Lakshmi Mittal: King of steel

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Speaker 3 It's 1975. A 25-year-old man rides in the back of a tuk-tuk down a busy street in Indonesia.
He's on his first trip abroad, but his task isn't that exciting.

Speaker 3 He's there to sell off some land from his family's steel business.

Speaker 3 He knows he's here to carry out his dad's plans, but the more he starts to learn about the country and its steel markets, the more his mind starts buzzing.

Speaker 3 He takes out a pen and starts totting up numbers and sketching out a plan. Could he go against his father?

Speaker 3 He gestures to his driver to pull over at a hotel and runs inside and asks to use their phone. And this one decision will not only change his life, but an entire industry.

Speaker 1 Welcome to Good Bad Billionaire from the BBC World Service. Each episode we pick a billionaire and find out how they made their money.

Speaker 3 We take them from zero to their first million, then from a million onto a billion.

Speaker 1 I'm Simon Jack, I'm the BBC's business editor.

Speaker 3 And I'm Singh Singh, and I'm a journalist, author, and podcaster.

Speaker 1 That man was Lakshmi Mittal. He's been called the king of steel and with good reason.

Speaker 3 Yes, he didn't just build a business, he reshaped the entire steel industry.

Speaker 1 He consolidated struggling mills across lots of continents. He built the world's largest steel company, Arcelor Mittal, and turned steel into a truly global business.

Speaker 3 At his peak in 2008 he was worth $45 billion

Speaker 3 and he was the richest man in Europe.

Speaker 1 And while he's known for his humble pastimes of yoga and swimming, when he does spend, he goes all out. That's right.

Speaker 3 He bought what was then at the time Britain's most expensive home for £117 million.

Speaker 1 And his daughter's wedding, with a performance from Kylie Minogue, no less, reportedly cost £55 million.

Speaker 3 That's more than the cost of William Prince of Wales or Jeff bezos and other our billionaires weddings at the time of recording he's an indian citizen who lives in london but his private jet often clocks over a thousand flying hours a year that is a lot because for mittao the world is still his factory floor so let's go back to the beginning to understand a man who forged an empire one steel beam at a time

Speaker 3 Lakshmi Noah's Mittau was born on June 15th, 1950, in a small desert town in Rajasthan, northern India.

Speaker 3 Now he was named after the Hindu goddess of wealth and he's the eldest of five children and he spent those early years in a modest house shared by 20 family members. That is quite a lot of family.

Speaker 3 At the time, his hometown in Rajasthan lacked running water, it didn't have steady electricity. This was a reality for parts of rural India at the time.

Speaker 3 And his son Aditya once joked that Lakshmi even rode a camel to school, revealing just how remote his hometown really was.

Speaker 1 The Mittal family belonged to the Marwari community, a traditionally business-minded group of people known for their entrepreneurial spirit.

Speaker 1 His granddad worked as a commodities broker, and his father, Mohan Lal Mittal, began in oil trading in the 1940s before running a steel mill in the 1950s.

Speaker 1 His father, like many Marwari men, worked in Kolkata, while Lakshmi, his mother, and siblings, stayed behind in Rajasthan.

Speaker 3 When Mitto was around six, the family reunited in a first-floor apartment in a poor suburb of Kolkata. Mittal remembers being woken up at 5 a.m.

Speaker 3 when the city's trams began and rattled past his window. He is having to wade through water to get to school when the streets flooded.

Speaker 1 insight. He apparently scratched on the back of his school ruler Dr.
Neoas Mittal BCOM MBA MBA, PhD. So he had big ambitions for his academic future.

Speaker 3 I do not think I could have told you what a BCOM MBA or PhD was when I was that age.

Speaker 1 PhD, maybe, not the other two for sure.

Speaker 3 No. Well, as a schoolboy, Mittal would head to the steel mill his dad managed after class.
He helped out in the post room. He'd soak up everything he could about how the place worked.

Speaker 3 And in 1963, when he was just 13, his father and uncle secured a government license to build their own steel rolling mill a thousand kilometers away in Andhra Pradesh.

