WASHINGTON – The withdrawal of a permit for a controversial "mountaintop removal" coal mining operation has sparked outrage in the US industry, but was hailed as a victory for environmental protection and the health of nearby communities.

The move Thursday by the Environmental Protection Agency (EPA) to revoke licenses for a major open-pit mine in West Virginia, at the heart of the Appalachian wilderness region, was a landmark move against Mingo Logan Coal Co., a subsidiary of the leading coal producer Arch Coal.

The mine, said the EPA's assistant administrator for water Peter Silva, "would use destructive and unsustainable mining practices that jeopardize the health of Appalachian communities and clean water on with they depend."

Withdrawn to comply with the Clean Water Act, the EPA's decision would halt the practice of mountaintop removal at site known as Spruce 1.

The controversial practice has been determined to have serious environmental impacts, including loss of biodiversity, and adverse human health impacts as toxins associated with the mining process affect regional water supplies.

Senator Jay Rockefeller, a West Virginia lawmaker with strong ties to the mining industry, said he was "deeply angered" by the "unfair" decision, and has written to President Barack Obama to protest the withdrawal of what he described as a "rigorously reviewed and lawfully issued permit."

West Virginia acting Governor Earl Ray Tomblin said the revocation was "devastating" to his state.

"We will continue with all efforts to get this decision reversed," Tomblin said.

Environmental groups such as the Sierra Club meanwhile heralded the move as an "historic step."

The action, "shows that while the coal industry and past administrations have denied the impacts of mountaintop removal mining on local communities, the Obama administration and EPA administrator Lisa Jackson are addressing the importance of environmental justice in Appalachia," said the group.

For the industry, the withdrawal may prove a first blow to its open-top mining in the state.

Mountaintop mining in Appalachia contributes 10 percent of all coal mined in the United States and is roughly 40 percent of the coal mined in West Virginia and Kentucky, according to industry data.

"We remain shocked and dismayed at EPA's continued onslaught with respect to this validly issued permit," Arch Coal spokeswoman Kim Link told AFP.

"Arch will continue to vigorously defend the permit, now in court, along with the right to have a predictable regulatory environment," Link said.

"Absent court intervention, EPA's final determination to veto the Spruce (mine) permit blocks an additional $250 million investment and 250 well-paying American jobs," she added.

Industry defender the National Mining Association said the EPA's decision weakens "the trust US businesses and workers need to make investments and secure jobs," and called the Obama administration's decision an "unprecedented action... at a time of great economic uncertainty."

However, Janet Keating, director of the Ohio Valley Environmental Coalition, supported the move.

"The science completely validates what we have been saying for more than a decade; these types of mining operations are destroying our streams and forests and nearby residents' health," she said.