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Forward-Looking Information

This presentation contains “forward-looking statements” – that is, statements related to future, not past, events. In this context, forward-looking statements often address our expected future business and financial performance, and often contain words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” or “will.” Forward-looking statements by their nature address matters that are, to different degrees, uncertain. For us, particular uncertainties arise from changes in the demand for our coal by the domestic electric generation industry; from legislation and regulations relating to the Clean Air Act and other environmental initiatives; from operational, geological, permit, labor and weather-related factors; from fluctuations in the amount of cash we generate from operations; from future integration of acquired businesses; and from numerous other matters of national, regional and global scale, including those of a political, economic, business, competitive or regulatory nature. These uncertainties may cause our actual future results to be materially different than those expressed in our forward-looking statements. We do not undertake to update our forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by law. For a description of some of the risks and uncertainties that may affect our future results, you should see the risk factors described from time to time in the reports we file with the Securities and Exchange Commission.
This presentation includes certain non-GAAP financial measures, including Adjusted EBITDA. These non-GAAP financial measures are not measures of financial performance in accordance with generally accepted accounting principles and may exclude items that are significant in understanding and assessing financial results for ACI or AWR. Therefore, these measures should not be considered in isolation or as an alternative to net income, income from operations, cash flows from operations, earnings per fully-diluted share or other measures of profitability, liquidity or performance under generally accepted accounting principles. You should be aware that our presentation of these measures may not be comparable to similarly-titled measures used by other companies. A reconciliation of these financial measures to the most comparable measures presented in accordance with generally accepted accounting principles has been included at the end of this presentation.

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

Developing nations will increase energy use, putting pressure on global supply

Electricity Usage per Capita Passenger Vehicles per 1,000 People

15,000 600 U.S. U.S.

Italy 12,000 Australia

Australia 450

U.K.

9,000

U.K.

S. Korea 300

-hours per capita Russia

6,000 Italy kilowatt cars per 1000 people S. Korea Malaysia 150

3,000 Russia

Malaysia

Mexico Mexico China India IndiaChina

0 0 $0 $10,000 $20,000 $30,000 $40,000 $0 $10,000 $20,000 $30,000 $40,000 GDP per capita (in U.S. $) GDP per capita (in U.S. $) Source: United Nations’ Human Development Report 2005, 2005 World Development Indicators (World Bank) Slide 3

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

Coal’s advantage:

billions of tons

abundant, secure and widely dispersed of oil equivalent

300

Coal 200 Natural Gas

100 Oil

Russia

North America Europe China Middle East

Africa

Other Asia Pacific India

Central and South America

Based on current production levels and proven reserves, coal should outlast gas supplies and oil reserves by more than 2x and 4x, respectively

Source: Bank of America, BP Statistical Review and Blackwell Energy Research Slide 4

LONG-TERM MACRO FUNDAMENTALSCLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Where will the United States get its future power?

· U.S. dry natural gas production has remained essentially flat since 1997 despite an ever increasing number of rigs in production.

· Since 2000, nuclear utilization has been at or close to 90% and the fleet is aging. At least 40 new units are needed by 2030 just to maintain current U.S. share.

· Hydro power is concentrated in the Northwest. No net additions to capacity are anticipated.

· Renewable energy, including wind and solar, currently represents just 3% of electric generation. Even with rapid growth, source is likely to remain a niche player.

| | | | Source: EIA, ACI and Baker Hughes Slide 5

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Coal is — and will remain — a vital part of America’s energy future U.S. Energy Reserves U.S. Petroleum Supply U.S. Fuel Prices

| | | | (in trillion Btu) (million barrels per day) ($/million Btu at 3/7/08)

>20x $18.16 = $105 per Imports: 60% bbl >10x $9.82

Coal: 94%Domestic 40% $0.84

CoalNatural GasOilDomesticOPEC Non-OPEC PRB NaturalCrude 8800 Gas Oil FOB rail Wellhead (Q2 2008)(April 2008) Source: EIA, Platts, Argus Coal Daily and NYMEX Slide 6

LONG-TERM MACRO FUNDAMENTALSCLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Since 1970, coal has been used in increasingly clean ways in the United States 200% +182% Electricity

