The proposed Otter Creek coal mine has experienced a string of delays, having been due for completion in 2013.

The US State Department of Environmental Quality has asked St Louis-based Arch Coal for additional information before it can complete an environmental study of the proposed Otter Creek mine.

The environmental study must be completed before Arch can apply for the permit to mine the 1.4 billion short tons of coal, close to the Wyoming border.

In a recent agreement between the state government and Arch, the start date was pushed back from August 2013 to late 2015.

Arch will submit a revised permit application in the coming months. It is predicted it will take at least two years to complete construction on the site and rail line needed to transport the fuel out of Montana.

Arch is also a partner in the proposed Tongue River Railroad that would link the mine at Otter Creek with outside customers.

A draft environmental study is due to be completed by November.

The delay underscores the challenges faced by the current US coal industry as it struggles to increase export volumes in an attempt to offset a decline in domestic demand.

While US exports surged to record levels, much of the growth was driven by coal shipped from the East and Gulf Coasts.

Restricted port capacity is limiting exports from the Powder River Basin, which spans the Wyoming-Montana border.

Success for Otter Creek and another large mine proposed on the nearby Crow Indian Reservation is dependent not just on what happens in Montana, but on the fate of proposed coal export terminals on the West Coast.