News from
Ashland Coal, Inc.                             Ashland Coal, Inc


                                               P.O. Box 6300
                                               Huntington, WV 25771-6300
                                               (304) 526-3333
                                               (304) 526-3678 Fax

                                               David G. Todd
                                               Vice President
                                               (304) 526-3755
                                               For Immediate Release
                                               January 27, 1997


ASHLAND COAL AND ARCH MINERAL AGREE IN PRINCIPLE TO COMBINE

         Huntington, WV - The Boards of Directors of Ashland Coal, Inc. and
Arch Mineral  Corporation today jointly announced that they had approved an
agreement in principle  calling for the  combination  of the two companies.
The exchange  ratio to be used for the  transaction  would result in former
Ashland  Coal and Arch  Mineral  shareholders  holding  48  percent  and 52
percent of the combined company, respectively. Further terms and conditions
of the  transaction  are  continuing to be negotiated  and further  details
cannot be made  public at this time.  Consummation  of the  transaction  is
strictly  conditioned  upon the  negotiation  and  execution of  definitive
agreements between the parties,  all necessary  governmental and regulatory
consents and approval by the shareholders of both corporations.