The Anchor House, Inc.
Research on Rare Earth Elements

The Anchor House, Inc.

Interview with Mark Smith: Part 2

October 20th, 2009

The following interview took place on 17 September 2009. This is the second part of the interview:

COX: How does Mountain Pass compare to Chinese projects?

SMITH: Our goal is to be globally cost competitive.  To produce a pound of rare earth oxide equivalent, we want to make sure that our unit costs  are equal to or less than anybody else in the world.  The processing techniques that we have been working on for seven years are now coming to fruition.  When you couple all these new improvements together, we will be able to produce 20,000 tons of rare earth oxides at Mountain Pass using less than half of the feed stock ore to our mill.  That to us is a demonstration of our commitment to sustainability and to managing the world-class resource that we have in the right way.  We have effectively doubled the life of our resource by improving the processing capabilities on site. We’ve also focused heavily on water consumption.  Our water consumption is going to be dramatically lowered in the full restart project.  WhenYou couple that with a lot of the innovative approaches to managing acid and base material and reagents on site, we are absolutely, 100% confident that we will be cost competitive.

COX: That’s a big statement.

SMITH: It is a big statement.  I want to reiterate, we are 100% confident that we will be cost competitive.  The numbers that we’re seeing already suggest that we will actually have costs below Chinese costs.  And that’s on today’s cost level.  As you probably discovered in your interviews with various people in research in this industry, you know that the Chinese are going through some growing pains right now as well.  And they’re very serious about changing their environmental practices and their health and safety practices.  They want to do things better than they have been doing them and we encourage that.  But that will further increase their costs.

COX: Although they’re also involved in a substantial effort right now to streamline their own processes —

SMITH: Correct.

COX: — and make it a lot more efficient.  So who knows?  Maybe they’ll be able to lower their costs.  I certainly don’t know.

SMITH: Although we also see some other cost issues in China; for example, their labor rates aren’t going down.  There’s lots of variables and we just need to watch them all.  Our goal is to know what those variables are and to make sure that Mountain Pass continues to be the low-cost producer.

COX: So you recently announced the addition of Jack E. Thompson and Major General Charles R. Henry, US Army Retired.  What do these two gentlemen bring to the table?

SMITH: These two gentleman first of all bring independence, which is something that again, I want to compliment our shareholders and our current board members because we all unanimously feel that having independent members on our board of directors is just the right thing to do and it provides additional views that come into our discussions that enhance our ultimate decisions.  Jack Thompson, as you know, has an absolutely wonderful career in the mining industry, well over 30 years in the industry, very, very well connected and extremely experienced.  Jack is an engineer by trade and has practiced engineering for a very long time.  He brings the mining experience, the engineering experience and the general industry connections to us that very few people in the world would have the capability to bring to our board.

Major General Charles Henry, US Army Retired, also brings a tremendous amount of experience to the table.  General Henry has written books on leadership and he’s studied the subject matter extensively.  General Henry brings a level of contacts for us to the Department of Defense that we have not had before and he also has an illustrious career in the United States Army in the procurement area.  He can really provide a lot of help and suggestions to us on how to improve our procurement practices.  When one third of your production costs are tied up into reagents, that’s a huge win for us to get that level of experience on procurement.

COX: What is Rocky Smith’s role at Molycorp?

SMITH: Rocky’s one of the newest members of our team and his role is the general manager at the Mountain Pass facility.  Everything reports to him out at Mountain Pass.  Rocky brings over 30 years of chemical plant and operating experience to the table.  He’s a chemist by trade; has had excellent results in union relationships,; has a significant experience level in solvent extraction; and really brings a level of maturity and wisdom to the site that we are very, very confident with.

COX: So that’s good.  So you brought on Rocky.  Rocky’s ready to roll.

SMITH: Rocky’s ready to roll. [LAUGHTER].

COX: OK.  Fair enough.  So the 2012 production date, do you still think that looks feasible?

SMITH: Absolutely.  There’s no doubt that it’s aggressive.  We recognize that, but we also know how you have to put that data out in front and work backwards.  Three weeks ago we started dewatering the pit, because if we don’t start dewatering the pit now, you can’t lay the overburden back, you can’t have the fresh ore to feed the mill.  So yes, we think it’s absolutely doable, but it is aggressive.

