Exclusive: Whyalla Steelworks bidder rejects ‘Gupta’ claims, revealing its takeover plans
In an exclusive interview with InDaily, one of the final two companies vying for the embattled Whyalla Steelworks unveils its unique plan to transform the ageing facility. It follows news of its chairman facing court action in India.
Amid concerns over court action raised around Jindal Steel International’s (JSI) billionaire chairman Naveen Jindal, the director of the company in the running to buy the Whyalla Steelworks is adamant in telling locals the billionaire owner was anything but “another Gupta”.
Answering questions from InDaily, JSI director Harssha Shetty claimed his company had the experience, the know-how and the plan to bring the vital piece of Australian steelmaking infrastructure out of the doldrums and into the modern world.
At its centre is a unique plan to bypass Whyalla’s shut down blast furnace while it transforms the facility, the director saying he scrutinised the facility firsthand during a visit to Whyalla at the end of June.
This would involve using the company’s existing Oman operations in the Middle East to produce ‘low-emissions blooms’ – semi-finished blocks of steel ready for the steel rolling mill – that would be shipped to Whyalla.
It would mean steel production could continue while the company tackled overhauling Whyalla’s ageing blast furnace that has been closed since April. (But this week looks to be restarting with the blast furnace now warming back up, according to a spokesperson for administrators KordaMentha.)
When Shetty toured the Whyalla Steelworks he said it gave him a firsthand look at parts of the operation that required “significant investment and modernisation, reinforcing our view that Whyalla needs a long-term transformation rather than short-term fixes”.
“Our commitment extends well beyond the plant itself. We want to protect jobs through the transition, invest in skills development through apprenticeships, traineeships and workforce development, support the development of local suppliers and businesses, and work in genuine partnership with the Barngarla community,” he said.
“This reflects how we operate elsewhere. At our operations in Oman, we have invested for the long term, modernised industrial facilities, created employment and worked closely with local communities. We believe successful steel businesses are built not only through investment in technology, but through enduring partnerships with the communities they serve.
“We are not looking at Whyalla as a short-term investment. We see it as a long-term commitment to Australian manufacturing, the Whyalla community and ensuring the steelworks continues to create opportunities for future generations and contributes to nation building.”
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JSI is a private company owned by chairman Naveen Jindal – dubbed the ‘Man of Steel’ in India.
Naveen is one of the country’s best-known industrialists. He oversees a US$25 billion group with businesses spanning steel, energy, mining and infrastructure across India, the Middle East, Africa and Europe. He is also a Member of the Indian Parliament.
The figurehead of the company heading up the Jindal Steel Group has business interest that are sprawling and complex. They are linked to two separate businesses: Jindal Steel Limited (a steel company with operations in India, Australia and Africa that is listed on the Indian stock exchange) and JSI (a separate, private company with worldwide steel operations). The latter is the firm behind the Whyalla bid.
Recently, reports emerged that Naveen was facing court action in India over historical accusations related to the allegedly corrupt allocation of coal mines in the country.
It led to Whyalla locals becoming concerned about the potential buyer, one resident saying on a Whyalla social media community group account “Great another Gupta”, while others added “Way to give the whole town PTSD” and “Here we go again”.
While Opposition Primary Industries and Regional Development Minister Nicola Centofanti said, “South Australians don’t want to see history repeat itself”.
Sanjeev Gupta was the former owner of the Whyalla Steelworks via his business GFG Alliance and after racking up tens of millions of dollars of debt owed to the SA Government and other creditors was forced into administration.
Asked by InDaily about the concerns, Shetty said “Jindal Steel Limited has always adhered to applicable laws and regulations, as will be outlined to the court. As these matters are subjudice it is not appropriate to comment further at this stage.”
“We understand why the Whyalla community wants confidence that the next owner has the capability and commitment to secure the steelworks’ future,” Shetty said.
“Given everything the community has experienced in recent years, those expectations are entirely understandable.”
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The director, also the CEO of Jindal Steel Oman – a USD$3 billion project for JSI – said the company’s proposal “should be judged on its merits and our ability to deliver”.
He pointed to the Oman project – acquired in 2010 – as evidence the company could deliver a distressed steelmaking asset in good shape.
“Jindal Steel International has built a strong track record of investing in and modernising major steel businesses,” Shetty said.
“Our investments in Oman and the Czech Republic demonstrate our ability to revive and transform industrial operations through long-term and sustained capital investments, deployment of globally benchmarked operational expertise guided by our unique ‘mine-to-metal’ philosophy.
The investments in Whyalla would be extensive, Shetty said, involving the development of new facilities including a 1.2 million tonne Direct Reduced Iron (DIR) plant, a one million tonne electric arc furnace, a new pellet plant and a new rolling mill.
Sheety said the investments would “significantly reduce the emissions intensity of steel production at Whyalla while creating a modern, internationally competitive steelmaking operation”.
However, he would not commit to any timelines or cost estimates for the redevelopment of Whyalla Steelworks.
InDaily understands any investment would have to at least match the more than $2 billion committed to the steelworks by the state and federal governments in 2025.
Korda Mentha has named Laitmore’s M Resources as one of two final short-listed bidders while BlueScope Steel is the wildcard third bidder for the plant. The listed Australian company has first right of refusal to any offer put forward for the steelworks, keeping them firmly in the game.
Asked whether BlueScope were given an “advantage” over JSI, Shetty said “we respect that the administrators have established a structured and rigorous sale process, and we have participated fully in that process”.
“We have been given the access we have needed to undertake our due diligence, including visiting the site and engaging with the management team,” he said.
“As for the arrangements with other parties, those are matters for the administrators. Our focus has been on developing the strongest possible proposal for the long-term future of Whyalla, drawing on Jindal Steel International’s financial capacity, operational expertise and integrated mine-to-metal business model.”
Shetty was not concerned about the Foreign Investment Review Board’s microscope being wpassed over JSI should the company be picked by administrators KordaMentha as the preferred buyer.
“We respect Australia’s foreign investment framework and will engage with the process in the normal course, just as we do in every market where we invest and operate. We are confident that our proposal reflects a genuine long-term commitment to Australia and delivers significant benefits for Whyalla, South Australia and Australia’s sovereign steelmaking capability,” he said.
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