First Stage – PeatThis is the first stage in the formation of coal. It is an organic substance which is formed due to the partial decomposition of dead matter. The partial decomposition is due to the accumulation of the matter underwater which cuts off the oxygen supply.
Second Stage - LigniteThis is the second stage in the coal formation. It is a dark brown matter formed due to the pressure exerted by the sediments overlying the organic matter. It consists of traces of plants.
Third Stage – Bituminous CoalThis is the third stage in the formation of coal. It is formed due to the added pressure. This is also called as soft coal.
Fourth Stage - Anthracite Coal This is the fourth stage in the coal formation. It is formed due to the high pressure and high temperature for a long period of time. It is hard, lustrous and has the highest percentage of carbon among peat, lignite, bituminous and anthracite. This is also called as hard coal.