Coal is an item rewarded for completing the Winter Wonderland or the Silent Night Challenge on Nightmare Difficulty.

With 88 Coal in your item box while standing in your tavern, they will become a Diamond pet . These pets can have stats of up to 800. However due to the difficulty of those maps and the fact that you need 88 coal it is considered very hard to get.

Further more, it is possible to get 'Small Coal' by completing these maps on Medium to Insane difficulty settings. These will turn into a small diamond once you have 88 of them. Since, however, their stats are worse than a Giraffe or a Kobold, they are considered less desirable.

Unlike the Easter eggs from the Easter event, the coal will keep dropping on these maps permanently.[1][2]

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