The ability to make charcloth in a pinch is a valuable survival skill to have. It's simple, effective, and the materials are readily available. A metal container, something to punch your hole, some kind of natural fiber, and a heat source. After that its all down hill with the addition of one strong spark, such as that from a ferrocerium rod, flint and steel, or even a spent BIC lighter.
STEP BY STEP:

Step 1: Gather materials.
For this project the materials you'll need are as follows: a metal tin with a tight lid, an old tee shirt that is 100% cotton or other natural fiber such as fiber from plants, something to puncture a hole in the lid of your tin, and a fire.

Step 2: Puncture you tin.
For this step, I used a household nail that I keep in my kit. You can use your knife (if you're super careful and don't mind dulling the blade) or make a simple wooden stake. Set your lid upside down on a fallen tree or other platform. Place your nail or stake in the center of the lid and lightly tap it with a wooden baton or the back of your ax until it pops through. This will allow gas from the material charing to escape.

Step 3: Charring.
Cut your cloth or fiber into sizes that fit nicely into your tin. I like to use 2" squares. Fill the tin no more than 3/4 of the way with the material. Place the tin into the fires embers. You don't want flames enveloping the tin or coming close to the hole you created or you risk losing your batch. Once placed in the embers, wait 15-20 minutes (could be more or less depending on your tin size), or until all the smoke stops coming out of the hole.

Step 4: Cooling.
Remove the tin from the fire and set aside to cool. Wait until it is cool to the touch before you open it. This is a vital step. If you don't wait, and open tin right away, you'll risk the charcloth igniting itself from the residual heat held in the tin and again, risk losing your entire batch.

Step 5: Ignition.
Pull a piece of charcloth from your tin and place it on a flat surface (I like to close the tin and place my charcloth on the lid so it's readily transferred to my tinder bundle). Next simply apply a small spark or heat source. Some of the best options are ferrocerium rods, flint and steel, quartz and steel, spent disposable lighters, sun rays through a magnifying lens, and many more.
Once a spark lands on the charcloth it will instantly begin to smolder. Lightly blow on it to help establish the ember. After that transfer it to your tinder source where it will continue to smolder.

Step 6: Aeration.
Once you have your smoldering charcloth placed inside your tinder, start lightly blowing into the bundle. Smoke will begin to billow out after a few seconds. Continue blowing into the bundle, a little bit harder now. With a little persistence, a flame will finally emerge from your bundle.

That's all there is to making charcloth and using it to start fires. The beauty of this charcloth tin is it can be reused multiple times simply by adding more char material. It even acts as a handy carrying case for not only the charcloth but also your other fire starting materials. Keep this kit and charcloth handy the next time you need to start a fire without the availability of matches or a working lighter.
Be sure to check back regularly for new how-to and gear review posts and videos. Thanks for stopping by and remember, adventure...is waiting.
~The WG Team