Due to the availability of high ash feedstocks and drift origin, Indian coal washeries face tremendous pressure in maintaining the clean coal yield and handling huge quantities of rejects. Since flotation rejects (tailings) discharged in the form of fine-sized (−500 μ) coal-water-slurry, handling and disposal is an environmental concern and it impacts mine sustainability. As conventional methods for extracting clean coal from tailings reported poor yields, a two-stage process i.e. wet-grinding followed by density-gradient-centrifugal separation was explored and optimized for recovering >80% of the carbon values. Clean coal of 19.2%–21.4% ash with >40% yield was obtained by density-gradient-centrifugation of different ultrafine size (−75 μ) coal-water-slurries at 50% pulp density. However, further reduction in clean coal ash by maintaining the yield was limited due to the hindrance in the movement of the high-ash coal particle caused by particle-particle interactions in a thick slurry. Hence, the pulp density of coal-water-slurry was optimized with the addition of extra water, which resulted in 15.1%–17.3% ash clean coal at an average yield of 54–58% from coal tailings having 34.9%–39.3% ash content. Optimization and kinetics of grinding and density-gradient-centrifugation were studied to check the effect of pulp density and other operating conditions. Ash reduction was mainly due to the removal of silica-based materials, where alumina to silica ratio was increased from 0.394 to 0.475. The petrographic analysis showed that the product coal was rich in macerals with ~60% of vitrinites and ~ 30% of inertinites. © 2021 Elsevier B.V.