Exhibit 5.1

                  [Letterhead of Cadwalader, Wickersham & Taft]

July 14, 1998

Lodestar Holdings, Inc. 
Lodestar Energy, Inc. 
Eastern Resources, Inc.
Industrial Fuels Minerals Company 
c/o Lodestar Holdings, Inc.
30 Rockefeller Plaza, Suite 4225
New York, NY 10112
     
Re:  Registration Statement on Form S-4 related to 11 1/2% Senior Notes due 
     2005, Series B  
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Gentlemen:

We have acted as special counsel for Lodestar Holdings, Inc., a Delaware 
corporation ("Lodestar Holdings"), Lodestar Energy, Inc., a Delaware 
corporation ("Lodestar Energy"), Eastern Resources, Inc., a Kentucky 
corporation ("Eastern Resources"), and Industrial Fuels Minerals Company, a 
Michigan corporation ("Industrial Fuels"), (collectively, the "Issuers") in 
connection with the preparation of the Issuers' Registration Statement on 
Form S-4 pursuant to the Securities Act of 1933, as amended (the "Securities 
Act"), being filed with the Securities and Exchange Commission (the 
"Commission") on the date hereof and to which this opinion letter is an 
exhibit.  The Registration Statement relates to Lodestar Holdings' offer to 
exchange its 11 1/2% Senior Notes due 2005, Series B (the "Exchange Notes") 
for any and all of its outstanding 11 1/2% Senior Notes due 2005, Series A 
(the "Old Notes").  The Old Notes were issued, and the Exchange Notes are to 
be issued, under an indenture, dated as of May 15, 1998 (the "Indenture"), by 
and among Lodestar Holdings, as issuer, and Lodestar Energy, Eastern 
Resources and Industrial Fuels, as guarantors (collectively, in such 
capacity, the "Guarantors"), and State Street Bank and Trust Company, as 
trustee.

In rendering the opinions expressed below, we have examined and relied upon, 
among other things, (a) the Registration Statement, including the Prospectus 
constituting a part thereof, (b) the Indenture filed as an exhibit to the 
Registration Statement and (c) originals or copies, certified or otherwise 
identified to our satisfaction, of such certificates, corporate, public or 
other records, and other documents as we have deemed appropriate for the 
purpose of rendering this opinion letter.  In connection with such 
examination, we have assumed the genuineness of all signatures, the 
authenticity of all documents submitted to us as originals, the conformity to 
original documents and instruments of all documents and instruments submitted 
to us as copies or specimens, and the authenticity of the originals of such 
documents and instruments submitted to us as copies or specimens.  We have 
also made such investigations of law as we have deemed appropriate.  In 
addition, we 




Lodestar Holdings, Inc. 
Lodestar Energy, Inc. 
Eastern Resources, Inc.
Industrial Fuels Minerals Company 
c/o Lodestar Holdings, Inc.
July 14, 1998
Page 2

have assumed that the Exchange Notes and the guarantees of the Guarantors 
(the "Guarantees") will be executed and delivered in substantially the form 
in which they are filed as exhibits to the Registration Statement. 

Based upon 
the foregoing and subject to the qualifications set forth herein, we are of 
the opinion that:


1    The Exchange Notes and the Guarantees will be legally and validly issued 
     and binding obligations of Lodestar Holdings and the Guarantors, as the 
     case may be, (except to the extent enforceability may be limited by 
     applicable bankruptcy, insolvency, reorganization, moratorium, 
     fraudulent transfer or other similar laws affecting the enforcement of 
     creditors' rights generally and by the effect of general principles of 
     equity, regardless of whether enforceability is considered in a 
     proceeding in equity or at law), when (a) the Registration Statement, as 
     finally amended, shall have become effective under the Securities Act 
     and the Indenture shall have been qualified under the Trust Indenture 
     Act of 1939, as amended, and (b) the Exchange Notes shall have been duly 
     executed, authenticated and delivered, and the Guarantees shall have 
     been duly executed and delivered, as contemplated in the Registration 
     Statement.

2.   The statements made in the Prospectus constituting a part of the 
     Registration Statement under the caption "Certain U.S. Federal Income 
     Tax Considerations," insofar as such statements purport to summarize 
     certain federal income tax laws of the United States of America, 
     constitute a fair summary of the principal federal income tax 
     consequences of an investment in the Exchange Notes.



Lodestar Holdings, Inc. 
Lodestar Energy, Inc. 
Eastern Resources, Inc.
Industrial Fuels Minerals Company 
c/o Lodestar Holdings, Inc.
July 14, 1998
Page 3


We hereby consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to the reference to this Firm in the Prospectus
constituting a part of the Registration Statement under the caption "Legal
Matters," without admitting that we are "experts" within the meaning of the
Securities Act or the rules and regulations of the Commission issued thereunder
with respect to any part of the Registration Statement, including this exhibit.


Very truly yours,

/s/ Cadwalader, Wickersham & Taft