Arch Mineral Corporation
City Place One o St. Louis, Missouri 63141 o (314)994-2725 o Fax: (314) 994-2734



FOR               IMMEDIATE RELEASE
Date:             January 27, 1997
Contact:          Blair M. Gardner
                  Vice President - External Affairs
                  (314) 994-2725, Fax: (314) 994-2734



               ASHLAND COAL, INC. AND ARCH MINERAL TO COMBINE

St.  Louis,  Missouri - 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.