Although most of the magnetite used in dense-medium coal beneficiation can be recovered by magnetic separation, there are small but significant losses. The magnetite losses can be attributed to removal in the wash wastes or uptake into fractures of the coal particles. To determine the relative significance of these mechanisms we studied the magnetic properties of two samples of uncleaned Pennsylvanian bituminous coal and the same coal cleaned with water and also cleaned in a dense medium (magnetite) slurry. Magnetic susceptibility measurements made as a function of temperature indicate that the loss of magnetite during coal beneficiation in a magnetic slurry is due in part to the entrapment of magnetite in coal fractures.