Ann: Major Project Upgrade, page-20

Geoffo, there may be some reason to believe that more work in China is likely to come to light in the months ahead.

There was some interesting movements in the PHK share price earlier this month: On Friday the 18th, and again on the following Monday, the PHK share price pushed over the 0.300 mark, and on high volume on both days.

I don't think it is coincidental that this jump in the share price of the company coincided with a major Chinese conference on environmental protection running over two days (from the 18th to the 19th of May), attended by a number of senior Chinese officials, including the Chinese President, Xi Jinping.

Xi Jinping gave a speech at this national conference, in which he vowed to fight a tough battle against pollution and push for an 'ecological civilisation', with the goal to build a 'Beautiful China' by 2035, according to an article from Xinhua.

Xi also stressed that China needed to accelerate the construction of an 'ecological civilisation system' and called for a comprehensive effort to promote green development.

Another Chinese report, with more detail on the speech, noted that air, water and soil pollution were the top three concerns of President Xi:

...The top priority is winning the battle against air pollution to return the blue sky to the people, Xi said, calling for concerted efforts to basically eliminate heavy pollution days.

Action plan for the prevention and control of water pollution must be advanced to ensure the safety of drinking water, and black and odorous water shall be rarely seen in cities.

Comprehensive efforts must be taken to implement the action plan concerning the prevention and control of soil pollution, while key regions and sectors and major pollutants shall be targeted and the restoration of polluted soil shall be intensified so that people can have peace of mind about the food they eat and the place they live in.

I've emphasised the words 'black and odorous water' in the paragraph on water pollution above: this term is a designation used in China for a category of polluted water.

The term is of significance for this company, as we know that PWS is supplying materials used to treat this 'black and odorous water' (for example, see page nine of the half-yearly presentation, 23/02/2018: ...PWS Materials used in treating 'Black Odorous Water' ), and it seems that the mobile plants mentioned in previous posts are also being employed to treat 'black and odorous' canals, rivers and lakes in China (as mentioned in page four of the same announcement).

My suspicion has been that PWS is playing an important, if niche, role in the efforts by the Chinese to tackle the problem of 'black and odorous' water pollution across China.

In summary, the significance of this Chinese environmental conference for Phoslock shareholders lies in the fact that Xi Jinping, the most powerful individual in China, has (more or less) given his blessing to the work that PWS is involved in China. We now know that the work being carried out by this company in that country is being endorsed by the highest level of the Chinese government.

Reading over those articles, you also get a sense that the Chinese President is unhappy about the slow progress that is being made in cleaning up the environmental problems in China, a feeling no doubt shared by most PHK shareholders. This might indicate that the pace of work might start picking up in the months ahead, as pressure from the top is likely to result in more environmental projects getting the green light.