A new concept of direct gasification of pulverized coal in a stream reactor has been studied by mathematical simulation of the process. The new method presumes that gasification of pulverized coal will occur in the annular region of a cylindrical reactor during the co-current flow of coal-oxidant mixture in the peripheral zone and hot combustion products-serving as a heat soure-in the core region of the reactor.The paper presents a model of the process which was treated as a reactive, multi-component, two-phase mixture flow with simultaneous combustion in the core and coal gasification in the peripheral annular region ofthe reactor, with radiative heat exchange between the two co-current streams. The gas phase was described in the Eulerian frame and the discrete phase in the Lagrangian frame with the account of the mutual mass and heat transfer between the two phases. The closure of the transport equations for the gas phase was achieved by applying a version ofthe k-6turbulence model modified, to account for the mass and momentum exchange between the phases due to chemical reactions. Heterogeneous chemical reactions of coal were treated in the kinetic-diffusion regime and the radiation heat exchange was modelled by a six-flux model. The model,verified in an example of pulverized coal combustion, showed that the concept is feasible and yielded basic information for the design of an experimental rig for a final verification of the concept.