The Western Canadian coal industry went into crisis in 1992 as a result of the attritional effects of several years of low international prices for metallurgical and thermal coal products in a buyers' market. The adverse marketing conditions for producers were exacerbated by growing financial burdens imposed by increasing capital charges and high operating costs as well as operating problems stemming from a general lack of investment for development and equipment renewal. The crisis led to massive write-downs by several companies and bankruptcy of the largest producer in British Columbia. Co-incidentally with the financial crisis one of the less affected companies became involved in a prolonged strike so that the overall production loss for 1992 amounted to 8.5 Mt or 33% or normal BC coal output. As a result of these events the industry underwent comprehensive restructuring from which four diversified Canadian coal and mining companies emerged with substantially reduced collective capital liabilities as the new backbone of the industry. In the two years since the crisis, recovery of lost markets and redevelopment of the affected BC mines have restored production to 85% of pre-1992 levels on a much-improved financial basis, and expansion plans for 1995 call for a full return to pre-crisis production levels. However, the longer term outlook is grim for two operations and doubtful for a third as existing 15-year contracts expire in 1998 and are unlikely to be renewed under equivalent terms. Closure of the mines involved is a distinct possibility with permanent loss of 6–8 Mtpy of Western Canadian export capability.