Degradation characteristics of South Blackwater and Ensham coal from the stockpiles of Gladstone Port Authority were tested by using a drop tests apparatus to minimise the fines generation during transport and handling through the Port Authority’s ship loading facilities. Non-cushioned coal sample of both types of coal dropped on different impact surfaces produced higher percentage of fines than the sample of cushioned coal, initial 10% fines, initial 30% fines and initial 50% fines. The effect of different types of surfaces onto which the coal was dropped with initial fines was determined by dropping onto a steel surface, conveyor surface and coal surface (stockpile). The results showed that the tests with initial 30% fines with lump coal has no significant difference of fines generation in between the three impact surfaces. Both types of coal with initial 10% fines dropped on steel surface produced more fines than conveyor and coal surface. The cushioning effect of fines on coal impact surface was least compare to other coal on different impact surfaces.