The Jharia basin is rich in coal resources, both coking and non-coking types. High surface and sub-surface temperature variations in the basin are the result of the spontaneous combustion in the coal seams, which dissipates the heat to the surface. The Jharia coalfield (JCF) in India has frequently witnessed large-scale coal fires that have severely damaged the local ecology and economy. The coal fires have severely affected the underlying and overlying strata of the coal-bearing Barakar Formation, causing notably high local geothermal gradient within 40–45 °C/km. Quantifying the effect of rock-mechanical-mineralogical and microstructural properties of rocks is of prime importance for wider applications in areas for exploring and producing geothermal energy. The importance of the assessment of the thermo-mechanical behavior of rocks in underground coal fire areas has come to the fore in the context of geothermal energy, which can significantly reduce the carbon footprint. Geothermal well drilling presents distinct challenges, necessitating a mechanical earth model (MEM) that takes into account rock elasticity and strength properties, in-situ stresses, and appropriate rock failure criteria. The Uniaxial Compressive Strength (UCS) exhibits a bimodal distribution, showcasing coals with a 10–15 MPa range and shales/sandstones predominantly in the range 70–160 MPa. The tensile strength of the rocks is found to be almost 10% of the UCS. The model considers thermal effects on the rock properties and stresses. Variation in thermal stress due to temperature differences between the borehole fluid and borehole wall is utilized to calculate alterations in stresses around the wellbore, which has implications in drilling geothermal wells.