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Talabira-I coal mine located in Sambalpur district of Orissa represents the southern most extension of Ib-valley coalfield. The deposit occurs within Barakar formation. It is a synclinal sub-basin deposit with a circular strike having 5° to 10° dip towards the centre. Talabira-I block consists of a total of seven coal seams, of which, Rampur top is the thickest one. This paper provides a geology-controlled geostatistical modelling approach to the estimation of coal quality parameters and grade requirement for mining by continuous surface miner in respect of Rampur top seam. Graphical plot of borehole lithologs and correlation of coal bands intersected in the upper 14 m of Rampur top seam has been carried out to obtain the extent of the subsurface litho-units. Classical statistical modelling of variables, viz. thickness, ash, moisture and (ash+moisture) contents revealed a normal distribution for ash and (ash+moisture) contents, and a 2-parameter lognormal distribution for thickness and moisture content. Omni-directional semi-variograms in respect of all the variables indicated adequate regionalized phenomena. Geostatistical estimation carried out employing ordinary kriging technique provided block-by-block estimate maps for all variables. For each of these estimated blocks, gross calorific values were computed. A computer program using MA TLAB programming language has been developed to decide the combination of blocks to be mined by continuous surface miner that would satisfy the specified gross caloric value requirement of power plant. The approach has been tested for a hypothetical set of gross calorific values and further work is in progress in this aspect. [ABSTRACT FROM AUTHOR]