Recovery of fine coals from coal preparation tailings and recycle of processing water are of both economic and environmental incentives, not only preserving natural resources but also reducing environmental consequences of discharging large volume of tailings. A novel single stage process capable of recovering fine coals in liquid fuels and clarifying water for recycle is described. This process integrates three distinct mechanisms: hydrophobic extraction, electrolytic coagulation, and macromolecular flocculation. Using this process, a combustible recovery greater than 88% at an ash content less than 11% was obtained while producing a clean water containing less than 20 ppm suspended solids from a tailings stream. The final product of coal-in-oil mixture can be a potential fuel suitable for coal-firing boilers and power generators. (C) 2000