Abstract: There were abundant reserves of Low-rank coals in China, these coals were primarily used for combustion applications but had low added value. Coal-based fluorescent carbon dots, as a novel high-value carbon-based material, were commonly produced using high-rank coal through a strong acid oxidation method. This approach not only generated secondary pollution but also resulted in waste of coal resources. With the country's energy transition and the advancement of the "dual carbon" policy, the clean and efficient utilization of Low-rank coal, along with the development of non-energy conversion methods to produce high-value carbon nanomaterials—such as visible fluorescent carbon dots—has become an innovative approach to enhance the value of coal. This review briefly introduced the molecular structural characteristics and current utilization status of Low-rank coal in China, systematically analyzed various coal conversion and carbon material preparation methods, focused on the progress in the mild oxidation processes and analyzed in detail the effects of different oxidative depolymerization methods and the differences in products. The current status of domestic and international research on the preparation of coal-based carbon dots by different methods was compared. Finally, the ways of high-value utilization of Low rank coal were prospected, and the research aspects of preparing carbon nanomaterials from Low rank coal in the future were pointed out.