Business News - WA
At Close of Business podcast September 30 2024
(upbeat music) All the latest business news from WA deliver daily. At close of business, news briefing. - Good afternoon and welcome to the At Close of Business podcast. I'm Nadia Boodihaju and I'll be reading your Monday headlines. Strike Energy Chair John Pointen has committed to restoring value in the company's stock. After an abrupt sell down, triggered by exploration disappointment earlier this year. Strike shares are down 54% from the start of the year, having halved in February when the Perth Basin gas producer revealed non-commercial gas flows at two wells within its south irregular project. The company started that month with a market capitalization above $1.2 billion, enough to see it admitted to the ASX 200 index at the start of February. By the end of the month, its share price had fallen from $0.42 to $0.22, where it currently hovers giving strike a market capitalization of $616 million. Mr. Pointen set the sell off, which saw strike removed from this ASX 200 in its September rebalance had been brutal. He says strikes, board and executives take full responsibility for the significant setback and are fully committed to restoring the lost value to the company. In other news, reward minerals has struck a deal to acquire potash plant and minor infrastructure from the collapse minor Calium lakes, after failing to acquire the whole beyondy project earlier this year. ASX listed reward will pay $2.1 million for the nearby beyondy potash plant and minor infrastructure from its executive director and major shareholder Michael Ruan, who bought the assets through an auction after Calium collapse. It comes after reward lobbed an almost $20 million offer to pluck the beyondy project out of receivership and administration, but failed to drum up the funds needed for the acquisition. If approved, the deal would be funded through a loan facility from Mr. Ruan, who has already lent $6.73 million to reward minerals. And in property, the last parcel of waterfront land in the Exmouth Marina will be sold to a consortium of Fowler Group and Celsius Property Group for the development of 150 new residential lots. Development WA inked the deal to sell the almost 18 hectares of state-owned land to the consortium, which has previously delivered a housing project in Exmouth. Dub super lot D, the waterfront site will be turned into a mix of housing, both affordable and larger dwellings with commercial sites and public open spaces. The consortium will fast track 10 new houses specifically for local council and service workers in the gas coin town, which has long grappled with accommodation and housing shortages. Construction is tipped to start in mid 2025, subject to approvals. It marks the last of the Exmouth Marina lots to be sold, the Marina being half full with about 200 homes built since the blocks first hit the market in 2006. That's all the headlines from me. For the full stories and more news from today, visit businessnews.com.au and coming up next on the podcast, I speak to Mark Pannell about Salubris, a business that delivers carbon credits through land management instead of tree planting. - Ears, they're everywhere and getting in them is a pretty good way to promote your business. At Creative Fix, we won't just get your business into the ears of customers. We make it stick in their minds. Podcasting, music streaming, radio, we create personalized audio advertising. With over 94% of Australians tuning into audio each week, it's time to get your brand heard. Creative Fix, we give brands a sound. Search Creative Fix online. (upbeat music) - Welcome back to our Closer Business. I'm not everybody hydro and today I'm joined by Mark Pannell who looked into Salubris, a carbon credit business aiming to help indigenous groups in the recent edition of the Business News magazine. So Mark, what prompted you to write about this? - Oh, I was aware that there was this business called Carbonaut that had been set up as a sort of an offshoot by the Broker Ridge and investment bank Argonaut and kind of was waiting for them to launch whatever. We'd mentioned it a few times. Anyway, they finally did launch it but they changed the name to Salubris and gone a completely different route, I think from what they had planned 'cause they'd planned an IPO and they'd abandoned that plan decided it wasn't gonna work as too complex, I think. So I was keen to kind of then, I think if there'd been an IPO that had been a lot of coverage around it and we would have all had a good chance to understand what it was, but without the IPO there wasn't that moment. So I thought it was kind of interested in what are they actually doing. And so that prompted this. - So what are they actually doing to lead on to that question? - Yeah, well look, they've got some sort of traditional, if we can call it that, carbon credit kind of projects and then they're going into some kind of new realm stuff. So perhaps just to mention what they do sort of that's more normal is they already own a pastoral station which they've largely de-stocked and they just keep a little bit of stock on the station to manage weeds, so there's not, yeah, it's basically weeds. And then, so that's kind of like a model now that's out there where people acquire a pastoral station, usually one at the fringe and they're not usually that profitable, de-stock them. And then so then the original or the native flora gets to grow properly and that is a formal carbon sequestration, right? And you do that by having some stock on there, managing feral animals and managing weeds and the stock is used to manage the weeds to a degree, right? So that's pretty normal. That's what they've got. They're already earning some money from that. But what they're doing that's different is they're doing some, they've done a deal with a native title group out of Kargouli and they're trying to use traditional fire management techniques to try to manage carbon sequestration. And I assume they would try to do some of that on the land they lease as a past release, but they're also trying to extend that to crown land where as a group they'll pay for the indigenous people to soft burn rather than hot burn. You know, hot burns when things get out of control, which we want to soft burn in a traditional manner to suppress fire because obviously fire when the flora, when the trees burn, especially in a hot fire, you get CO2 and therefore there's no carbon sequestration, right? So you're trying to do the reverse of that. And I guess the long and the short of it is they are trying to, well, the way I saw it and I think this is the my interpretation, this is actually a way of paying indigenous people to do something traditional, which we haven't really seen that on the land much. So if they could manage the land better and get paid for it, you kind of get a nice synergy, I think, is where Salubris is heading. - Yeah, that's interesting. You also spoke to Brendan Grills for the story, who leads Salubris. What did he have to say about the creation and the nature of the business? - Yeah, so it was interesting that Brendan Grills got involved, you know, he's got a background. Obviously he was the national WA leader. He was the one who did a deal with Colin Barnett and had the royalties for regions. And he's done a lot around, you know, working for indigenous people and trying to get them on a better financial footing. So I think this fits in with his background politics, but it's obviously a commercial enterprise. I mean, they're trying to raise money for the thing. They're gonna think they're trying to raise about $30 million for it to buy more land. So that's what's coming up. And he, you know, is, I think he's pretty passionate about this. And so he sees this as a way of, yeah, like making money, but also dealing the indigenous people into it. So that they're not just getting paid. They actually will be, you know, partners in the business, so to speak. - And did he talk about what's next for Salubris? - Yeah, so as I mentioned, they're trying to raise about 30 million. I think they've spent about 10 to date. So this is the next raising. And then they're gonna buy, I think they've got about 200,000 hectares of pastoral land at the moment. And from recollection, I think they're gonna acquire about another million or bit more hectares of land so that they can then continue with the traditional formats that they're doing, but also potentially use this new format and learn the methodology. And so that becomes the IP of the company where they have a methodology. I think I should mention that this already exists in WA in the North. They call it savanna, forgive me, but it's savanna techniques or whatever. And you can actually earn carbon credits for managing the land with fire. But what you do in the North is very different than what you're doing in the South. And they have not yet got the techniques documented or the sciences to how effective it is. So that's what they wanna do. So it's pretty, it's quite an interesting. - A really innovative project. - A really nice explainer mark into Slubris and the business model. Listeners can read Mark's story online at businessnews.com.au or pick up the September 16th edition of the Business News magazine. Thank you for listening and thank you Mark for joining me. - Thanks Nadia. - The latest business news, deliver daily. Subscribe and rate the show. Where have you listened to your podcast? For all the latest business news, visit businessnews.com.au. (upbeat music) [BLANK_AUDIO]