Treacle is an obsolete pharmaceutical term for a medicinal salve, usually given for snakebites, poisons, and various diseases. In the Middle Ages, wells that were believed to contain curative water were known as "treacle wells".
Treacle is a substance used to season a bagpipe bag to keep the bag airtight, and to allow moisture to dissipate. Common ingredients might include beeswax, honey, and secret ingredients.
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Treacle mining is the (fictitious) mining of treacle (molasses) in a raw form similar to coal.
"Treacle" originally meant any kind of a thicky syrupy salve, and it is likely that bituminous seeps from coal deposits were used in traditional remedies, so this may have been the kernel of truth that inspired the joke.
The subject of the Treacle Mine has been a whimsical joke played on children and the gullible since at least the nineteenth century and may go back even further.