In the upper coal surface in the Latrobe Valley, craters known locally as fireholes have developed due to prehistoric coal fires. They can be several hundred metres across and up to fifty metres deep, and are now filled with overburden materials varying from hard baked clays to very soft lacustrine clays. In addition to reducing coal reserves, continuous mining operations are seriously affected by fireholes. Large undulations in the upper coal surface result in a mixture of coal and overburden on the upper mining levels. The very soft lacustrine clays are unstable in the mine batters and the overburden dump, are difficult to handle on the bucket wheel excavator/conveyer system, and have insufficient bearing capacity for the large bucket wheel excavators. Early identification is essen- tial and both drilling and dynamic core penetrometer have been exten- sively used. However, this has not proved adequate in locating and defining the extent of all fireholes, due largely to their irregular shape. To overcome this a range of geophysical techniques has been trialled with very promising results. A trial area has been covered on a twenty metre grid using gravity and Geonics EM34 conductivity measurements and the same area has been covered at a closer spacing with high resolution magnetics. Image processing of contoured magnetic, EM34 conductivity and residual gravity data has resulted in very good correlation with drilling data.