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The Mining Well digs a vertical hole down sending down a shaft using Mining Pipe that it generates itself(which is broken with a single punch) until either bedrock or lava is reached.
The mining well is also used as a recipe component for the Pump:
Place a Pipe on top of the mining well and link it to a chest.
Mining wells do not get many resources, so setting up multiple machines is recommended to gain a decent amount of resources. Usually most people tend to skip the mining well and wait until they can build a quarry as it is much more effective than a mining well, but it does need more energy to run. A quarry also requires a huge amount of resources to build (11 diamonds, 16 gold, and 28 iron, cobblestone, and sticks) so a mining well may be what you make before upgrading to a quarry.
If, however, you do have those resources available to you and a suitable way of powering the quarry then you might as well just skip ahead to the quarry.
Step by Step Guide of UseEdit
You are going to need to build the mining well' (using the recipe above). Place the well where you want it to mine down to bedrock or lava if it comes across it. Place Cobble/Stone Transport Pipes leading from any face of the machine (excluding the bottom, obviously). Do not place them where they might obstruct Engine access. If using redstone engines, place 4 of them on each of the sides with the piping leading out of the top (recommended for redstone engines). If using' any other engine type, use 1 engine on any side (again, excluding the bottom) and the transport pipes leading from any other side. Make sure all of the engines are receiving a redstone signal (this is for all types of engine). Now create a piping system leading from a pipe connected directly from the well and leading to a chest (recommended). If no pipe is connected, everything the well collects will pop out of the top and you may pick them up. Make sure your engines are fueled with the fuel type required (e.g coal, wood etc. for steam, EU for electrical from Cables, redstone signal for redstone etc.). Following these steps will ensure that you make your mining well work. You may add additional types of pipes if you wish to do so (e.g gold pipes to make items move faster through pipes).
Picture Gallery Edit
Video Tutorial Edit