Degradation characteristics of Australian coal, from South Blackwater and Ensham coal mines were tested by using the drop test as the first stage of in a project to minimising the percentage of fines generation during transportation and handling through the Gladstone Port Authority's ship loading facilities. The series of drop tests were done with lump size coals, to determine a possible critical height of drop coal for lump degradation. The rate of coal degradation decreased sharply below the critical height and increased significantly above the critical height. The largest drop experienced by coal lumps during ship loading was 30 m. A series of drop tests were planned 3 drops at 10 m, 4 drops at 7.5m, 5 drops at 6 m, 6 drops at 5 m, 10 drops at 3 m, 15 drops at 2 m, and 30 drops at 1 m. The results showed that above 3 m critical heights replacing large drops with a number of smaller drops could reduce the fines generation. The presence of more than 10% of coal fines by mass with lump coal had a cushioning effect, which reduced the lump degradation by as much as 12%. The effects of the end surface were also evaluated by drop tests onto steel plates, conveyor belting and coal stockpiles. The different size of coal did not show significant difference of fine generation. The effect of stabilization of the coal was also evaluated by comparing fresh coal lumps that had been through a handling process. The normal unweathered coal samples were exposed to the weathering condition for 1-month, 3 months, 6 months, 9 months and one year. These weathered coal samples were tested with the drop breakage apparatus and compare with the drop test results of normal unweathered coal. It was found that the rate of fines generation of weathered coal increased up to a certain period; thereafter the fines generation became almost constant during drop tests.