Prepyrolysis of coal as a precursor to its utilization in a power plant or gas turbine is experimentally investigated. The pyrolyzer, 800 mm in diameter and 1500 mm in height, consists of two concentric chambers. Coarse char particles, used like inert medium (“sand” in the sequel). The char is heated in the outer chamber by an external source of heat, such as hot gases. The inner chamber is used for the pyrolysis process of fine coal powder (50 micron), that is fed into it. The heat required for the endothermic pyrolysis process is supplied by the circulating char. Cold tests conducted on the apparatus indicate that the parameters most influencing solid circulation between the chambers are: the aerosol nature of the flow, the sand seals area, and the superficial velocity. The tests show that the intensive recirculation process exists only under very limited range of flow conditions. Outside this range of conditions, sand “bridges” are formed at the seals preventing proper operation. These bridges can be destroyed by strong fluidization at the inner chamber wall. Results of cold and hot tests, including parametric study of the pyrolzer performance, will be presented. The feasibility of the suggested scheme for mild gasification, of a precursor to its combustion in a power plant, will be discussed.