Klanath was a major mining outpost that grew into a city at the beginning of the War of the Mountain. The city grew at an amazing rate, complete with a palace and protective outer wall. The settlement sprawled for miles with a vast network of pits and shafts throughout the city. The importance of this settlement was significant since it supplied the Ergothian Empire with half of its iron, nickel, and coke. Copper and tin were also mined, however in smaller quantities.
For years the humans took over the Dwarven mines and destroyed their villages pushing the dwarves further and further into the mountains. Under the leadership of the great Ergothian warlord Sakar Kane, the realm slowly but surely fell to the Ergothian Empire. The dwarves for the most part had to retreat entirely into the subterranean fortress-city of Thorbardin completely abandoning the surface.
The dwarves struggled to hold onto what lands they had left until a new leader emerged. Under the great Derkin Lawgiver, the dwarven clans united and were able push the humans back and retake most of their lost territory. The dwarven clans waged a massive war against the humans of Ergoth. Marching north, the dwarves attacked and razed the city of Klanath. The dwarves literally dismantled the city piece by piece until there was nothing left. The stone from the former city was re-cut and used to help build the mighty fortress of Pax Tharkas further to the south.
In present day, the site of Klanath is nothing more than a large grassy field situated four miles north of Pax Tharkas. Literally nothing is left of the once great outpost except for a single large cut stone most likely from the former city walls. This single marker serves to remind passers of the former great city. Inscribed upon that stone is a warning to any that might cross the dwarven nation. "Fourth law of Kal-Thax: 'If we are wronged, we will retaliate. We will always retaliate."
- The Swordsheath Scroll, p. 16-17, 37, 248-250, 299