The exploding rock random event (AKA: "smoking rock" or "gas") is a Mining random event that occasionally happens when a player tries to mine a rock after the point at which it begins to "steam/smoke/bubble". When this happens, the player should stop mining the affected rock immediately. After mining that rock for more than a few more seconds, the rock will explode which will break the player's pickaxe (see broken pickaxe) making it unusable. It will also damage the player for a number of Hitpoints (based on the player's Hitpoints total) and it may even kill them if their Hitpoints were already greatly reduced.
Explosion of an exploding rock does not cease the smoke from puffing and therefore an exploding rock can explode again if it were mined again or mined by another player.
Pickaxes can be fixed by Nurmof in the Dwarven Mine and at Bob's Brilliant Axes in south Lumbridge as well as at the battleaxe shop in Port Sarim. There is no charge for bronze, iron and steel pickaxe repairs, but there is an escalating fee for pickaxes made of mithril and above. Note that only damaged pickaxes can be repaired... a broken pickaxe that has a lost handle cannot be fixed by the NPCs. To remedy this situation, you must use the pickaxe handle (not to be confused with a wood axe handle) on the pickaxe head to fix it.
This event serves the purpose of discouraging macroing by players in RuneScape, and was instituted as a preventative measure by Jagex. It is one of the many counter-bot measures they have placed on activities that require long work, like Fishing and Woodcutting.