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Rare-earth mining company replaces CEO amid SEC probe

Molycorp said Mark Smith's departure from the company, which mines minerals that are crucial ingredients for mobile phones, was unrelated to a regulatory investigation into the company's public disclosures.

Jay Greene Former Staff Writer
Jay Greene, a CNET senior writer, works from Seattle and focuses on investigations and analysis. He's a former Seattle bureau chief for BusinessWeek and author of the book "Design Is How It Works: How the Smartest Companies Turn Products into Icons" (Penguin/Portfolio).
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Molycorp Chief Executive Mark Smith looks over the company's 2,222 acre rare-earth mining and processing operation in Mountain Pass, Calif., this summer. Jay Greene/CNET

Mark Smith, the chief executive of rare-earth mineral mining company Molycorp, was replaced today, a month after the company disclosed it was under a Securities and Exchange Commission investigation regarding the accuracy of its public disclosures.

Rare-earth minerals are key ingredients for mobile phones, as well as wind turbines, hybrid cars, and night-vision goggles. The vast majority of rare-earth minerals are mined in China. But Molycorp is one of a handful of Western companies hoping to elbow into that business. This summer, Smith gave CNET a tour of Molycorp's Mountain Pass, Calif., mine as part of a series on the life cycle of iPhones.

Last month, in an SEC filing, Molycorp disclosed that it received a "formal order of investigation" from the agency "regarding, among other things, the accuracy of the Company's public disclosures." The company said it's cooperating with the agency.

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Molycorp spokesman Jim Sims said today that Smith's departure is "absolutely not" related to the SEC probe, and that it was "mutually decided" that Smith leave. The company said in a press release that it's moving from a startup busily opening its mine and acquiring companies to one that needs to focus on operations.

"(T)he Board of Directors believes Molycorp is at a natural inflection point, as it transitions its focus from development to ongoing operations, to bring in a proven business leader with industry experience, a track record of operational excellence, and management experience to execute Molycorp's strategy," Molycorp Chairman Ross R. Bhappu said in a statement.

The board appointed Constantine Karayannopoulos as interim president and chief executive. Karayannopoulos, a director and Molycorp's vice chairman, previously served as president and chief executive of Neo Material Technologies, a company Molycorp acquired earlier this year.