Coal is an ideal heat source for blade forging. The nice thing about it is being able to keep the heat restricted to a small area. Plus it's got the whole romanticism thing going for it.
BUT! In today's world, propane is really hard to beat. It's quick, easy, clean, easy to obtain, gets hot enough for all blade-making tasks, whether it be just forging or forge welding.
Not to be a condescending semantics prick, but I think you're talking about austenitizing when you said "if it will work for tempering"
That's the stage of heating the blade in order to quench it and make it hard.
If you want to use your forge for thermal cycles on steel, to stress relieve and refine grain, then yes it will work, it will also work for austenitizing.
Ideally you would use a digitally controlled salt bath or heat-treating furnace, but a forge will certainly work.
The tempering can be done in the house-hold oven, just make sure to get the blade good and clean before putting it in there.
If you are REALLY green to heat-treating, then do some searching here and with Google. Doing a lot of reading will save you a great deal of failed efforts.
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