A novel coal conversion process was proposed: the method combines "a hydrothermal extraction of brown coal (HT-Extraction)" and "a catalytic hydrothermal gasification of the extract (CHT-Gasification)" both of which are performed under the exactly same conditions of less than 350 degrees C and less than 20 MPa. Organic compounds in the aqueous phase, extracted from brown coal, was gasified using a novel Ni-supported carbon catalyst developed by the authors, producing combustible gas rich in CH4 and H-2. Through this process performed at 350 degrees C and 18 MPa, an Australian brown coal was almost perfectly converted into 53% of upgraded coal, 23% of methane, and 24% of carbon dioxide on carbon basis. Simultaneously, 4.4 mol of hydrogen was generated from 100 mol of carbon of the coal. This process transferred 97% of energy involved in the raw coal to the products, indicating its effectiveness. (c) 2007 Elsevier Ltd. All rights reserved.