Large quantities of rejects from coal processing plants are currently disposed of as waste piles or in ponds and rivers, resulting in environmental concerns including pollution of rivers and ground and surface water contamination. This work investigates for the rst time, a two-stage microbial process for converting coal processing wastes to methane, involving (1) fungal solubilisation of coal rejects and (2) microbial methanation of the solubilised products. Phanerochaete chrysosporium, Trichoderma viride and Neurospora discreta were screened for their ability to solubilise coal rejects. N. discreta was found to be the most suitable candidate based on the extent of bio-solubilisation, laccase activity, and reversedphase high performance liquid chromatography (RP-HPLC) analysis. Bio-methanation of fungalsolubilised coal rejects was carried out in mesophilic anaerobic reactors with no additional carbon source, using inoculum from an anaerobic food digester. Coal rejects solubilised by N. discreta produced 3 to 6-fold higher methane compared to rejects solubilised by the other two fungi. No methane was produced from untreated coal rejects, demonstrating the importance of the fungal solubilisation stage. A total of 4.1 mmol methane was generated per gram of carbon in 15 days from N. discreta-solubilised coal rejects. This process offers a timely, environment-friendly, and sustainable solution for treatment of coal rejects and the generation of value-added products such as methane and volatile fatty acids.