Ann: Sovereign's Rutile to Significantly Reduce Carbon Footprint, page-8

Apologies, read last nights post, and I've gone from rant to dissertation, probably too long for most. I'll summarise because I'm passionate about the TiO2 industry dynamics and future pricing then leave alone (until the next worthy project update of course).

Everyone knows rutile is a high-TiO2, high purity, low carbon pigment feed... that's why it always sells for a large premium to other feed types on a TiO2 unit basis. A carbon tax will incrementally add 'some' higher price to rutile, which SVM bangs on about it every presentation after releasing similar CO2 lifecycle comps ages ago. Rehashing old news with new consultants using ESG wank word bingo is cynical preaching to the converted imo, but fair enough if that spins your wheels and ticks ESG investment boxes.

No problem shining a light on positives, rutile is a better quality low-carbon feed of course and I probably come across too aggressively negative. Carbon taxes will Incrementally higher rutile prices incentivise more rutile production which can only be a good thing. Problem is, rutile is a small fraction of the TiO2 pigment feed industry, which is price sensitive to feed costs (as consumers are price sensitive) and thus unrealistic to replace volume of Ti-Slag or syn-rutile with rutile at high costs to save small amounts of CO2.

Logic, economic rationalism and the carbon taxes reason for being says the price of Ti-Slag and syn-rutile will rise a little and/or margins will shrink a little with carbon taxes while Rutile keeps ticking over at a price premium. RBM slag has an outrageous profit margin so won't lose market share. With carbon taxes they will suffer reduced profit margins if they have to or raise prices if they can when market is under-supplied TiO2 feed (like current supply squeeze). Rutile price varies wildly over the years far beyond the likely effect of carbon tax differential. Everyone has an ESG plan and hard sells ESG upside when it's in their favour. Innovation and/or margin compression will mitigate most carbon tax imposts, supply-demand balance will still be responsible for product prices in a notoriously cyclical industry (ie make sure you are in the lower quartile of cots curve even after carbon tax effects)

RBM is probably the largest Ti-slag producer, so it's a justified comparison to make. It's true RIO at RBM uses coal generated electricity and coal reduction in the slagging process. The characterisation of T-Slag producing only CO2 and Waste is outrageously misleading because the 'waste' is actually valuable pig-iron that should take-up a large share of the CO2 emitted. If you want to understand the future of Ti-Slag production (the price maker and probable future for pigment feed) look up Eramet's Tyssedal Ti-Slag operation in Norway. Carbon free hydro-electricity and plans to replace coal with carbon-free hydrogen as the reductant in the slagging process. Why didn't Minviro compare their client's Malawi rutile CO2 delivered into the European market against Eramet Ti-Slag CO2... I think the answer is obvious.

Good luck all SVM investors, hope the project is developed (I think it will) and shareholders do well. My interest is geological and technically driven, enjoy the exercise and backing my opinion against consensus or company spin, which I do by nailing it clearly to the HC mast.