They are highly biodegraded and compressed remains of ancient plant and animal materials. Simply put, they are highly decomposed organic materials that have fossilized over a period of millions of years. They provide an available long chain carbon material to the soil structure.
Carbon is a basic element for all life forms.
This carbon matrix thus promotes enhanced soil microbial activity for both indigenous bacteria and those added to the soil, especially michoriza. This aids in the formation of a balanced soil structure for proper plant development. It also is an aid to decomposition of residual plant material, especially thatch. They provide a full spectrum of organic acids that are essential to plant development. Specifically these include humic and fulvic acids.