British billionaire Sanjeev Gupta was dubbed the ‘saviour of steel’ when he swooped in to buy the struggling Whyalla steelworks.
Now his vision has proved a pipe dream and the South Australian government has forced the plant into administration in a bid to recover the millions of dollars it is owed.
Gupta has left behind a trail of debts, angry workers and disillusioned politicians.
But he once seemed a godsend for the state’s Labor government, which hoped to keep the steelworks running while also reducing its emissions.
In 2017 Gupta took over the key South Australia plant – the country’s only producer of steel beams for construction and rails – after the previous owner went into administration.
He promised to invest up to $1.5billion in the plant and make it carbon neutral by producing ‘green’ steel – a model he was also trying to introduce at his other steel operations around the world.
The transformation at Whyalla would involve replacing coal with hydrogen in the manufacturing process, and was set to cost hundreds of millions of dollars.
Mr Gupta initially lived near the plant in Whyalla, northwest of Adelaide, and called the city of 22,000 people his ‘spiritual home’.
Sanjeev Gupta was dubbed the ‘saviour of steel’ when he swooped in to buy the struggling Whyalla steelworks in 2017
In 2017 Mr Gupta took over the key South Australia plant – the country’s only producer of steel beams for construction and rails
Mr Gupta bought the Potts Point mansion ‘Bomera’ for $34 million in 2019
But he soon decamped to Sydney, where he rented a home in Bellevue Hill in the eastern suburbs for $30,000 a week, before buying Potts Point mansion, ‘Bomera,’ for $34million.
Mr Gupta held lavish parties at the luxury abode but there were hints all was not well.
In August 2024, around the same time that Whyalla’s debts started going unpaid – and the blast furnace was malfunctioning – he bought a waterfront Finger Wharf apartment in Woolloomooloo for $10million, and budgeted another $10million to renovate his Potts Point mansion.
He kept up appearances, insisting at Davos last month that a resolution was just around the corner.
The South Australian government, owed millions in unpaid royalties from GFG subsidiary OneSteel Manufacturing, eventually lost patience.
On Wednesday it voted to place OneSteel into a forced administration.
South Australia’s Infrastructure Minister Tom Koutsantonis introduced the Bill. Ironically, it was Mr Koutsantonis who welcomed Mr Gupta in 2017 when he was the state’s treasurer.
Administrator KordaMentha is now expected to stabilise operations and possibly sell the plant to a new owner.
In 2024 he bought a waterfront Finger Wharf apartment in Woolloomooloo for $10million
‘GFG has reaped significant profits from their facilities here – but despite long-made promises, it has failed to invest back into the steelworks,’ Mr Koutsantonis said on Wednesday.
Despite billions of dollars in steel sales from Whyalla, since 2017 GFG had sent almost $800million offshore, he said.
‘This is not a Whyalla problem – it is a GFG problem. And now GFG finds itself in a position where its creditors are not being paid.’
South Australian Premier Peter Malinauskas said he had received advice ‘that the steelworks is being run into ground to the extent that it may become irredeemable’.
‘Importantly, it’s not just the steelworks itself – it’s a vast number of local suppliers, small businesses owned and operated by South Australians, whose debts remain unpaid, whose revenue has evaporated, and whose livelihoods are at stake,’ he said.
Mr Malinauskas, Prime Minister Anthony Albanese, and Minister for Industry and Science Ed Husic announced a joint support package worth $2.4billion for the plant on Thursday.
‘The Whyalla steelworks employs 1,100 workers and supports more than 2,000 indirectly,’ Mr Husic said.
‘Whyalla is critical to sovereign Australian steel. It’s one of only two Australian steelworks, produces 75 per cent of Australian structural steel and is the only domestic producer of long steel products.
‘Steel from Whyalla helps Australia build and maintain its infrastructure – including railways, bridges, schools, hospitals, high-rise towers, transmission infrastructure and defence assets.’
Mr Gupta said the South Australian Government was on the ‘wrong course’ in forcing him out and he was seeking legal advice, according to a company memo seen by The Australian Financial Review.