150% from Coal

100% 50% 0%

-50% ^NOx ^-33%

-55%

^SO2

-100% ^PM10 ^-83% 1970 1975 1980 1985 1990 1995 2000 2005 2006 •More progress is expected under existing regulations •Higher efficiency rates and carbon capture technologies create opportunities for reducing carbon intensity as well Source: NMA, EPANOx (Nitrogen Oxide), SO2 (Sulfur Dioxide), PM10 (Particulate Matter) Slide 7

LONG-TERM MACRO FUNDAMENTALSCLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Developed nations must adopt climate solutions and export them to developing nations ^CO2 ^{Emission Trends} • China surpassed

(1990 — 2030)

the U.S. in GHG

15 Rest of emissions in 2007 Non-OECD 12 • The growth rate of GHG emissions in

China

developing nations

9 2 is likely to significantly Rest of OECD ^{Gt of CO} United States exceed that of 6 developed nations 3 • Developed nations must invest in more clean coal technology 0research & development 1990 1995 2000 2005 2010 2015 2020 2025 2030 Source: IEA World Energy Outlook 2006, Guardian Slide 8

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Over the long term, clean-coal technologies can broaden market demand for coal A plug-in hybrid is one Coal can be converted Gasification can reduce entry for coal into the into transportation fuel emissions and transform transportation marketcoal into pipeline-quality •At current oil prices, natural gas

· Likely to create coal-to-liquids significant off-peak facilities are

· IGCC and CCS should demand for electricity economically feasible enable coal to prosper in a carbon-constrained world Public policy initiatives aimed at domestic energy security are spurring debate on energy legislation and incentives for clean-coal technology development Source: ACI Slide 9

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

Explosive growth in international coal markets underscores the shortage of energy around the globe Americas Europe/Africa Asia/Pacific Americas expected to Europe/Africa should Asia’s net exports almost double net increase its net projected to decline coal exports in 2008 imports in 2008 significantly in 2008 – Driven by increase in – Significant export – Driven by strong exports from USA declines fromeconomic growth in South Africadeveloping nations Americas imports expected to decline – Large switch from – Severe supply slightly from 2007 domestic to imported constraints in coal in Europe traditional coal – Driven by lower export nations

– Coal production import levels into USA declines in Europe

Global coal supply and demand flows suggest that the world is short of coal by 25 million to 35 million metric tons in 2008

Source: ACI Slide 10

LONG-TERM MACRO FUNDAMENTALSCLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Robust international coal markets also are influencing domestic coal markets U.S. Exports (in million tons) • In 2007, U.S. coal exports reached 80 Steam Coal highest level since 2000

Met Coal

– Higher coal consumption in Asia coupled with severe supply constraints

59 in traditional export nations 49 – Weak U.S. dollar

– Growing global steel demand

· Arch expects U.S. coal imports to decline by 10 million tons in 2008

· Arch expects U.S. coal exports to increase meaningfully in 2008

– U.S. coal increasingly valued for purposes of supply diversification

2006 2007 2008 Source: ACI, NMA and MSHA Slide 11

LONG-TERM MACRO FUNDAMENTALSCLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Rebalancing trends in 2007 have set the stage for stronger U.S. coal markets in 2008 U.S. Coal Industry Trends In 2007:

(2007, in million tons)

· Increased coal consumption and Consumption* +20 reduced production levels helped domestic coal markets to rebalance -15 Production (ACI) • These trends reduced the build in generator stockpiles

U.S. Coal Industry Trends Year-to-date 2008:

(Through January 2008, in million tons)

· Electric generation flat on a tough comp; coal consumption likely up slightly Consumption* +2 • U.S. coal production is basically flat

– Higher PRB production, which is lower-Production +1 Btu, offsets lower production in CAPP

(ACI) • Arch estimates that generators had a 51 days supply at end of January

Source: ACI, NMA and MSHA * Coal consumption for electric generation Slide 12

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

Largest coal plant build-out since 1980 will meaningfully expand coal demand

Anticipated Supply Region for • Build-out of close to 16 GW Coal Plants Under Construction

(in millions of tons) translates into 54 million tons of new annual coal demand over 21 next five years, with substantial increases in 2009 and 2010