COX: Many deals have closed outside of China this year.  Dong Pao in Vietnam, Sumitomo in Kazakhstan, JOGMEC in America, now in Scandinavia.  Chinese companies trying buy into two Australian firms.  What are your thoughts on these?  And how do you think it is changing your position within the market?

SMITH: When we take a look at all of these deals we certainly first of all want to say that we want to encourage all of these to move forward.  And we want to encourage all of them to achieve production levels to help the industry.  When you take a look at the supply and demand forecasts for this industry we are going to need a lot more projects producing, rare earths, not just mentioning that they’ve been discovered.  Actually producing rare earths, so that we can help China with the projected demand growth for rare earths.  We’re happy to see these projects and we’re particularly happy to see those that involve some of the heavy rare earths because it provides the entire rare earth purchasing industry with more diversity, more alternatives.

When we run our business we look at the procurement area very strategically.  We look for alternatives.  We make sure that we mitigate our risks of having sole suppliers.  We expect our customers to do the same.

We know most of these new rare earth projects actually fairly well.  Molycorp had a very long history of exploration and we have files on just about every single one of these new projects.  We don’t think it’ll change our position in the market a lot, because the production rates from these facilities are not going to become overwhelming for the market all by themselves.  They’re incremental projects at best.  There won’t be anything that competes with Chinese production.  The US will probably be the second largest country producing this material, and then Australia will be third.  These smaller projects will hopefully come in to help the larger producers.

COX: So it’s going to be one big happy rare earth family.

SMITH: Well you know, a competitive one, but certainly it is a small world out there.

COX: So talk to me a bit about the joint venture with Arnold Magnetic Technologies.

SMITH: Our stated business strategy is to go from mining to magnets, and we are very, very committed to that process.  When you take a look at the wind power generation supply chain, you start with mining and you end up with your wind power turbine.  There are a lot of steps in between there.  You start with the mine, and then you have to process the ores into oxides.  The oxides have to be converted into metals.  The metals have to be alloyed, the alloys are turned in a magnetic powder, the magnetic powder is manufactured into magnets.  Then the magnets are put into the generators on the wind turbine, and then the generator goes on top of the wind turbine when it’s finally put out in the field.

When we take a look at that whole supply chain, and all the steps that are required, it’s impossible to put the entire supply chain together outside of China.  There is no place in the world other than China that converts Neodymium or Praseodymium oxide into its metallic form.  We want to make sure that there are options available for the purchasers of magnets that are reliable.  It gets very complicated and , and it creates risk from a procurement standpoint, so we’re committed to making sure there is a full supply chain for mining to magnets outside of China.

COX: So right now you guys can make oxides.

SMITH: Correct.

COX: So you still have to go from oxide to metal, metal to powder, powder to magnet.

SMITH: Correct.  And as an example most of our didymium oxide customers are in Japan.  When we sell our oxides to Japan, our Japanese customers have to arrange for that oxide to be shipped into China, converted to metal, and then shipped back to Japan.  Japan then has all the other steps in their country.  They’re missing that one step, and of course in the United States we don’t have any capability to go from oxides all the way to magnets, because we don’t do any of that in the states anymore.

COX: So what is Arnold Magnetic Technologies, or I’ll call it AMT.


COX: What is AMT, where do they pick up in the process, and where do they finish?

SMITH: We have a letter of intent to form a joint venture for this, and Molycorp will be engaged in mining to alloying on its own, because we know how to do that.  Most of it will occur right on the Mountain Pass site, so that we have close coupled manufacturing, in an effort to minimize our costs.  Oonce we have the alloy, some of  that alloy will probably be sold through the joint venture;  the joint venture being us and Arnold Magnetics.  We will form a new entity, have new facilities that will actually produce magnets, and then the magnets will be sold by the joint venture.  We wanted to choose a very strong magnet company to be a partner of ours, because when you take the final product to a magnet, the sale of that magnet is very different than what we’re used to at Molycorp in terms of selling products.  There is a wide array of users out there.  There’s a much more OEM nature to it where each customer needs something very specific.  Arnold has connections like this already in place.  They’ve been selling magnets to the world for a hundred years or more.

COX: So they don’t make the magnets, or they do make the magnets?

SMITH: They have some joint venture rare earth magnet production facilities in China right now.  And they do have a place over in Europe where they have the equipment to do this, but they are not producing rare earth magnets in the United States.

COX: So they have the technology, the know-how, but they don’t have the facility yet.

SMITH: Not in the United States.

