Rinehart's $1.3bn gas play ⛽️

G’day.  

Welcome to Point Blank.

It’s iced coffee weather. Here are our daily takeaways to enjoy with your brew 👇

 💼 Practice Points

• The EU recently set a duty on modern slavery due diligence. It requires certain EU and non-EU companies to address and identify potential and actual harms to human rights and the environment in their supply, production, and distribution chains. Companies will also be liable for damages if they fail to fulfil these due diligence commitments. If the EU’s changes are anything to go by, Australia may follow suit to ramp up its current lacklustre modern slavery regime.

• A quick reminder from ASIC: mandatory climate reporting kicks in on January 1st. Check out ASIC’s sustainability reporting page, which outlines how they plan to administer the reporting, which includes an annual climate-related disclosures surveillance program and using their new powers to direct companies to substantiate, clarify, or correct any climate statements that ASIC thinks are incorrect or misleading.

• Speaking of climate reporting, here’s a Greenwashing recap courtesy of Santos: As we know, Santos is in hot water as the ACCR takes it to court, accusing the gas giant of faking a "credible" climate plan. The activist group argues that Santos' 2040 net-zero goal is all talk, lacking solid modelling and substance: "It was little more than a series of speculations ... cobbled together in a matter of weeks”, says the activists’ barrister Hutley SC. But Santos has pushed back, claiming it's serious about emissions cuts, thanks to its Moomba carbon capture project, which has just begun injecting CO₂ underground. Santos’ barrister Young KC caveated that: "They are all targets, they're not promises or predictions to achieve those outcomes." This case marks a global first to legally challenging a company’s net-zero target, and it’s heating up fast.

 📢 Talking Points

• Since 2019, Microsoft has given OpenAI over US$13bn in cash and computer power. In return, it gained exclusive rights to run OpenAI’s LLMs on Azure (Microsoft’s flagship cloud computing platform). The partnership has strengthened both companies. OpenAI has built bigger and better LLMs and Microsoft’s Azure has chipped away at Amazon’s AWS cloud computing lead. Now OpenAI shareholders are urging Microsoft set Britney OpenAI free. They believe this move will boost growth and revenue as the AI leader shifts from a non-profit to a profit-driven model. Now valued at US$157bn after the last funding round, OpenAI’s financials are putting the partnership at risk.

• The space race is back on. A Chinese spacecraft just docked at the Tiangong space station, prepping for its mission to put someone on the Moon by 2030. Meanwhile, in Washington, NASA's chief is sounding the alarm, worried that Beijing's got its sights set on staking territorial claims up there.

• Adidas has settled its feud with Kanye West over his antisemitic comments that ended their powerhouse Yeezy partnership. With no money changing hands and the drama declared "history," the brand will donate proceeds from the remaining €1.2b (A$2b) in Yeezy stock to anti-discrimination efforts.

• Some users on X are raking in thousands by spreading election misinformation and conspiracy theories while the platform turns a blind eye. The BBC identified dozens of accounts that re-share each other's content many times a day, including true, false and faked material, to boost their reach and revenue.

 🏦 The Treasury

• Cozzie liv subsides as inflation sinks to 2.8%, the lowest in more than 3.5 years.

 🤝 Deal Room

• Fintech’s Airwallex is in talks to raise $200m in a new funding round to pioneer growth, targetting a hefty $6bn valuation.

• Could Wesfarmers be MinRes’ knight in shining armour? While a Wesfarmers buyout of MinRes is a long shot, there’s chatter about Wesfarmers picking up MinRes’ top assets while MinRes remains under pressure from Ellison’s scandal. With the miner’s net debt at $4.4b as it ramps up its Onslow iron ore project, a fast and loose asset sale may be its only hope to avoid an equity raising. Will Wesfarmers follow Rio’s lead and target MinRes’ lithium division? Only time will tell. MinRes’ board expects to conclude its saga within the week.

• Hold up, it’s Gina Rinehart to the rescue. The Hancock Prospecting empire has inked a $1.1bn deal with the embattled MinRes for its Lockyer gas project. Gina will spend $804m to obtain exploration permits for the Lockyer and North Erregulla assets subject to ministerial approvals. When resource thresholds are met, she will cash up the rest.

• Vault Minerals—the result of a merger between Red 5 and Silverlake—is expected to swoop on Genesis Minerals, another Leonora gold miner, although most expect Genesis to hold off on M&A until it stabilises its earlier deal with St Barbara.

• Scott Murray, a former CEO of several publicly traded US companies, is behind bars after orchestrating a fake US$4b (A$6b) takeover bid for Getty Images Holdings. After buying 300k Getty shares and losing money, his company Trillion—with only $20 on hand—launched a bogus bid that quickly inflated Getty’s stock price, enabling Murray to sell his shares within two hours.

🏗 Sector Specific

Diggers

• BHP has awkwardly backpedalled on claims it had "moved on" from its Anglo American bid attempt, fearing UK takeover panel restrictions. At Wednesday's AGM, Chairman Ken Mackenzie's remarks caused a 4.5% drop in Anglo shares – ouch. The mining giant's retreat highlights the delicate dance of corporate communication in high-stakes acquisitions.

• Pilbara Minerals CEO admitted he's surprised more lithium companies haven't gone under in this market slump, as Pilbara pauses operations at its Ngungaju plant, leading to 50 job cuts.

Fin

• Australian banks may face a reckoning as earning season fast approaches. Lower interest rates and increased competition are expected to shadow earnings outlook. A cautioned financial forecast may halt the Fin sector’s ASX rally, even bringing the pricey shares down by a few percentage points. Westpac, NAB and ANZ are due to report full-year results next week.

• ASIC isn't happy with ASX's repeated delays in replacing ASX's 30-year-old CHESS system. It's regulator v regulator, with ASIC saying it will pursue regulatory action to ensure the CHESS replacement project meets stakeholder and community expectations.

Tech

• Afterpay co-founder Anthony Eisen, who started the company a decade ago, is stepping down from Block (which bought Afterpay for $39m in 2021) to embrace philanthropic pursuits.

• Alphabet’s earnings exceeded expectations, driven by a surge in digital advertising and cloud services, resulting in a 4% jump in shares. But, concerns are rising over a DOJ lawsuit claiming Google has monopolistic practices and unanswered questions from the Alphabet CEO about how Google plans to tackle the threats of genAI.

Retail

• Did someone say corporate espionage? Qantas sues a former Qantas pilot after he allegedly downloaded thousands of megabytes of sensitive docs before jumping to Virgin.

🏘️ Word on the Street 

• After two decades, US firm WilmerHale is shutting its Beijing office, joining the ranks of firms like Skadden and Reed Smith that are bailing on China as economic and geopolitical tensions rise.

• National law firm McCabes adds principal Kim Waygood for Brisbane-based insurance team. Kim specialises in pretty much everything insurance, previously working at Ashurst and then at HBA Legal.