· Arch’s reserve base strategically 7 positioned to service more than two-thirds of these new plants

2008 2009 2010 2011+

· More than 9 GW, representing an

PRB CAPP Illinois NAPP Other additional incremental 33 million

tons, is currently in advanced permitting stages

Source: Platts and ACI Slide 13

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Arch Coal is positioned for the future •One of the largest coal producers in the U.S. •Core business is providing U.S. power generators with cleaner-burning, low-sulfur coal for electric generation –Supplies roughly 12% of U.S. coal needs –Provides source fuel for roughly 6% of U.S. electricity •Talented workforce operates large, modern mines •Industry leader in mine safety, productivity and reclamation Source: ACI Slide 14

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

Arch’s national scope of operations and reserve base includes presence in four major U.S. coal basins

Illinois Basin Powder River Knight Hawk Basin 1

1. Coal Creek 2. Black Thunder

¹2 32¹4 43 Western Central Bituminous Appalachia 1. Skyline 1. Mountain Laurel 2. Dugout2. Coal-Mac 3. Sufco 3. Cumberland River 4. West Elk 4. Lone Mountain 2.9-Billion Ton Reserve Base Compliance Low-sulfurPRB WBITILB CAPP (1,753) (460)(376) (338) High-sulfur Source: ACI at 12/31/07 Slide 15

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Arch has one of the industry’s strongest and cleanest balance sheets Net Debt as Percentage of Capitalization Legacy Liabilities of (at 12/31) $3,431 Largest U.S. Coal Companies

(12/31/07, in millions)

83.9%

Workers’ Comp

Post-Retirement Medical Reclamation 58.0% Pension 46.2% 46.0% $1,302 38.9% $759 $389 $337

2000 2002 2004 2006 2007Peer 1 Peer 2 Peer 3Peer 4 ACI

Source: SEC filings compiled by ACI Slide 16

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Arch’s future success hinges on three key pillars of performance Operating the world’s Acting as responsible Achieving superior safest coal mines citizens and good financial results

· Awarded MSHA’s environmental stewards

· 2007 was Arch’s Sentinels of Safety honor

• 2007 was best record for second-best financial for operating the nation’s compliance in Arch history performance on record safest underground coal mines in 2006 and 2007and best among peers • Operated three of top •Ranked first among coal • Earned third National eight most productive industry peers for safety Good Neighbor Awardlongwall mines last year performance last year in four years• Surface mines produced •2007 was second-best • U.S. Department of 170% more tons per year on record for total Interior Award in 2007 for employee shift than incident rate best surface reclamationindustry average in 2007 Source: ACI and Public Sources Slide 17

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Arch’s mines are strategically positioned to capitalize on dynamic trends in coal markets Central Appalachia Western Bituminous Powder River Basin •Timing of start-up of • Export growth and • Eastern supply Mountain Laurel supply pressures in constraints and longwall in 2007 was eastern U.S. will sufficient PRB rail advantageous influence price &nbs p; capacity should pull coal east •Flexibility to sell 4 to 5 • Arch benefits as million tons into largest producer • Arch will benefit from international and rising domestic prices • Have signed domestic metallurgical significant export • In discussions to and PCI marketsbusinessexport PRB coal Source: ACI Slide 18

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

| | | | Arch is advancing clean-coal technology development via a proposed coal-to-liquids plant in Wyoming U.S. Refined Product Consumption Mine-Mouth CTL Plant (in million barrels per day, per EIA)

| | | |

27.6 20.8 Transportation Fuel Chemical Feedstock

2006 2030 Domestic Imports

· Domestic oil consumption needs are growing, and increasingly will • Arch owns an equity interest in be supplied by imports DKRW Advanced Fuels

· CTL can have a positive impact •

^{Proposed plant would capture CO}2

on the U.S. economy, security to enhance recovery and environment in domestic oil fields

