The present research was carried out to examine the health and environmental impacts associated with coal mining activities in the Makarwal coal mining area in Pakistan. To achieve the objectives, 41 soil samples were collected from the coalmine-affected areas and analyzed for major and toxic trace elements (TTEs) using atomic absorption spectroscopy. Most of the soil samples have extremely high concentrations of toxic metals such as Ni, Cd, Cr, Cu, Zn, and Pb. The positive correlations and high concentration of trace elements in the Makarwal coalmine-affected region suggest an analogous origin of soil contamination. The factor analysis (FA) showed two components, i.e., F1 (53.4%) and F (74.21%), of total variability for soil. The F2 was loaded with Pb, Zn, Ni, and Cr, which was similar to cluster 2, while the F1 was loaded with Cu and Cr, having a similar pattern to cluster 1. This proves that the contamination in the surrounding area is mostly associated with geological ore strata existing in the Makarwal coalfield. Based on geoaccumulation (Igeo), the elemental concentration in the studied soil sample could be categorized as follows: (1) Pb, Ni, and Zn are moderate to severely polluted and (2) Cr and Cu are in the moderately polluted category. The ecological risk indices (ERIs) of the single trace element contamination index highlighted that Cd, Pb, Ni, and Cr pose a high risk to humans and the ecosystem. Based on different statistical tools performed for the source identification and distribution of metal contamination, it seems that the exposed sedimentary rocks, including limestone, dolomite, sandstone, and coal, are responsible for the toxic metal contamination in the study area.