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Charcoal is a renewable resource created by smelting wood in a furnace. The main use of charcoal is to fuel furnaces and make torches. In most cases, this way is much easier then finding coal. It can also be obtained while burning trees. The trees drop wood when burnt. Charcoal, when used as fuel, can smelt 8 items before burning out. This is much better than wood (3 items) and wooden planks (1 item), making it worthwhile.