SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, DC 20549

                                SCHEDULE 13D

                 UNDER THE SECURITIES EXCHANGE ACT OF 1934

                             (AMENDMENT No. 2)

                             Ashland Coal, Inc.
                              (Name of issuer)

                                Common Stock
                       (Title of class of securities)

                                  043906 10 6
                               (CUSIP number)

                             Thomas L. Feazell
            Senior Vice President, General Counsel and Secretary
                                Ashland Inc.
                             1000 Ashland Drive
                             Russell, KY 41169
                               (606) 329-3333
               (Name, address and telephone number of person
             authorized to receive notices and communications)

                             February 7, 1996
          (Date of event which requires filing of this statement)


         If the filing person has previously  filed a statement on Schedule
13G to report the  acquisition  which is the subject of this  Schedule 13D,
and is filing this schedule  because of Rule  13d-1(b)(3) or (4), check the
following box ____.

         Check the following box if a fee is being paid with the statement.
____  (A fee is not  required  only  if the  reporting  person:  (1)  has a
previous statement on file reporting beneficial ownership of more than five
percent of the class of  securities  described in Item 1; and (2) has filed
no amendment  subsequent  thereto  reporting  beneficial  ownership of five
percent or less of such class.) (See Rule 13d-7.)



                                                        Page 2 of 7 Pages
                             
CUSIP No.  043906 10 6     13D


1        NAME OF REPORTING PERSONS       Ashland Inc.
         S.S. OR I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS
                  61-0122250

2        CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP     (a) /   /
                  N/A                                         (b) /   /

3        SEC USE ONLY

4        SOURCE OF FUNDS   00       (See Item 3)

5        CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO 
         ITEM 2(d) or 2(e)  /   /

6        CITIZENSHIP OR PLACE OF ORGANIZATION
                  Kentucky

       NUMBER OF               7    SOLE VOTING POWER
        SHARES                      10,026,509 shares of Common Stock*
     BENEFICIALLY                   (See Items 1 and 5)
       OWNED BY
         EACH                  8    SHARED VOTING POWER
       REPORTING                        0
      PERSON WITH
                               9    SOLE DISPOSITIVE POWER
                                    10,026,509 shares of Common Stock*
                                    (See Items 1 and 5)

                              10    SHARED DISPOSITIVE POWER
                                        0

11       AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
              10,026,509 shares of Common Stock*          (See Items 1 and 5)

12       CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN 
         SHARES   /   /


13       PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
              55.3% of the shares of Common Stock*   (See Items 1 and 5)


                                                       Page 3 of 7 Pages
14       TYPE OF REPORTING PERSON
              CO





* Includes shares of Common Stock obtainable  through the conversion of the
Class B Preferred Stock into Common Stock before August 18, 1998.



                                                    Page 4 of 7 Pages

                     Securities and Exchange Commission
                           Washington, D.C. 20549
                                Schedule 13D

Item 1.  Security and Issuer
         Ashland Inc. ("Ashland") currently owns 7,274,609 shares of Common
Stock ("Common  Stock"),  par value $.01 per share,  of Ashland Coal,  Inc.
("Ashland  Coal"),  an  increase  of 174,739  shares of Common  Stock since
Amendment  No. 1 to Form 13-D was  filed.  Ashland  also owns 150 shares of
Class B Preferred Stock of Ashland Coal. Each share of Class B Preferred is
presently  convertible into 18,346 shares of Common Stock.  This conversion
rate  increases to 19,596  shares of Common Stock on August 18, 1998 and to
20,846  shares of Common Stock on August 18, 2003.  Carboex  International,
Inc.  ("Carboex")  owns 100 shares of Class C Preferred Stock which has the
same conversion rights as Class B Preferred Stock.
         Ashland  Coal  is  a  Delaware   corporation  with  its  principal
executive  offices  located at 2205 Fifth  Street  Road,  Huntington,  West
Virginia 25771.

Item 2.  Identity and Background
         (a),  (b) and (c)  Ashland  is a  Kentucky  corporation  with  its
principal  executive  offices  located at 1000 Ashland Drive,  Russell,  KY
41169.  Ashland is a large U.S.  independent  refiner and independent crude
oil  gatherer  and  marketer;  a regional  retail  marketer of gasoline and
merchandise;  and a motor oil and automotive  chemical marketer in the U.S.
and  other  countries.  In  addition,  Ashland  is a large  distributor  of
chemicals and plastics in North America; a supplier of specialty  chemicals
worldwide;  a large U.S. highway contractor;  and a producer of natural gas
and crude oil.  Ashland also has equity  positions in Ashland Coal and Arch
Mineral Corporation, both U.S. coal producers.
         The  executive   officers  and  directors  of  Ashland  and  their
principal  occupations  are shown on the attached  Schedule I. The business
address of each executive  officer is shown on Schedule I. Each  director's
business address is Ashland Inc., c/o Office of the Secretary,1000  Ashland
Drive, Russell, KY 41169.


