The Maoris knew of many occurrences of coal (waro), and most New Zealand coalfields had been located by Europeans before 1870. Recent “discoveries” have amounted to little more than extensions of existing fields, either laterally or in depth. During the First World War, coal displaced gold as the most valuable mineral mined annually in New Zealand. It retained this position into 1960, but was itself then being fast overhauled by the constructional bulk materials – sand, gravel, and crushed rock.

New Zealand's mined coals were formed from peat which in Cretaceous to Miocene times accumulated in swamps that were probably not unlike those of the present-day Waikato and Hauraki plains. They similarly contained the debris of small plants, such as mosses, ferns, and grasses, with the larger trees adding little more than such material as resin. Peat is changed into coal predominantly by the application of heat and pressure, either due to nearby hot volcanic rocks, or, most commonly, to its being buried deeply beneath other sediments. Its alteration can proceed through lignite, sub-bituminous coal, bituminous coal, and finally to anthracite, as first the water content and then the volatile constituents (including gases) gradually escape, and the heating power increases. The production and reserves of coals of these ranks are shown in the map together with the location of all coalfields.

Lignite, in which plant material can still be readily identified, is mined at Charleston (Buller) and in many parts of Canterbury, Otago, and Southland. It has a relatively low heating capacity, and many scattered seams in both islands are considered too poor, on this account, to mine.

Sub-bituminous coals, which are the most widely mined in New Zealand, are dull black in colour, break with a glassy fracture, and are reduced to slack more or less quickly when exposed to the sun and air. All North Island coals are sub-bituminous. The last major Northland mine, Kamo, closed in 1955, and the field is largely worked out, but the reserves of the buoyant Waikato fields – especially Maramarua, Huntly, and Rotowaro – are considerable, and include over 30 million tons of coal suitable for opencast working. The Taranaki field has reasonable reserves, but, like the West Coast sub-bituminous field at Buller Gorge, and the Puponga, Murchison, and Reefton fields where the coals are marginal between sub-bituminous and bituminous, the seams are in relatively inaccessible country or far from the customer, and major developments are unlikely in the immediate future. Sub-bituminous reserves are relatively small at Kaitangata (Otago), where the new Lockington Mine opened in 1957. By contrast, the expanding Ohai (Southland) field with its large Linton, Morley, and Wairaki mines and several opencasts, has ample reserves, including over 6 million tons suitable for opencast working.

Bituminous coals are a brighter black in colour, break into more blocky fragments, and mostly have the property of swelling or “coking” when heated. These are the coals normally used for gas making. Their occurrence is restricted to the west coast of the South Island. Mining problems include the descent of coal off the 2,000 ft Millerton-Stockton-Denniston plateau north-west of Westport, and the structural contortions of seams, and therefore of mine workings, in the Garvey Creek (Reefton) coalfield. At Grey-mouth, large mines have worked in the Runanga, Blackball, Dobson, Rewanui (e.g., Liverpool) and Nine Mile (e.g., Strongman) districts. Some coal at Roa has the highest swelling properties in New Zealand, and possibly in the world. The West Coast's bituminous coal reserves appear ample on paper, but adequate drilling is impossible in this difficult terrain, and the opening of mines is therefore more hazardous than elsewhere. In addition, many seams, especially in Buller, have too high a sulphur content (2–10 per cent) to find a ready market.

Anthracites, which have lost most of their water and gas by natural processes, are steel-black, are composed predominantly of carbon, and have the greatest heating power of all. They are found in the inaccessible Fox River area of the West Coast, and have been mined in Canterbury where a lignite has been altered very locally by a volcanic intrusion.

The thicknesses of New Zealand coal seams are extremely variable, reaching 100 ft in several localities. Most underground mines, however, work seams that range from 6–20 ft in thickness, and have all adopted the “bord and pillar” method of working. An initial driving of a square network of tunnels (“bords”) is followed by a final removal of the remnants (“pillars”) of the coal seam. Power drills and coal cutters are becoming normal mining equipment, and mechanical loaders have been introduced into some larger mines. More commonly, miners shovel the coal into wheeled “skips” which the truckers then manhandle from the face to the steel ropes, for mechanical haulage from the mine. Very few New Zealand mines have been entered by a shaft, and none of these is now working. Hydraulic mining by jets of water, and the transport of coal by water in flumes, have both been adopted at a few mines in Buller and Taranaki. Opencast mining became common about 1944 and opencast production rose from being 16 per cent of the total (i.e., 452,680 tons) in 1945, to 41 per cent (1,120,017 tons) in 1963.

The past output and present reserves of the various coalfields are shown in the diagram. The steady increase in recent years to a record annual production of 3,012,043 tons in 1960 has been due in large measure to the construction of the Meremere Power Station at Mercer which in that year consumed over 600,000 tons. Of the other production, general industry uses about 1 million tons (of which half is consumed by dairy factories, cement works, and freezing works); the domestic consumer uses¾–1 million tons as coal or briquettes and¼ million tons as gas; while railways and shipping are using a steadily declining quantity in the face of competition from oil. The increasing concentration of population in the North Island and the comparative increase in mining costs in the less accessible areas over the last 50 years, have led to an increase of production of the Waikato coalfields from one-eighth to one-half of New Zealand's total, a reduction from one-half to one-third for the West Coast of the South Island, and a marked change from the use of lignite to sub-bituminous coal in Southland and Otago.