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Chapter 1: What is the main topic discussed in this episode?
I'm Daniel James, and you're listening to 7AM. In 2017, billionaire businessman Sanjeev Gupta rescued the Wyala Steelworks from administration, becoming known as the saviour of steel. There was hope in this small South Australian town that steelmaking, and the thousands of jobs tied to it, would survive. But since then Gupta has lost control.
The South Australian government has forced the steelworks into administration and taxpayers are now underwriting the rescue to the tune of $2.4 billion. Now the sale of the steelworks is in its final stages, but the question of whether Wyola becomes the green steel town politicians promised, or whether public money is being used to keep an ageing steelworks alive, remains.
Today we revisit an episode with investigative journalist and former host of the ABC's Media Watch, Paul Barry, on the billionaire who brought Wyola to the brink and what it would really take to save the town. It's Sunday, June 21. This episode was first published in January 2025.
So, Paul, to start with, tell me a bit about Wayala and why the steelworks there are so important.
Chapter 2: What led to Sanjeev Gupta being called the savior of Whyalla?
So it's a town that has 22,000 people. It was going to be much bigger. It's kind of like Canberra. It's sort of laid out very spaciously, big wide boulevards, trees down the middle sometimes, lots of brick built public buildings and a very, very friendly town. I just got a beautiful welcome when I went there.
Wyala was started back in the 1940s as a shipyard and then in the 60s as a steelworks by BHP.
Industrial development in South Australia takes a big step forward with the opening of a huge 40 million pound steelworks in Wyala.
It's the only steelworks in Australia that makes, the only primary steelworks that makes what's called long steel. And that is girders, rails, the stuff that is used in the building industry. And if you didn't make it at Wyala, you'd basically have to import it.
From these automated smelters and rollers will come the vital steel to feed the hungry growth of Australia's building, car making and engineering industries.
Also, the steelworks is very important to the town. Although only about 1,100 people or 1,000 people now work there, there's something like 4,000 jobs in the town estimated to be dependent on it, and that's not far off half the workforce in Wyala. So if you got rid of the steelworks, if it went bust and wasn't rescued... Wyala's future would be very much in doubt.
I don't know what would happen to it.
And now the country's most important new steelmaking plant. And so what did people who you spoke to in Wyala say about their jobs to you? How fearful are they of the future of Wyala?
They're incredibly fearful.
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Chapter 3: How did the South Australian government intervene in the steelworks situation?
Wyala is old. It's like 60 years old at least. It's desperately in need of investment, desperately in need of maintenance. It went bust back in 2016 when Arium owned it, and it was then rescued after a year in administration. And the guy who bought it, Sanjeev Gupta, was sort of seen as a saviour, and it looked like all the problems were solved.
Uncertainty in terms of the future of this plant is now over. We have a lot of work to do together and a great future ahead, but we need to work together and make changes because this is not currently a sustainable world-class plant. It needs to become one.
Sanjeev Gupta is a British Indian businessman. He started off as a commodities trader. And about 10 years ago, he started up buying steelworks around the world. All these steelworks were losing money. They're all pretty desperate. They're all competing or struggling to compete against the Vietnamese and the Chinese and the Koreans who turned this stuff out in massive quantities much cheaper.
We were not just another company looking to make a quick buck out of a distressed opportunity. It's first and foremost a family business and I regard this as part of my family.
Essentially what this guy Sanjeev Gupta promised in Wayala was it would all be modernised, it would be expanded, they would use renewable energy, it would make green steel and there would be a magnificent future.
It's a wonderful feeling for our community. Everyone's feeling the same from business, workers, people there that are retired. Everybody's feeling this feeling of relief. And the more that we're hearing about Mr Gupta, we're hearing about Liberty, the better we're feeling. And so what has happened?
None of that stuff has happened. There hasn't been any investment. The coke ovens have packed up altogether. The blast furnace has been out of action for half a year. It's now back in action again, marginally. But people are getting more and more worried that it's going to go bust quite soon. I talked to a creditor, a guy called Jim Watson, who runs an engineering consulting business.
He relied almost entirely on Wyala for his business. And he built it up to a stage where he had 17 people. He persuaded a lot of people to come up, professional people to come up from Adelaide with their families. Had a half a million dollar contract coming into early 2024, all going fine. And suddenly the work dries up. There is no work. He has to lay people off. They go back to Adelaide.
He won't be able to get them back. He's now laid more people off. What happens to him if the steelworks goes down?
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Chapter 4: What challenges are facing the Whyalla steelworks today?
It's not a good outlook.
And so as people who rely on the steelworks have been dealing with this, what has Sanjeev Gupta been doing?
In the middle of the crisis last year, when all his creditors in Wyala are sort of jumping up and down and not being paid, Gupta is in Sydney buying a $12.5 million apartment on the waterfront from broadcaster John Laws. He's at the same time, just up the road from there, he's got a $34 million house that he's got plans to renovate at a cost of at least $10 million.
And so here's a guy who's bought up a whole bunch of ailing steelworks. promising in all of these places that he's going to transform them. And in each of these places, the story is the same. Basically, the steelworks is now on the brink of bankruptcy. Some of them actually have gone bankrupt. He's being chased by people who are trying to wind up all these companies.
has been rocked by revelations owner Sanjiv Gupta's overseas officers have been searched by serious fraud investigators. wanting more information in their investigations after the serious fraud officers in the UK He reportedly owes almost a billion dollars to administrators of his collapsed financier.
So it's an absolute hot mess. And as the crisis is hitting all these poor people who work at the plant or who are contractors to the plant or who have supplied stuff to the plant who aren't getting paid, he is out there spending like a drunken sailor. So Wyala is in a way one of the better ones. It's not quite so far down the tube as the ones in Europe are.
But what's happened in Europe gives you a very strong clue of what's going to happen here, which is that promises aren't kept. He keeps on paying the workers for a bit and then eventually it all falls apart and it all goes bust.
After the break, how to bring Wyala back from the brink. Paul, I suppose there is a bigger question that goes beyond the failures of management, and that is whether or not it is actually possible to make the Wyala Steelworks viable. Will it ever produce steel the way that it used to?
Absolutely. I mean, there is a question about can Australia produce steel competitively? Koreans, the Chinese, the Vietnamese, they invest much more money, have invested much more money. They produce on a much larger scale. We probably can't compete with them. But do you let your steelworks go bust and take a town down with it with 22,000 people?
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