Such fires sound bizarre, but they aren't actually too unusual. Similar underground fires hit coal regions around the world: there’s a lot of fuel down there to burn. The fire covered some 923,500 square metres, fuelled by coal 100 metres below ground. Such extensive underground fires are not easy to tame.
The report from the Chinese Coalfield Fire Fighting Project Office says that they drilled into the ground and poured down slurry and water to remove heat, then covered the surface to cut off the oxygen supply. Even then, the area will be closely monitored until 2009 to check that it doesn’t reignite. The tiniest whiff of oxygen could set the whole thing going again. Link