We have demonstrated that the production of carbon nanotubes in large quantities is possible with inexpensive coal as the starting carbon source by the arc discharge technique. It has been found that a large amount of carbon nanotubes of good quality can be obtained in the cathode deposits in which carbon nanotubes are present in nest-like bundles. For the growth of carbon nanotubes, the buffer gas pressure in the reactor is one of the crucial factors. The mineral matter in raw coals may also play an important part in the formation process of carbon nanotubes. (C) 2004 Elsevier B.V. All rights reserved.