COX: OK.  So to make sure I understand this, you’re going to take the oxides, then you’re going to take and make metals, then the alloys.

SMITH: Correct.

COX: On site at Mountain Pass most likely.

SMITH: Correct.

COX: And so you’ll have to build new facilities for that?

SMITH: Well that’s a great question.  Have you been to Mountain Pass?

COX: I have.

SMITH: OK.  Then you know it’s a major facility in terms of rare earth manufacturing.  If we just took a bulldozer and demolished everything  to the ground, we could build brand new, state of the art facilities, and that would probably cost us $450 million.

COX: Hence the $450 million that you just mentioned in the recent press release.

SMITH: Correct.  And purposefully so.  There doesn’t need to be a secret there.  A brand new facility would cost us $450 million.   We have a facility sitting at Mountain Pass that has produced 20,000 tons per year of rare earth oxide in the past.  What we’re trying to balance is, how much of that equipment can we continue to use such that we lower our capital costs, and at the same time recognize that in all likelihood if you use the older equipment your operating costs are going to be higher.  So we’re trying to balance what the right use of existing equipment, versus building new equipment .

I just mentioned to another reporter earlier today, I think the low end of the number we would be using for this purpose in terms of balancing existing new equipment with new equipment would be probably in the $250 million range.  So the project capital is ultimately going to be somewhere between $250 and $450 million.

COX: Gotcha.  And this $450 million should you use it, will take you all the way through to alloys, is that right?

SMITH: No, that would take us all the way through magnets.

COX: And when you’re back, up and operating, what elements will you actually be extracting, what will be the stopping point?

SMITH: I can tell you precisely what we will produce.  We’ll produce cerium, lanthanum, neodymium, praseodymium, samarium, europium, and gadolinium.  There is only one question in our mind right now.  We do have dysprosium in our ore body, at very low concentrations, but we are looking at what the cost would be to put in the solvent extraction facilities and produce dysprosium out of our ore body.  We’re trying to balance that versus what the price forecasts are for that material.  When you have very low ore grades as everyone else who’s claiming to have discovered rare earths is going to find out when they get into the processing side, it’s a whole new equation when you talk about processing.

COX: Right.  Interesting.  So basically what AMT then is bringing is the technology and the know-how on the backend.

SMITH: And the marketing.  They have the contacts already in place.  Now they do produce ferrite magnets in the United States.  So they do produce magnets, it’s just they —

COX: Just not that juicy, special rare earth kind.

SMITH: Not the rare earth permanent magnets.

COX: And when you talk about magnets with them, they’re neodymium- iron-boron, they’re not samarium-cobalt, correct?

SMITH: That’s correct.  Samarium-cobalt is a very important sector of the market as you know, mostly for defense purposes, but it’s a very small market.

COX: Do you have any plans for new products?

SMITH: We do. For the last seven years as we’ve had a group of people in our technology group working on process technologies.  We’ve also had another group of people working on intellectually protected products and processes, for cerium in particular.  The reason behind this is if you take a look at the light rare earth deposits, which is what Mountain Pass is classified as, and what Bayan Obo is classified as, and what Mount Weld is classified as, the primary component is cerium.  However, CRT production has continued to decline, the use of cerium as a glass polishing agent has continued to decline, and no significant  new uses were coming in.   We want to literally sell every pound of rare earth that we pull out of the ground.

So we focused on big volumetric uses of cerium, and we have come up with some patented products, and patented technologies that will be using rare earth products primarily based on cerium.  If our up coming process tests are successful, which we have every reason to believe they will be, we will have a market for our cerium that will be very, very promising.  What that does for us, and it all goes back to our absolute commitment to be the lowest cost producer, is that by including cerium in our product mix, and selling the cerium, we now get to spread our manufacturing costs over a much larger number of units of production.

COX: So will you license that technology, or will you actually build the technology yourself?

SMITH: We will do both, we will license it, and we will build and operate some of that ourselves.

COX: OK.  Are you allowed to say anything more about this technology?

SMITH: I would love to say more about it.  We think it has a whole lot of win-win propositions to it.  This is a technology that we’re commercializing in the copper and nickel industries right now.  As the copper and nickel industries start to experience higher and higher arsenic levels in their ores, they need to have a way to pull that arsenic out so that they can recover as much of the copper and nickel that they’re trying to produce as possible.  Our product and our process does that, and it does it extremely well.

