I am trying to have materia removed from a piece of gear. I am standing at the goblin (Mutamix) above Black Brush Station. I have searched the web and forums and they all point to that NPC to remove materia. He will not. He says the same lines every time I talk to him. I get no options for small talk or anything else. He just says "Airyself lives in object....." It doesn't matter if gear is on, in chest, or in inventory. I have completed the storyline. I have the materia assimilation ability.

Can anyone offer a solution? I hope I'm just doing or overlooking something very stupid.