Source: EIA and ACI Slide 20

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Arch has undertaken key strategic events over past several years •Completed Organic Expansion Initiatives –Mountain Laurel opened – Central Appalachia (2007) –Skyline Mine reopened – Western Bituminous (2006) –Coal Creek reopened – Powder River Basin (2006) •Secured Cost of Capital Reductions –Asset securitization and commercial paper program (2006, 2007) –Restructured revolver (2006) •Finalized Other Strategic Transactions –Sold select Central Appalachian operations (2005, 2007) –Invested in Knight Hawk Coal; acquired reserves in Illinois (2006, 2007) –Made investment in CTL project developer (2006) –Completed reserve swap and rail spur / loadout sale to Peabody (2005) Source: ACI Slide 21

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

| | | | Arch’s market-driven strategy in 2007 laid the foundation for future success Our strategy delivered Arch’s second-best year for earnings despite a weak coal cycle in the first half of 2007 •Reduced production targets during the weak market cycle –Preserved the value of reserves for future periods •Lowered capital spending –Matched spending with market demand and reduced production levels •Focused on cost control –Reoriented mines to maintain production flexibility •Remained patient in sales contracting –Layered in sales contracts as prices rebounded •Maintained unpriced position for future periods Source: ACI Slide 22

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Arch expects a record performance in 2008 and continued re-investment in core business Earnings Per Share Adj. EBITDA* Capital Spending** (in $millions) (in $millions) $2.00-$2.50$680-$790 $310-$340 $258 $472 $1.21 2007 2008E2007 2008E 2007 2008E

| | | | •Arch expects significant expansion in earnings per share and adjusted EBITDA •Continue to execute a market-driven approach with leverage to the upside potential in coal markets –Low-level of capital spending Source: ACI *Adj. EBITDA reconciliation is at end of presentation ** Excluding reserve additions Slide 23

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

Arch’s selective approach to signing new contracts retains future upside potential

Arch Unpriced Volume Benchmark Coal Index Prices

(in millions of tons at 12/31/07) (prompt quarter delivery, $/short ton and 52-week % price change ) $132.46 +109% 95-105 85-95 $82.25

+98%

$42.75

+27% 15-25 $14.85 +77%

PRB Utah/CO CAPP CSX CIF ARA 2008 2009 2010

8,800 11,700 12,500 11,200

Steam Coal Metallurgical Coal ^{0.8# SO}2 ^{0.9# SO}2 ^{1.4# SO}2 ^{<1.8# SO}2

FOB railcar

Source: ACI, Argus Coal Daily 3/7/08 Slide 24

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

Arch Western Resources is an integral part of Arch Coal, Inc.

Powder River Basin
1. Coal Creek

· Joint venture created in 1998, 99.5% of which 2. Black Thunder is owned by Arch Coal and 0.5% by BP p.l.c.

· Six active coal mines and 2.2 billion tons of reserves, all of which are either compliance 1 or low-sulfur in content 2

1 2

· Represents roughly 10% of U.S. coal supply 3 4 based on 2007 production levels

· Arch Western is an integral part of Arch Coal – Arch reserve acquisitions subleased to Arch Western Western Bituminous

1. Skyline

– Senior notes rated BB- / B1 2. Dugout – Senior notes not guaranteed by Arch Coal, 3. Sufco

4. West Elk

| | | | | | | | | but inter-company note is pledged as collateral Source: ACI Slide 25

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Arch Western Resources Summary Financial Results Sales Volume Sales Price per Ton (in millions of tons) ($/ton) 113.8115.7 105.8 $13.11 $13.31 86.3 $10.65 $8.52 2004 2005 2006 2007 2004 2005 2006 2007 (unaudited) (unaudited) Revenues Adjusted EBITDA* (in $millions) (unaudited, in $millions) $1,541.1 $422.5 $1,491.4 $332.6 $1,126.7$284.4 $735.2 $174.3 2004 2005 2006 2007 2004 2005 2006 2007 (unaudited)

| | | | | | | | | Source: ACI *Adj. EBITDA reconciliation is at end of presentation Slide 26

LONG-TERM MACRO FUNDAMENTALS CLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL

Arch Western Resources Credit Summary

(in $ millions) $1,428 • Arch Western asset base has

$1,152

$1,032 grown in recent years due to

$961 $869 $960 $959

higher price realizations

$676

– Inter-company note has more than doubled since 2004 2004 2005 2006 2007

(unaudited)

