Coal can't work as a black powder substitute. Black powder is a mixture of (ideally) 75% potassium nitrate (oxidizer) 15% charcoal (fuel) and 10% sulfur (fuel/catalyst). Coal does contain some sulfur. 0.5% - 5% by dry weight, but by far the most important part of black powder is the nitrate. And those aren't present in coal.
Now you'd also think coal could stand in for charcoal, but quoting from
Wikipedia
Filtering carbon from coal is counterproductive to producing black powder.
Filtering the sulfur is a good source of raw materials. But if we want potassium nitrate, I suggest we go back to the Cave of Mild Peril and filter the bat guano. Ofc we'd need an IC reason to do it.