The functioning and development of the extractive industry depends on many unusual conditions that are not found in other industries, such as the size of deposits, the level of natural and technical hazards, geographic location, or the method of mineral extraction (open pit or underground). Therefore, it is difficult to use universal development assessment methods for such specific production units. As a result, the research undertaken in this article aims to develop an indicator method for evaluating the development potential of underground hard coal mines. This method is based on a theoretical and practical analysis of the conditions of functioning of hard coal mines, expert research, and multiple case studies verifying the operation of the presented development indicator. The first part of the article is devoted to identifying and analyzing the criteria for assessing the functioning of underground hard coal mines. Next, the essence and methodology of creating and interpreting the proposed indicator was presented. The second part of the article is empirical, and contains the results of the assessment carried out using the developed indicators for five Polish hard coal mines for the years 2011-2015. The results of the research indicate that the most important factors in the development of hard coal mines relate to the geological and mining conditions, and those concerning natural hazard levels. However, during the functioning, the financial conditions and related production conditions, which ultimately determine the survival and development of underground mining plants, gain in significance.