Coal

Coal lumps are harvested directly from coal ore blocks, which must be destroyed using any level of pickaxe. After this, they cannot be reverted back into block form.

They are quite efficient as a source of fuel for Furnaces, being able to smelt eight units of ore per lump of coal (hence eight lumps will smelt a full stack of 64 ore units)... although Planks are the best renewable option (albeit a much less efficient one in terms of time spent, at least, until your nearby coal supplies are exhausted). Coal lumps and Charcoal are also the only fuels accepted by Powered Minecarts (providing approximately four minutes of transit each), although, again, Minecart boosters may be a better fast-transit choice in the long run.

The only purpose for which coal could be considered required is the creation of torches, which are essential for prolonged underground exploration - although there are other permanent light sources, none come close in terms of convenience and availability (carrying 64 lumps of coal allows you to craft up to 256 torches (assuming you have at least eight Logs with you), and odds are you will be harvesting yet more coal as you dig). Perhaps the best alternative to coal-based lighting would be Netherrack, which, if manually ignited, will burn forever.

Coal is no longer as necessary to in-game survival, as Charcoal can be used as a cheap, renewable alternative.

Torches can be crafted from a coal rock and a Stick. They come in stacks of four.