The other area that we focused on is water treatment.  And we have a product that will go out for sale in the fourth quarter of this year through Cascade Designs, who has been one of our partners in this research effort.  I will be available to the backpacking industry.  We’re also trying to make it available to our soldiers in our military.  The U.S. military asked us to figure out if there was a way to clean up arsenic laden water so our soldiers are safe.  We worked on that, we perfected that, and we can remove arsenic very, very well.  But we started to take a look at how well it could do at removing other contaminants from the water.  And to really put it into summary form, we haven’t found anything it doesn’t remove yet.

In fact as far as we can tell, the biggest problem anybody will have with this water filtration product and process is that you’ll have to take vitamin supplements because there is literally nothing in the water when you’re done.  It’s on the order of distilled water.

COX: There’s still H2 and O.

SMITH: There is, yes.  That’s about all there is.  Which we’re happy to report.  So we plan to start  a very strong marketing effort on that product and that process as well.  We’ll be in the backpacking industry, we’re hoping to serve the military, and as part of our corporate culture which Molycorp has a long history of, we also want to help other people in the world, and so we’re trying to introduce this product and process to some of the Third World countries to try to improve their water quality as well.

COX: How does that compare to other things like SteriPEN and the hand pumps, and the other competing devices for water purification right now?

SMITH: Number one, ours will actually remove many if not all of the heavy metals.  Ours will also deal with biological activity in the water, it removes viruses in the water, it will remove mustard gas, sarin gas.  There really is nothing that our material has not removed yet, and it removes contaminants to what the water industry refers to as a log four level of removal – which is 99.99% removal.  There aren’t any other products that we are aware of that can make that claim on that many items that it can remove from the water.  So it’s kind of a one stop shop so to speak, as opposed to having multiple filters that perform different functions all lined up in sequence.

COX: Is it bigger, lighter, heavier?

SMITH: The size we’re looking at for the military is roughly a six inch long cartridge that is about one to one and quarter inches in diameter, very small, very light.

COX: I see.  Is it going to have a nice little Molycorp thing on it, or just —

SMITH: Absolutely, it’s going to have Molycorp on there.  [LAUGHTER]

COX: Right.

SMITH: Our dream, Clint, is to some day follow the Intel business marketing model where every computer you open says Intel inside.

COX: Molycorp inside.

SMITH: Yes.  And we’ll have to work on the copyright for that, I’m sure.  But, we would love to have a little sticker on there that says Molycorp inside.

COX: Right, right.  Switching gears a bit, who are your biggest competitors?

SMITH: Chinese.  But you can also say too that we have a 57 year history in this industry.  So we know the Chinese processors and producers, since their very beginning.  We have very good relationships with all of the Chinese producers and processors.  And we really enjoy exchanging technologies, where it’s appropriate.  One of the things that we have committed to the Chinese government as of late, and we’re going to make a stronger commitment to that in October, is helping the Chinese understand how to deal with environmental, health and safety issues.  That is something that the United States is pretty far along on with, and I think we can really help the Chinese get through that learning curve fast, and get them operating properly very quickly.

COX: How often do you go to China?

SMITH: I will be there three times this year.  I anticipate that it’s going to be a three or four time a year routine from now on.

COX: Have the Chinese ever come to Mountain Pass?

SMITH: Absolutely.  They’ve come to Mountain Pass and we have another group of visitors from China coming in October.

COX: When you get back to actually mining, how are you going to do that?  Are you just going to keep drilling down, or are you going to blow out the sides, how are you going to expand the operation?

SMITH: Great question.  The thirty year mine plan that we have approved by the State of California, and the Environmental Impact Report that was associated with it, suggests that at then end of the 30 year mine permit, the current pit, which is about 55 acres in disturbance at the surface, and roughly 400 feet deep, will become a surface pit that will be 110 acres in size, and I believe it will be somewhere in the neighborhood of 500 feet deep.

The ore body is a very, very well proven ore body.  It has served its purpose for 57 years.  We haven’t found the bottom of it yet.  Keep in mind too that the approved 30 year mine plan said that at the end of that 30 years we would have a 110 acre disturbance at the surface, but that was assuming 2000 tons per day of ore coming into the mill.  We’ll only be feeding 900 tons of ore into the mill every day to achieve our 20,000 tons of production a year so our surface disturbance will be far less than predicted.

COX: Is there any possibility of going beyond the 20,000 tons?

