Otisca industries has been engaged in the preparation, delivery and combustion of over 70 tons (dry) of boiler and engine grade coal/water slurry fuels for over the past five years. The average composition of those fuels as prepared from bituminous coal is 0.8 wt.% ash, 0.8 wt.% sulfut, 50 wt% solid, 100 centipoise viscosity (100 sec-1) and an average particle size of 4 micrometers. Otisca has also performed research on over 100 seams of coal and anthracite. With those tools in hand otisca is convinced that an anthracite/water slurry can be developed which will have ecellent storage and rheological properties and will be capable of maintaining stable combustion in a small industrial boiler such as the existing 75 horsepower fire-tube boiler that will be used in this research program. The proposed program consists of five tasks which include the preparation of two slurries: one with a particle diameter in the range of 150umxo and the other 20umxo; and an in depth development of the rheology of those anthracite/water slurries consistent with our knowledge of the specifications which are necessary for storage and atomization. With the specifications in hand, an in-house pilot plant will produce about 1000 lbs (dry) of each anthracite/water slurry for combustion testing in the existing fire-tube boiler to establish the combustion efficiency of that fuel. All data will be reviewed in the final report which will also include an economic analysis and conversion costs