The invention discloses a coal combustion catalyst and a preparation method thereof; the coal combustion catalyst is made from, by weight, 20-30 parts of quick lime, 10-20 parts of bauxite, 4-7 parts of ferric chloride, 2-4 parts of calcium chloride, 6-10 parts of tourmaline powder, 3-5 parts of rare earth oxide or rare earth chloride, 2-4 parts of ethanolamine, 3-5 parts of a surfactant, 2-3 parts of a co-catalyst, 6-9 parts of a penetrant, 4-6 parts of a dispersant, and 40-60 parts of water. The coal combustion catalyst is prepared by proportionally mixing the quick lime, bauxite, ferric chloride, calcium chloride, tourmaline powder, ethanolamine, the surfactant, the co-catalyst, the penetrant, rare earth oxide, rare earth chloride and water; the coal combustion catalyst allows full contact between coal and oxygen; redox is achieved under the catalytic action; quick combustion and full combustion of coal are achieved; coal combustion efficiency is improved, pollutant emission is decreased, and clean combustion of coal is achieved accordingly.