Globally, the coal fires are being explored for transforming the waste heat into cleaner energy production. This study was undertaken to investigate the Jharia coalfield (JCF), India, which is largely affected by the unwarranted coal fires. This is the first attempt to assess this burning coalfield for its geothermal potential and engineer the geothermal extraction at a select site in the JCF. Wellbore temperature logs indicated a transient localized high geothermal gradient induced by coal fires in the basin. Geothermal mapping was first undertaken by utilizing the temperature logs of several wellbores, followed by the experimental determination of the thermo-physical properties of the well litho-column and wellbore fluids. These values were incorporated into a heat-transfer simulation for a single wellbore reverse circulation process. The simulations were further utilized to perform a sensitivity analysis for the impact of the operational parameters e.g., insulation thickness of the tubing, flow rate and well depth on the fluid exit temperature. The operational parameters were optimized for maximum net geothermal energy production; the findings revealed that outlet fluid temperatures of 135°F and 187°F may be achieved at the select JCF site by employing insulated wellbores of 1550 ft and 3050 ft depth respectively. An economic analysis of select JCF wells incorporated in the study demonstrated the variation in the power generation costs (ranging from 0.3–0.4 $/kWh to 2.8–3.8 $/kWh) as a result of alteration in the operational parameters. These findings could provide an optimal design for a pilot geothermal plant in the JCF basin.