"Coal Dust", or Seacoal in the industry vernacular is used primarily as a plasticizer at the metal/mold interface. It becomes flexible at high mold temperatures and allows the mold to give, rather than crack from thermal shock.
The Seacoal also burns out during the pour and causes the surface of the mold to loose it's bond and release from the casting more readily during "Shake Out".
The reducing atmosphere is commonly cited, but is of indeterminate value. Many scientists disagree as to this effect which is often referred to as "Lusterous Carbon" or even "Ludicrous Carbon" by it's detractors.
Coal used in castings MUST be of a low sulphur variety, and is not dust, but actually a carefully ground and classified EPA compliance grade of coal.
Other sand additives include, but are not limited to....
Soda Ash
Cobb Flour (ground corn cobbs)
Wood Flour (trade name Cellflo)
Cereal Binder (ground corn kernal with the skins removed)
Corn Starch
Dextrin
Gilsonite (asphalitc resin, or hardened tar)