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Coal is used to make Torches by placing a lump of coal directly above a Stick while crafting. It can also be used as fuel for a Furnace or a Minecart with Furnace . When used in a furnace, each piece of coal burns for enough time to smelt/cook 8 items/blocks.
When Wood (Of the trees) is smelted in a furnace ,it produces Charcoal . Charcoal can be used as a substitute for coal. It is also possible to use saplings as a fuel, but they are less efficient, take considerably longer, and can be planted to make new trees which produce valuable resources.