but there are some people who think mithril might be a lanthanide metal like platinum, and most of those require extreme heat to smelt. But it would be a low class task, basically the Dwarf equivalent of blue collar work, well below the dignity of an heir apparant.
Just for the sake of completeness, theoretically, Thorin and co. could have still been gem mining as they dug . I'm not saying it was likely, in fact I think it isn't but I should point out that techically, jet is coal (well pre-coal), and yet is considered a minor gemstone.
Incidentally, given ME's very strict creationist orgin and accompanying shorter geological timeline, anyone want to speculate where the coal came from? Did Aule finally get tired of bickering with Yavannah about dwarven wood needs and call into being (or I suppose petition Illuvitar to bring into being). rocks that could burn and take some of the wood's place?