                                                 Page 5 of 7 Pages

         (d-e) During the last five years,  neither  Ashland nor any of the
persons  listed in Schedule I hereto,  has been (i) convicted in a criminal
proceeding  (excluding traffic violations and similar misdemeanors) or (ii)
a party to a civil  proceeding  of a  judicial  or  administrative  body of
competent jurisdiction and as a result of such proceeding was or is subject
to a judgment,  decree or final order  enjoining  future  violations of, or
prohibiting or mandating activities subject to, Federal or state securities
laws or finding any violation with respect to such laws.
         (f)      Each executive officer and director is a U.S. citizen.

Item 3.  Source and Amount of Funds or Other Consideration
         Ashland  has  enrolled  its  shares  of  Common  Stock and Class B
Preferred  Stock in Ashland  Coal's  Dividend  Reinvestment  Plan ("DRIP").
Under the DRIP, the dividends  Ashland  receives on its Ashland Coal Common
Stock and  Class B  Preferred  are used to  purchase  additional  shares of
Ashland Coal Common Stock in open market  purchases.  Since Amendment No. 1
to Form 13-D was filed, Ashland has acquired 174,739 shares of Ashland Coal
Common Stock through the DRIP.

Item 4.  Purpose of Transaction
         Ashland  acquired  the  additional  Common  Stock  for  investment
purposes.  Currently, Ashland has elected five of its executive officers to
Ashland Coal's Board of Directors and has sufficient  voting power to elect
at least one additional director to Ashland Coal's Board.
         Ashland has no current plans or proposals which relate to or would
result in: (a) an extraordinary  corporate  transaction,  such as a merger,
reorganization  or  liquidation  involving  Ashland  Coal  or  any  of  its
subsidiaries;  (b) a sale or  transfer  of a  material  amount of assets of
Ashland  Coal or any of its  subsidiaries;  (c) any  change in the  present
Board of  Directors or  Management  of Ashland Coal other than as described
above;  (d) any material change in the present  capitalization  or dividend
policy of Ashland Coal;  (e) any other  material  change in Ashland  Coal's
business or corporate  structure;  (f) changes in Ashland  Coal's  charter,
by-laws or  instruments  corresponding  


                                                     Page 6 of 7 Pages
thereto or other  actions which may impede  the  acquisition  of control 
of  Ashland  Coal by any  person;  (g) causing  a class  of  securities  
of  Ashland  Coal to be  delisted  from a national  securities  exchange 
or to cease to be authorized to be quoted in an  inter-dealer  quotation  
system  of a  registered  national  securities association;  (h) a class 
of equity  securities  of Ashland  Coal  becoming eligible for  termination 
of registration  pursuant to Section  12(g)(4) of the  Securities  Exchange 
Act of 1934; or (i) any action  similar to any of those enumerated above. 
However, Ashland currently anticipates that it will continue to acquire 
shares of Ashland Coal Common Stock through the Ashland Coal DRIP and 
may, if it believes  favorable  circumstances  are presented, purchase 
other shares of Common Stock or Preferred Stock of Ashland Coal from time
to time.

Item 5.  Interest in Securities of the Issuer
         Ashland  currently  owns  7,274,609  shares of Common  Stock which
constitutes  40.1% of the voting power of Ashland  Coal.  Ashland also owns
150 shares of Class B Preferred  Stock which is  currently  convertible  to
2,751,900 shares of Common Stock.  Assuming such conversion,  Ashland would
be deemed to own a total of  10,026,509  shares of Common Stock which would
constitute  a total of 55.3% of the voting power of Ashland  Coal.  Ashland
has sole voting and  disposition  power over its shares of Common Stock and
Class B Preferred Stock.
         During the past 60 days, Ashland purchased 54,621 shares of Common
Stock through Ashland Coal's DRIP.  Other than this  transaction,  no other
transaction in Ashland Coal Common Stock was undertaken by Ashland.

Item 6.  Contracts, Arrangements or Understandings with Respect to Securities 
         of the Issuer 
         Pursuant to a Restated  Shareholders  Agreement  (the"Shareholders
Agreement")  among Ashland,  Carboex  International,  Inc.  ("Carboex") and
Ashland  Coal,  Carboex  has a right of first  refusal to  purchase  any of
Ashland's  shares of Ashland Common Stock or Class B Preferred  Stock which
Ashland  proposes to sell to a third-party in response to a bona fide offer
and  Ashland  has a right of first  refusal to  purchase  


                                                     Page 7 of 7 Pages

any of  Carboex's shares of Common Stock or Class C Preferred Stock which 
Carboex proposes to sell to a third-party in response to a bona fide offer. 
In addition, if the right of first refusal is not exercised, the Shareholders
Agreement nevertheless requires Carboex's consent for Ashland to sell its 
Common Stock or Class B Preferred Stock and Ashland's  consent for Carboex to 
sell its Common Stock or Class C Preferred  Stock,  which consent in either 
case can not be unreasonably withheld.

