Pyrolysis and catalytic steam gasification of brown coal containing iron hydroxyl complexes have been investigated experimentally and with semi-empirical and density functional theory molecular modelling. Pyrolysis yielded mainly CO2, CO, and reduced iron species. Catalytic steam gasification at 900 degrees C after 15 min, consumed 20 wt.% additional char and a higher than expected yield of H-2 due to post-gasification reactions; inorganic and organic oxygen in char increased compared to pyrolysis. Apparent turnover numbers for catalytic gasification were 12-22 mole of carbon per mole of iron. The distribution of iron species in brown coal indicated small iron clusters are likely to form on heating; pyrolysis was thus modelled using molecules of char with[Fe-3], [Fe-5] and [Fe3O], and the active site for gasification was shown to be [Fe-C]. The mechanism of catalytic gasification involved H2O chemi-adsorbed on [Fe-C], formation of the [Fe <- OH2] coordination bond, with H-2 produced via iron hydride complexes. Formation of CO was via oxygen insertion into [Fe-C] to form [Fe-O-C] that decomposed into CO and another [Fe-C] site. Lower activation barriers were obtained for concerted chemistry involving iron-hydrides. Active sites in char were accessible to H2O as pores had developed around iron species; large sized iron species were not catalytically active but caused large pores to form in char. (C) 2008 Elsevier B.V. All rights reserved.