You’re right that there’s not a lot of oxygen underground, that’s why coal seam fires mostly smolder for ages, using up what oxygen is available, or just slowly decomposing under heat without oxygen. The point is that it’s hot enough that it CAN ignite when the time comes. It’s a very insidious process, because the people on the surface can be completely oblivious until disaster strikes.
Then, whe a fissure opens, or a mine shaft is reached, a rush of oxygen can flare up that smoldering in the coal into an actual fire, which can weaken the ground, opening more fissures, delivering more oxygen, and so on in a self sustaining action.
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