Indonesia has the largest coal reserves in the south-east Asian region. According to estimates from the World Energy Confer- ence, it has reserves of 18 billion mt lignite, 4.4 billion mt sub-bituminous coal and 774 million mt bituminous coal (Wyllie,1988). In recent years, substitution of coal for oil in power plants has been the goal of the Indonesian government since proven deposits of coal are about five times as large as national hydrocarbon reserves and most of Indonesia's power stations are still oil fired. Recently a coal fired power plant has been built in Java Barat, which will have a full capacity of about 3000 MW. It is intended to supply coal for this power plant from Bukit Asam mining area (South Sumatra). Coals from Bukit Asam - which are of the lignite or brown coal type - usually contain considerable moisture . It should be noted that reference to moisture in coal pertains to the total moisture content. This is comprised of what is commonly termed as equilibrium moisture and surface moisture. Surface moisture typically affects combustion process as well as pulveriser performance since it possibly influences the relative ease with which coal may be ground. In practice, the surface moisture produces agglomeration of the fines in the pulverising zone and reduces pulveriser drying capacity because of the inability to remove the fines as quickly as they are produced. This agglomeration has also the same effect as coarse coal during the combustion process because the surface area available for the chemical reaction is reduced, hence the combustion efficiency is also reduced. The influence of the moisture of some coals on their grindability (Hardgrove Grindability Index) has been previously correlated by several authors; some of them will be mentioned later. Those correlations, however, could not be immediately applied to any coal since it is still believed that there are other factors which influence the grindability of the coal, such as type and rank of the coal. The relationship between coal moisture content and its grindability has been investigated by Ellmann and Belter (1955). It was found that, for North Dakota lignites, the grindability varied as the moisture content changed. In Britain, Fitton, Hughes and Hurley (1957) stated that, for Bilsthorpe coal, over a wide range of free moisture content (from air-dried to about 30 per cent moisture), the Hardgrove Grindability Index (HGI) remains virtually unchanged. In addition to that, it was suggested that it would be slightly advantageous to dry the coal below its air-dried moisture content (at temperature 100C) to increase the ease with which coal could be ground, especially for low-volatile coal and high-volatile non-caking coal. Furthermore, it was also concluded that a broad relationship appeared between coal rank and Grindability.