Speaker 3 They called the company ISPAT, ISPAT, which means steel in Hindi.

Speaker 3 And with the new mill so far away from home, Mittal would visit only during the school holidays where he gradually learned the business.

Speaker 1 Age 16, Mittal wanted to attend St Xavier's College, a prestigious school in Kolkata, with successful alumni like Mukesh Ambani, another billionaire we've covered on this podcast.

Speaker 1 And although Mittal had some pretty good grades, he struggled with English and the school refused to admit him.

Speaker 1 But determined, and this is the kind of thing we've come across before in these billionaires, Mittel promised to learn English in a year and turned up at the principal's office every day until they gave him a chance by the end of that year he got a distinction in his English exam and he graduated in 1970 aged just 19 with a Bachelor of Commerce B comm

Speaker 3 and with reportedly the highest marks the college had seen so he's already well on that way to getting all the distinctions he wanted on that ruler and when Mittel went to collect his degree the principal offered him a job teaching accountancy the very next day but Mittel wasn't a fan of early mornings and the job started at 6am.

Speaker 3 So he declined and instead joined the family steel business.

Speaker 3 There's a whole other universe in which Lakshmi Mittal, who didn't mind early mornings, is teaching accountancy at St Xavier's College right now.

Speaker 1 I'm probably not featuring on this program. By the early 1970s, the Mittal family steel business was expanding rapidly as the demand for steel was increasing.

Speaker 1 This was to serve the Indian government's target for GDP, the economic growth of 5% per year.

Speaker 1 Now, the family had moved into a large house, affectionately called Mittal House, in Alipur, one of Kolkata's most exclusive neighbourhoods.

Speaker 1 And I think that GDP thing is really interesting here, because, like lots of our billionaires, some of them have been kind of in the right place at the right time.

Speaker 1 We're beginning to see the real emergence of India as an economic superpower, which one day will probably overtake China, if not the US.

Speaker 3 When he was 21 years old, Lakshmi Mittal walked into the Calcutta Club, a colonial era private members' club for Kolkata's elite.

Speaker 3 His parents had arranged his marriage, and he was there to meet his future wife, Usha Daumir, for the first time.

Speaker 3 Usha was an economics student, and her father, who worked in paper manufacturing and engineering, sat beside her. Afterward, Lakshmin joked to his family, he's a very smart guy.

Speaker 3 Even if Usha is only a fifth as intelligent, I'll marry her.

Speaker 3 I mean, Usha said Lakshmi made her laugh, and you know, it is a very funny quip. So the couple were engaged weeks later, and they married that same year.

Speaker 1 In 1975, Lakshmi Mittal's father sent him to East Java in Indonesia to sell some rice paddies they'd bought, intending to build a steel mill there.

Speaker 1 But the project had been plagued by bureaucratic hurdles, so his father wanted Lakshmi to just cut their losses and sell up.

Speaker 1 So Mitao planned to complete the sale on his way to his first foreign trip, a holiday to Japan with some friends. This is where we found him at the beginning of this episode.

Speaker 3 When Mitao arrived in Indonesia, he saw that steel was selling locally at strong prices, so he wondered if the stalled project could still be salvaged.

Speaker 3 He told the Financial Times, the country was an oil-based economy and had a good opportunity for growth. I was enthused by the possibilities.

Speaker 3 To ensure a solid profit margin, Mattel decided to build a mini-mill instead of a traditional steel plant.

Speaker 1 Now, this may be a good moment to have a little dive into the steel-making process, which will be helpful for this episode.

Speaker 1 Now, traditionally, steel is made in what they call blast furnaces, giant, expensive structures that combine iron ore and coke, which is a kind of...

Speaker 1 high-energy coal, and they burn them at extremely high temperatures to produce molten iron. Now, that liquid is then refined into steel using oxygen supply.

Speaker 1 But building this kind of setup takes years, it costs billions of dollars. I've been to a few of these things, they are massive concerns.

Speaker 1 And once they're up and running, the furnace, you can't really put them out. They'll burn them for years, decades, even.
And if you let them cool down, it's very hard to start them again.

