I decided to write a new answer, because both of already existing are in my opinion quite unclear.
To get some Smoking Coal first of all you need to meet Shlorg .
Aneg351 mentioned about Weakened Shlorg, but nope. You'll see just Shlorg - immortal stage.
Just after you enter the spawn situation looks like on the screenshot. As you can see, there is no Smoking Coals.
So now you have to hit the boss in its immortal stage few times with SDs or deal noticable damage (I killed with avalanche/great fireball runes rest of monsters, hiting Shlorg at the same time and it wasn't enough). Thanks to this on the floor will appear Smoking Coals . Unfortunately just a few on each stack (as I remember firstly it is max 3 per stack, but I might be wrong). Now you have to take one of the coal and burn up the basins, to change immortal stage of the boss into his weakened version.
And now, I have to add something very important in case if you want to collect Smoking Coals - the longer is your fight with a Weakened Shlorg, the more Smoking Coals appear on the floor. For example when I kill the boss I can take only 12 coals per fight. When long time ago a low level player killed the boss, I have found more than 70 coals. The difference is big, isn't it?
Okay, now I think it's nothing more to add.