Cash & ACI Note Total Debt • Restricted payments

basket permits unlimited inter-company loans, but

5.5x 5.8x

4.6x counts them against basket

4.3x 3.1x 3.4x 3.1x

2.3x • Based on Arch Coal guidance, Arch Western credit profile should strengthen even

2004 2005 2006 2007 further

(unaudited) in 2008 Adj. EBITDA* Interest CoverageTotal Debt/Adj. EBITDA* Source: ACI *Adj. EBITDA reconciliation is at end of presentation Slide 27

LONG-TERM MACRO FUNDAMENTALSCLIMATE CONCERNS AND CLEAN-COAL TECHNOLOGIES CURRENT TRENDS ABOUT ARCH COAL Arch is poised to generate – and rigorously prioritizes the use of – free cash flow

· Invest in core businesses to enhance profit growth and return on capital; evaluate opportunities to further upgrade and expand reserve base

· Maintain strong balance sheet

· Consider acquisitions, divestitures or other investments that strategically fit and create value

· Expand market for coal (and perception of coal’s value) through coal-conversion technologies that provide significant upside Source: ACI Slide 28

EBITDA Reconciliation Chart

Included in the accompanying presentation, we have presented certain non-GAAP measures as defined by Regulation G. The following reconciles these items to net income as reported under GAAP.

Adjusted EBITDA is defined as net income before the effect of net interest expense; income taxes; our depreciation, depletion and amortization; expenses resulting from early extinguishment of debt; and other non-operating expenses. Adjusted EBITDA is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded to calculate Adjusted EBITDA are significant in understanding and assessing our financial condition. Therefore, Adjusted EBITDA should not be considered in isolation nor as an alternative to net income, income from operations, cash flows from operations or as a measure of our profitability, liquidity or performance under generally accepted accounting principles. We believe that Adjusted EBITDA presents a useful measure of our ability to service and incur debt based on ongoing operations. Furthermore, analogous measures are used by industry analysts to evaluate operating performance. Investors should be aware that our presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. The table below shows how we calculate Adjusted EBITDA.

Arch Coal, Inc. and Subsidiaries

Targeted Results Year Ended Year Ended 12/31/07 December 31, 2008 Low High (in $000s) (Unaudited)

Net income $174,929 $290,000 $362,000 Income tax expense (19,850) 25,000 58,000 Interest expense, net 72,265 85,000 80,000 Depreciation, depletion and amortization 242,062 280,000 290,000 Expenses from early debt extinguishment and other non-operating 2,273 — -

Adjusted EBITDA $471,679 $680,000 $790,000

Source: ACI

EBITDA Reconciliation Chart

Included in the accompanying presentation, we have presented certain non-GAAP measures as defined by Regulation G. The following reconciles these items to net income as reported under GAAP.

Adjusted EBITDA is defined as net income before the effect of net interest expense; minority interests; income taxes; depreciation, depletion and amortization; expenses resulting from early extinguishment of debt; and other non-operating expenses. Adjusted EBITDA is not a measure of financial performance in accordance with generally accepted accounting principles, and items excluded to calculate Adjusted EBITDA are significant in understanding and assessing AWR’s financial condition. Therefore, Adjusted EBITDA should not be considered in isolation nor as an alternative to net income, income from operations, cash flows from operations or as a measure of our profitability, liquidity or performance under generally accepted accounting principles. We believe that Adjusted EBITDA presents a useful measure of AWR’s ability to service and incur debt based on ongoing operations. Furthermore, analogous measures are used by industry analysts to evaluate operating performance. Investors should be aware that the presentation of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. The table below shows how we calculate Adjusted EBITDA.

Arch Western Resources

Year Ended December 31,

2004 2005 2006 2007 (in $000s) (Unaudited)

Net income $ 32,946 $ 128,844 $ 287,013 $ 201,165 Minority interest 1,022 24,219 28,902 20,496 Interest (income) expense, net 35,012 20,310 (9,580) (27,536) Depreciation, depletion and amortization 80,703 98,347 108,272 135,294 DD&A — Equity interest in Canyon Fuel Company, LLC 10,359 — - -Expenses from early debt extinguishment and other non-operating 14,295 12,688 7,928 3,146

Adjusted EBITDA $ 174,337 $ 284,408 $ 422,535 $ 332,565

Source: ACI