With respect, if my party is attacked by four or five units, their enemies are going to (in most cases) slowly advance in rank. My sovereign can simply move to the back of the available space, and use the staff. A turn or two later, the enemies are gone, without otherwise touching them. That still seems to me overpowered. Very few enemies can hit your ranks in one turn across a battlefield in the early game and even the mid game. It's a one-shot killer spell on all attacking units, even with a two turn delay.
Finding the Staff of Furnace isn't something you can rely on each game. I had it only once during Beta 4 and not a single time since Beta 5 started. My only experience with Coal Stones is therefore based on my encounters with Wilding Shamans.
Now, let's look on the spell itself. The damage depends entirely on the level of the caster (caster level x 3), is halved if resisted and can be reduced even more with fire resistance. In addition, it has a cooldown of three turns, so it can't be spammed. This all means, that the caster needs a high level and Spell Mastery to be effective. If the enemy has high Spell and Fire Resistance (or Fire Immunity), you're is screwed.
Adding a casting time to Coal Stones will give the enemies a chance to kill the caster (preferably by ranged attack and spells) or use one of the counterspells, if they have one. That the AI isn't currently advancing properly is most likely a bug, that gets hopefully fixed soon. Still, if the enemy didn't manage to prevent the casting and survives the damage, they will have 5 turns (with a casting time of 2) to kill the caster before the spell is ready again. If they don't manage to do that, they would have died even if Coal Stones had not been used.