The carbon and mineral components of fly ash are effectively separated by a continuous air agglomeration method, resulting in a substantially carbon-free mineral stream and a highly concentrated carbon product. The method involves mixing the fly ash comprised of carbon and inorganic mineral matter with a liquid hydrocarbon to form a slurry, contacting the slurry with an aqueous solution, dispersing the hydrocarbon slurry into small droplets within the aqueous solution by mechanical mixing and/or aeration, concentrating the inorganic mineral matter in the aqueous solution, agglomerating the carbon and hydrocarbon in the form of droplets, collecting the droplets, separating the hydrocarbon from the concentrated carbon product, and recycling the hydrocarbon.