SMITH: Absolutely, there is.  Our current permits allow us to process up to 2000 tons of ore per day.  So if we’re only doing 900 tons per day, and producing 20,000, the math is pretty simple, it just ratios right up.  We can produce over 40,000 tons of product from that facility with existing permits.  We have taken a quick look at what the capital requirements would be for the larger production levels, and it is very surprisingly incremental.  Once you reach a certain point of volume, the incremental capital is surprisingly low to increase your production.

COX: Yep.  Will you be accepting any material from outside of Mountain Pass?

SMITH: We have talked about that internally.  And with the right arrangements tolling arrangements accepting other ores is a possibility.  However, you need to understand that you don’t just accept a new ore into your processing facilities, you have to run this through significant testing to demonstrate processability.  Assuming all that works out well, we are looking at the idea of making sure that our production facilities always have the potential to produce more rare earths than what we’re bringing in from our existing open pit.  So the answer is yes, but it’s a complicated yes.

COX: So is your end goal to take the company public, or will Molycorp remain private?

SMITH: Excellent question.  Again we have private equity investors who are always looking for exit strategies.  However, we really like our private equity investors because they are committed to an average seven year life on the things that they buy.  I think a very natural exit strategy for this company is going to be to go public.  There’s a lot of other options too, selling to other mining companies, consolidating with somebody else, having another group of private equity investors come in, simply financing what we need to do, and keeping the company private.  So we have a lot of options, but I think a very likely scenario is that we will go public.

COX: Is there  any timeframe on that?

SMITH: No specified time frame.  We certainly want to keep our options open at all times, but we also have to recognize what the IPO market looks like, and when the deal closed last September 30, 2008, until just recently, there really wasn’t any IPO market out there.

COX: Right.

SMITH: That is improving dramatically, and we’re certainly taking a hard look at it.

COX: Is the U.S. leadership aware of rare earths and their strategic importance?

SMITH: I want to say a resounding yes to that.  I’ve been going out to Washington, D.C., every other week for about nine months now.  I will readily admit that when I go into an office to talk to one of the members of Congress or the Senate, or the White House, or any of the agencies in the executive branch, there is very little knowledge to start with on rare earths.  However, they all have accepted the presentations that we provide with absolute open arms.

We’re starting to see a building of action now as a result of this newfound knowledge.  As an example, the Department of Defense has a strategic stockpile of materials, and rare earths are currently not in that stock pile at all.  I have reason to believe because of discussions that I’ve had with members of Congress and the Senate, and the Department of Defense, that there is a new view being developed on what the strategic stockpile is all about, and that it really needs to be viewed from a supply chain concept.   If they view it from a supply chain concept there is absolutely 100% certainty on my behalf that rare earths will be part of that strategic stockpile.

COX: So what are the biggest changes you see coming for the industry?

SMITH: You know Clint, there’s a lot of hype out there right now on rare earths, and it’s rather concerning to me because I think there’s going to be a lot of people out there that are going to have expectations that are not going to be met.  We’ve been in this industry for a long time, we know what it takes to permit a facility, we know what it takes to define a resource, we know what it takes to put feasibility studies together, and to actually build facilities.  We know what it takes to figure out how to put the processing steps together to actually pull these individual elements out, and believe me, that takes a significant period of time.

So when I hear junior exploration companies out there today who have just taken surface samples or put their first trench into a potential deposit; say that they will be producing rare earths in two years, I get very concerned because I think their shareholders who are buying in right now are going to be very disappointed in two years.  That’s what concerns me, if we build up a bunch of hype and we don’t produce what we say we’re going to produce, where does that really lead us?  The industry loses credibility.  I’ve  been on a personal mission as of late to ensure that we bring honesty and integrity to our industry, because without it, we’re not going to survive.

COX: I agree.  Who are the typical end users for Molycorp products?

SMITH: We have catalyst producers.  We have glass polishing companies.  We have medical companies.  Anybody that uses a permanent rare earth magnet is involved in our industry in one form or another.  We have literally sold to every rare earth user in the world from Mountain Pass.  We don’t necessarily have the intentions to do that once we restart, because we’re only going to be 20,000 tons of production in a 120,000 to 150,000 tonne market .  We will be a significant player, but we won’t be able to make promises to all customers, and the ones that we do make promises to, we want to keep, and we want to perform on.

COX: That old-fashioned, keep your promise thing.

SMITH: Absolutely.  We think it works, it’s historically worked very well, we’d like to stick to it.

