(1) If
the lessee fails to comply with any provisions of state law relating to coal
leases, the provisions of these rules, or the provisions of its coal lease, the
department shall give lessee written notice specifying such failure. Lessee
shall have a period of 60 days following such notice to cure the
failure so specified. Failure to so cure may result in cancellation of the lease by
the board. Any lessee whose lease has been so canceled has the right to a
hearing pursuant to the Montana Administrative Procedure Act and the
regulations of the department.
(2) Upon a finding at a hearing
held in accordance with the Montana Administrative Procedure Act, that a lessee
has contracted with any foreign interest for the sale of coal, the lease shall
automatically terminate.