The coal and salt can be combined with some sulphur from the medic's room to make a bomb. There was a book on the starting level, in the room with the 4 locked in guards, which described how to make gunpowder. If you enter the blacksmith's room and kill him, you can drop the bomb on the forge to flood the citadel with lava and move onto act 2, rather than simply taking the stairs.
The only difference between these methods is that you get some experience points for blowing up the forge; there is no cutscene showing the destruction and no differences in later acts.