COX: So besides the water treatment, and the arsenic removal, besides your own in-house applications, what are some of the more significant new applications that you see being developed or currently being developed in rare earths right now.

SMITH: What’s interesting is I don’t know that I see a whole lot of new rare earth products necessarily being developed.  We see the same ones being used, but see them being used in more applications.  You can really get specific by talking about  the magnet again.  The rare earth magnets, their growth has been double digit rates for seven or eight years now. It’s predicted to be double digit growth rates for the next ten years at least, and that’s because these powerful light weight magnets have been shown to perform exactly the way they were designed to perform.  They’ve allowed all of our cell phones to become as small as they are now.  They’ve allowed speakers to become two inch by two inch speakers that put out better sound than the old ones that were three feet tall, and a foot wide.  They are phenomenal.  They’re being used in electric bikes, hybrid cars, wind power turbines and literally by every electronic device.  Your computer has a hard disk drive with a permanent magnet in it.

I think we’re going to continue to see the use of these magnets grow because they are light weight and they are extremely powerful.  They clearly increase the efficiency of a lot of these systems.

COX: So many companies are looking for rare earths right now.  Are you satisfied with Mountain Pass or will you be looking for other rare earth properties as well?

SMITH: We are absolutely satisfied with Mountain Pass.  It has a long, long life to it, well in excess of a hundred years based on 20,000 tons of production a year.  But we also recognize that we are a mining and technology company, and when you’re in the mining or natural resource industry, it is always a good idea to make sure that you have additional resources to pursue, once that time comes.  So we don’t have to put a lot of effort into exploration right now, because Mountain Pass is so strong and so rich, and so big.  But we know that it’s in our best interest, and in our customers’ best interests to continually be looking for additional deposits.  And we have some activities ongoing right now.

COX: What would you say are some of the biggest misconceptions about rare earth mining?  It seems there are more misconceptions than conceptions!

SMITH: Yeah, [LAUGHTER] , I’m thinking of all of them, and being overwhelmed with the misconceptions.  I’m going to go right back to the misconception, we discussed earlier.  It’s really not so much a market misconception as it is a rare earth resource misconception.  Rare earths are not like copper or gold, or iron ore.  When you discover rare earths you only have part of the equation done.  You have to figure out how to process those rare earths.  It is a very, very complex chemical, and chemical engineering issue that has to be resolved.

I can’t even believe the number of people who are reporting rare earths in their exploration efforts everywhere in the world.  When you take a look at the data just at a very high level, most of those rare earth levels are being reported at significantly less than one percent.  We use a five percent cutoff for our ore grade to define it.  I would like to note that we are undertaking a 43-101 compliant resource study right now.  It should be done somewhere around the first of November.  We have asked our consultant to provide us advice on what should be used for the cutoff level, and I do believe that we will use a cutoff level below five percent.  Probably something in the range of two percent.  It doesn’t take a scientist to figure out that when you do that, your resource is going to grow.  And ours will grow significantly.

So the misconceptions to me are, this industry isn’t like other minerals.  There is a huge processing question mark on every single deposit that’s found out there.  There are going to be many deposits that are discovered that are not processable.

COX: I agree.  Have there been any particular people who have influenced your understanding of the rare earth in this market?

SMITH: Dudley Kingsnorth and Judith Chegwidden have been absolutely instrumental in my understanding of the market, the issues associated with rare earths, and the misconceptions with rare earths.  Those are two of the primary people, and then what’s really, really nice, Clint, is that when our group of private equity investors bought this facility, every single person that was an employee at that facility the day before the deal closed, was an employee the day after the deal closed.  And we are blessed with people that have 30 plus years of experience, and the people at our facility teach me more about rare earths every day.  There is a tremendous amount of history and institutional knowledge about the rare earth industry, and the markets, right at our facility.  Can I put another plug in for our guys?  As of today gone, we have gone 1,528 days without a lost time accident at our facility.  We are exceptionally proud of that, that’s well over four years.

COX: Excellent.  What’s been the biggest surprise you’ve experienced in the business so far?

SMITH: My biggest surprise, and I hate to keep emphasizing this over and over again, is the fluff that can be created in an industry  There’s generally no history by the people who are creating the fluff.  They have no experience in the industry, no processing experience at all.  How people take advantage of the moment has been devastating to my sense of integrity.  It really bothers me.

COX: Yes – I feel your pain.  Thank you Mark Smith for a fantastic interview.

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