Sanjeev Gupta says he can return the Whyalla steelworks to profit and deliver on his promises

Sanjeev Gupta says despite a “crisis” in the steel industry which has helped push the Whyalla steelworks into the red, he can deliver a bright future for the industrial city.

GFG Alliance executive chairman Sanjeev Gupta.

Embattled industrialist Sanjeev Gupta says despite his doubters, and a “global crisis” in the steel industry, he can deliver on his promise to the city of Whyalla, while revealing the steelworks has fallen to a loss-making position once again.

In a column supplied to News Corp Australia, Mr Gupta says he remains committed to the transformation of the Whyalla steelworks and iron ore operations, which he bought out of administration in 2017.

Since that time, the steelworks has lost $1.312bn he says, and his company GFG Alliance has spent $298m on capital expenditure and upgrades to the steel plant and rolling mill.

Mr Gupta has come under increasing pressure recently, with suppliers in the steel town complaining, anonymously, of late payments, and the company itself laying off initially about 50 white collar workers, then last week starting the process of shedding about 100 jobs in the mining division.

There have also been rumours that safety has been compromised by a lack of maintenance work - a claim Mr Gupta says is untrue.

He has also come under fire for recently shelling out $12.5m to buy a waterfront apartment on Sydney Harbour, to add to his $34m Potts Point mansion Bomera, while suppliers are rumoured to be receiving payments late.

Mr Gupta’s waterfront mansion Bomera. at Pott Point.

Mr Gupta reveals in the column that the steelworks, which returned to profitability under the ownership of GFG, is once again losing money.

However Mr Gupta said he remains as committed as ever to the long-term future of the operation, which he has previously committed to upgrading with a new electric arc furnace and direct reduction iron plant.

“I believe as wholeheartedly in the future of Whyalla as I did when I first walked into the steelworks in 2017,’’ Mr Gupta says in his column.

“I am a steelmaker, it is my passion, and my outlook has never been short term.

“Where others see problems, I see the multi-generational opportunities that Whyalla offers for the future of green iron and steel, a mega trend that will boost demand and shape our industry for centuries to come.’’

Sanjeev Gupta says Whyalla is his top priority.

At the moment though, the steelworks is struggling, he says.

“When we began this journey in 2017, Whyalla was losing a million dollars a day.

“Through strategic investments, some favourable market conditions, and an enormous effort from an expert team sourced from around the GFG network, three years ago we turned the business from red to black - a truly remarkable achievement of which we are very proud.

“Unfortunately the pendulum has now swung back, and we face a global crisis worse than 2008 and 2015.

“Steel producers everywhere are facing enormous losses, caused by China dumping ever increasing quantities of steel on the international market. This is driven by China’s own demand shrinking due to a sharp decline in population.’’

Problems with the company’s blast furnace, which was shut down for a number of months this year for repairs, have compounded the company’s problems.

Mr Gupta says while this steelworks are ageing, they still have many years left in them.

“With the right approach, including pinpoint focus on technical support and key upgrades, while cutting expired areas like the coke ovens and other costs, we will return to profit,’’ he says.

“I want to assure you that with the right care the steelworks can run safely for years, which will give us ample time to complete our green steel transition.

“I also want to underline that as we seek to defend our bottom line, we will never compromise safety.

“Again, contrary to rumour, we have dramatically improved safety at Whyalla, most recently setting a record for consecutive months without a lost time injury.

“Steel, like other commodities, is cyclical - it will rebound. In the meantime, no crisis should be wasted.

“We will use this difficult time to shape a stronger and more efficient plant that will last for years to come.

“I commit to overseeing this personally - Whyalla remains my highest priority.

“Despite the doubters, I can and will deliver the future that the great town of Whyalla and the great state of South Australia deserves.’’

Mr Gupta has come under fire recently from Whyalla MP Eddie Hughes, who has been venting his frustration on social media about issues such as Mr Gupta’s real estate purchases and worker lay-offs.

Mr Gupta’s credibility has come into question given the billions of dollars of promises he made after buying the steelworks, none of which - outside of the steelworks maintenance itself - have come to fruition.

These promises included enormous renewable energy projects, a potential new copper smelter and plans to build vehicles in South Australia.

Mr Gupta’s global business came to the brink of collapse when his financier Greensill Capital collapsed, bringing to light GFG’s complex financing arrangements and large degree of indebtedness.

Major renewables projects were once part of the vision for the future of Whyalla.

Originally published as Sanjeev Gupta says he can return the Whyalla steelworks to profit and deliver on his promises