Coal is a heterogeneous, hydrogen‐deficient, organic rock. In order to convert to an environmentally acceptable liquid fuel, it is necessary to: (1) add hydrogen; (2) hydrocrack to lower the molecular weight; (3) remove sulfur, nitrogen and oxygen; and (4) separate unconverted coal and mineral residues. Catalysts that are selective for increased oil production without concomitant gas formation are highly desirable. Certain naturally occurring minerals in coal, such as pyrite and clay, have been shown to enhance the liquid yield and product quality. Several high‐volatile bituminous coals (KY No. 11, IL No. 6, WV, PA, etc.), with similar petrographic composition, were liquefied at 425 °C for 30 min. with creosote oil as solvent. As the mineral content of the feed coal increased from 5 to 24 percent, the conversion to benzene solubles increased from 22 to 74 percent. Similar trends were observed when pyrite (pulverized to minus five microns) was added to an Illinois No. 6 coal, which was then liquified at 425 °C using SRC‐II heavy distillate as the solvent. These and other mineral matter effects will be discussed, and the concept of disposable catalysts for coal liquefaction will be introduced. A brief description of the pyrite‐to‐pyrrhotite transformation will be given.