Two environmental groups are challenging the permit for a proposed 792-acre surface mine in Pike County.
The Sierra Club and Kentuckians for the Commonwealth argue that the state didn't properly assess the mining operation's potential impact on nearby streams.
The coal company also didn't design the mining and reclamation plan to properly limit the impact of valley fills, the groups said in their challenge.
Runoff from the mine near Elkhorn City would cause water-quality violations in several watersheds, or worsen problems that already exist, the groups said.
The state issued a permit for the mine to Cambrian Coal Corporation last month.