Preferability Letter


May 11, 1999



Board of Directors
Arch Coal, Inc.
CityPlace One, Suite 300
St. Louis, Missouri 63141

Dear Sirs:

Note B of Notes to the Condensed Consolidated Financial Statements of Arch Coal,
Inc.  included in its  quarterly  report on Form 10-Q for the period ended March
31, 1999 describes a change in the method of accounting for the  depreciation of
its  non-mobile  mine equipment  (consisting  of preparation  plants and loadout
facilities)  from the  straight-line  method to the  units-of-production  method
which is based on tons produced, subject to a minimum level of depreciation. You
have advised us that you believe  that the change is to a  preferable  method in
your  circumstances  because  the  units-of-production  method  recognizes  that
depreciation  of this equipment is  substantially  related to both physical wear
due to usage and also due to the passage of time. This method,  therefore,  more
accurately  matches  costs and revenues  over the lives of the  non-mobile  mine
assets.

There are no authoritative criteria for determining a 'preferable'  depreciation
method based on the  particular  circumstances;  however,  we conclude  that the
change in the method of  accounting  for the  depreciation  of  non-mobile  mine
equipment is to an acceptable  alternative  method which, based on your business
judgment to make this change for the reason cited above,  is  preferable in your
circumstances.  We have not  conducted  an audit in  accordance  with  generally
accepted auditing standards of any financial statements of the Company as of any
date or for any period  subsequent to December 31, 1998, and therefore we do not
express any opinion on any financial statements of Arch Coal, Inc. subsequent to
that date.

                                          Very truly yours,

                                             /s/ Ernst & Young LLP

                                          Ernst & Young LLP