The Environmental Protection Agency, in an unusual move, revoked a key permit for one of the largest proposed mountaintop-removal coal-mining projects in Appalachia, drawing cheers from environmentalists and protests from business groups worried their projects could be next.

The decision to revoke the permit for Arch Coal Inc.’s Spruce Mine No. 1 in West Virginia’s rural Logan County marks the first time the EPA has withdrawn a water permit for a mining project that had previously been issued.

It’s also only the second time in the 39-year history of the federal Clean Water Act that the agency has canceled a water permit for a project of any kind after it was issued, according to the agency.

The EPA said Thursday it revoked the permit, issued by the Army Corps of Engineers in 2007, because it concluded new scientific research on mountaintop-removal mining since then indicated the potential harm to streams and watershed areas surrounding the Spruce project could be significant.

A spokeswoman for Arch said the company was “shocked and dismayed” by the agency’s decision, which it said would block an additional $250 million investment that would create 250 jobs. The company said it would appeal to the courts.

The EPA “deserves enormous credit for changing policies to protect Appalachia’s health, land and water,” said Mr. Michael Brune, executive director of the Sierra Club.

As the EPA stressed that the permit decision had no implications beyond the Spruce mine, business groups outside the coal industry said the government’s action raised questions about whether permits previously issued for other businesses could also be revoked, potentially stranding investments and costing jobs even as the economy continues to heal.

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