Item 7.  Material to be Filed as Exhibits
         None


                                 SIGNATURE
         After  reasonable  inquiry  and to the  best of my  knowledge  and
belief, I certify that the information set forth in this statement is true,
complete and correct.

                                        February 7, 1996
                                        --------------------------------
                                                        (Date)

                                           /s/  Thomas L. Feazell
                                         --------------------------------
                                         Thomas L. Feazell
                                         Senior Vice President, General Counsel
                                         and Secretary of Ashland Inc.



                                Schedule I


                        DIRECTORS AND EXECUTIVE OFFICERS
                                     OF
                                ASHLAND INC.
                PRINCIPAL OCCUPATIONS AND BUSINESS ADDRESSES


                
    DIRECTORS                           PRINCIPAL OCCUPATION*

Jack S. Blanton       Chairman of the Board of Houston Endowment, Inc., and
                      Director and President of Eddy Refining Company,
                      Houston, Texas

Thomas E. Bolger      Chairman of the Executive Committee of the Board of Bell
                      Atlantic Corporation, Philadelphia, Pennsylvania

Samuel C. Butler      Partner of Cravath, Swaine & Moore, Attorneys, New York,
                      New York

Frank C. Carlucci     Chairman of the Board of the Carlyle Group, Washington,
                      D.C.

Paul W. Chellgren     President and Chief Operating Officer of Ashland Inc.,
                      Ashland, Kentucky

James B. Farley       Retired Chairman and Current Trustee of Mutual of New
                      York, New York

Edmund B. Fitzgerald  Managing Director of Woodmont Associates, Nashville,
                      Tennessee

Ralph E. Gomory       President of the Alfred P. Sloan Foundation, New York,
                      New York

John R. Hall          Chairman of  the Board of and Chief Executive Officer of
                      Ashland Inc., Ashland, Kentucky

Mannie L. Jackson     Majority owner and Chairman of the Harlem Globetrotters,
                      International

Patrick F. Noonan     Chairman of the Board of The Conservation Fund,
                      Arlington, Virginia

Jane C. Pfeiffer      Management Consultant, Greenwich, Connecticut

James R. Rinehart     Business and Labor Consultant, Hiram, Ohio

Michael D. Rose       Chairman of the Board of Harrah's Entertainment, Inc. and
                      Promus Hotel Corporation, Memphis, Tennessee

William L. Rouse, Jr. Investments, Naples, Florida

Dr. Robert B. Stobaugh   Professor, Harvard Business School, Boston,
                         Massachusetts




*  For business addresses, see Item 2. 

                                 EXECUTIVE OFFICERS
                      BUSINESS ADDRESS AND PRINCIPAL OCCUPATION

John R. Hall           
P.O. Box 391
Ashland, KY  41114
Chairman of the Board and
Chief Executive Officer

Paul W. Chellgren
P. O. Box 391
Ashland, KY  41114
President and Chief
Operating Officer

James R. Boyd
P. O. Box 391
Ashland, KY  41114
Senior Vice President and
Group Operating Officer

John A. Brothers
Ashland Chemical
Company, a Division of
Ashland Inc.
P.O. Box 2219
Columbus, OH  43216
Senior Vice President and
Group Operating Officer

J. Marvin Quin
P. O. Box 391
Ashland, KY  41114
Senior Vice President and
Chief Financial Officer

Thomas L. Feazell
P. O. Box 391
Ashland, KY  41114
Senior Vice President, 
General Counsel and
Secretary 

Robert E. Yancey, Jr.
P. O. Box 391
Ashland, KY 41114
Senior Vice President and
Group Operating Officer;
President, Ashland
Petroleum Company, a
Division of Ashland Inc.

Harry M. Zachem
P. O. Box 391
Ashland, KY  41114
Senior Vice President,
External Affairs

David J. D'Antoni
Ashland Chemical
Company, a Division of
Ashland Inc.
P. O. Box 2219
Columbus, OH  43216
Senior Vice President;
President, Ashland
Chemical Company, a
Division of Ashland Inc.

John F. Pettus
P. O. Box 14000
Lexington, KY  40512
Senior Vice President;
President, SuperAmerica
Group, a Division of
Ashland Inc. 

Charles F. Potts
APAC, Inc.
3340 Peachtree Rd., NE
Tower Place
Atlanta, GA  30326
Senior Vice President;
President, APAC, Inc.

G. Thomas Wilkinson
14701 St. Mary's Lane
Houston, TX  77079
Senior Vice President;
President, Ashland
Exploration, Inc.

James J. O'Brien
P.O. Box 1400
Lexington, KY 40512
Vice President; President,
The Valvoline Company, a
Division of Ashland Inc.

John W. Dansby
P. O. Box 391
Ashland, KY  41114
Administrative Vice
President; Treasurer

Kenneth L. Aulen
P. O. Box 391
Ashland, KY  41114
Administrative Vice
President; Controller

Philip W. Block
P. O. Box 391
Ashland, KY  41114
Administrative Vice
President

Fred E. Lutzeier
P. O. Box 391
Ashland, KY  41114
Auditor