This study examines environmental pollution and health costs faced by miners working in underground coal mines in Balochistan. The required information is obtained through primary source of data and questionnaire consisting of 300 samples size. It was analyzed through Double-hurdle model technique using Stata software. Results indicate that socio-economic and demographic variables such as age, education level, age when work started, income, frequency of illness, living condition, sources of safe drinking water and nationality of the respondents have significant impacts on the decision of getting treatment and costs of illness of coal mine workers. Environment related variables like poisonous gases (CH4 and CO) are positively affecting direct cost of coal mine worker. Structure of coal mines i.e. width of coal seam is negative and statically significant impacts on direct costs of illness of coal mine workers. From results it is concluded that coal mine workers suffered more from different illnesses and their cost of illnesses are much higher as compared to non-coal workers. Among the various possible policy interventions the most important is the strict implementation of The Mine Act, 1923 and also the standards provided by ILO for mining sector. Moreover, protective measures, living environment and physical structure of mines could also be considered as critical policy recommendations. Supervisor:- Dr Abedullah