The settlement of Coal River, on the Alaska Highway, derives its name from the large slabs of brown lignite that wash up onto the bars of the Coal River at its mouth, where it joins the Liard River (Geological Survey of Canada Paper 44-28). The coal was used for heating by the army during construction of the highway. The source of the coal is a small Tertiary basin 5 kilometres to the north, which also contains clay deposits. The Coal River occurrence is centred on outcrops of coal and clay on the north side of a sharp bend in the Coal River, 5 kilometres north of the settlement (Geological Survey of Canada Map 46-1962). At least some of the coal was derived from outcrops farther upstream, however.

The Tertiary basin is not well exposed, but has been estimated to be about 15 kilometres in length and 6 kilometres in width, apparently centred in the broad loop in the lower Coal River (Geological Survey of Canada Paper 44-28). It unconformably overlies Paleozoic rocks belonging to Ancestral North America (Geological Survey of Canada Maps 46-1962, 1712A, 1713A). The Tertiary rocks are Paleogene and at least 60 metres thick, and mostly comprise shale, siltstone, sandstone and conglomerate, as well as lesser lignitic coal and clay. They were deposited in a non-marine, probably fault-controlled basin. Such deposits in the Northern Rocky Mountain Trench region have been assigned to the Sifton Formation. The following descriptions are from outcrops in the area, generally along the river, though their precise locations are not certain.

One locality is on the north side of the broad loop in the river, about 9.5 kilometres north of the settlement. Lignite outcrops across the river bed (about 200 metres wide here) forming a rapid, and outcrops along the river bank for about 275 metres (Geological Survey of Canada Paper 44-28). On the west bank, the lignite is 4.5 metres thick and dips 6 degrees northwest. The brown-weathering lignite varies from friable to tough and "woody", containing well-preserved sections of logs. A few hundred metres upstream the same seam was reported to be on fire, emitting steam and fetid gases and leaving a residue of tar. Overlying sand and gravels are caving, and vegetation on the surface is burnt or dying.

Clay outcrops farther downstream, probably at the outcrop on which the showing is centred, about 5 kilometres north of the settlement (Geological Survey of Canada Paper 44-28). Grey to white clay forms outcrops 4.5 metres high on the west bank of the river and can be traced intermittently for a few hundred metres. The total outcrop area of the clay is probably much greater. Its maximum thickness is approximately 12 metres. The stratigraphic relationship between the clay and the lignite coal is not clear, but they are certainly part of the same Tertiary basin.

The clay is composed of illite and kaolinite (Energy, Mines and Resources Technical Bulletin 54). There is also an abundance of very fine quartz in the clay. Another laboratory study reported that the clay is smooth and non-calcareous, plastic, with an average shrinkage on drying of 6 per cent (Geological Survey of Canada Paper 44-28). The refractory properties of the clay preclude its use as a fireclay, but it was considered to be suitable for stoneware or other ceramic products.