Speaker 1 So, they are huge machines of industry.

Speaker 3 Well, a mini-mill works differently. So, it uses what's called an electric arc furnace, and this melts scrap steel or direct reduced iron, which is known as DRI.

Speaker 3 That is iron ore processed with natural gas to remove oxygen. None of this needs coke.

Speaker 3 Mini mills are therefore faster and cheaper to build than traditional plants and they're much easier to scale up or down depending on market demand. So they're much more flexible to operate.

Speaker 3 Mittow estimated that a mini mill like the one he wanted to build could cut production costs by as much as 50% compared to those conventional blast furnace operations that we were just talking about.

Speaker 3 So big brainwave, he cancelled his Japan holiday. He called his dad to tell him he was going to stay in Indonesia and he was going to build this steel mill.

Speaker 3 Now, at this point in time, he is literally just 25 years old. That is really young to be managing what is essentially a huge construction project.

Speaker 1 And also, this is quite a pioneering process, this mini mill, this electric arc furnace. It's happening as we speak right now in some places in the UK.

Speaker 1 where they're transitioning from these blast furnaces to these electric arc furnaces. So he's miles ahead of the game in in pioneering this technology.

Speaker 1 And one of the other things about these mini furnaces, they use a fraction of the energy that a big blast furnace uses.

Speaker 1 And that's why they're becoming popular, to bring down the energy bills, which are astronomical for steelmaking.

Speaker 3 So this steel mill outside of India was working for both father and son, right?

Speaker 1 Yeah, exactly. In India, government regulations limited how much a private steel mill could produce.
ISPAT only produced about 20,000 tonnes of steel a year.

Speaker 1 A US steel mill will produce that in a week. So the Indonesian plant would allow the family business to scale up production without those limits that were imposed in India.

Speaker 3 And, you know, Lakshmi had done this six-year apprenticeship. He wanted to strike out on his own.
I mean, albeit this was as an outpost of his family's business, which is where he learnt the ropes.

Speaker 3 He told the Wall Street Journal, I always believed in doing something unique and I felt the opportunities for me in India were limited. That's really interesting.

Speaker 3 So he felt he had to get out of the shadow of his father's company in order to succeed.

Speaker 1 Which is quite common, you know, give me something to do, something with a bit of independence. You go and run Indonesia, fine.
And it's like, great, I've got my own project. Right.

Speaker 1 To fund this new Indonesian mill, ISPAT invested $2 million in equity, that's their own cash, a $3.7 million bank loan, and another $1.75 million from a local Indonesian partner.

Speaker 3 Yes, and they also made use of an Indian government scheme that refunded up to 85% of the cost of any equipment bought and then exported from India.

Speaker 3 So, you know, they're getting pots of money from all over the place here.

Speaker 1 Always rinse the subsidies you can get. That's another one.
Particularly in highly regulated industries. There's always a tap that's spitting out government subsidies of some kind or another.

Speaker 3 That's a good tip for any would-be billionaires listening in. Yes, exactly.

Speaker 1 Now, this Indonesian project was built in phases. It took a while to be profitable.
Mittal told the Daily Telegraph in 2006, I went through great hardship and had to subsist on $250 a month.

Speaker 1 Now, to put that in context, average wages and cost of living in Indonesia in the 1970s, difficult to pinpoint.

Speaker 1 The average wage in the US at that time was around around $720 a month so billionaire living on what 60 bucks 50 pounds a week

Speaker 3 very different lifestyle to the one he enjoys now oh very very different but you know luckily his family was there with him Mittel's wife Usha and her newborn son Aditya joined him in Indonesia straight away they didn't speak the language they didn't have any extended family around them and Mittel was always at the steel mill so his wife and his baby would travel with him to and from the plant in the family's second-hand car every single day and Usha Usha and later Aditya soon became really familiar with the workings of the steel plant and it later on paved their way for them to be included into the business.

Speaker 1 To feed the plant, Mittal shipped in cheap semi-finished steel, rough steel from Taiwan and DRI, direct reduced iron, and that came from a plant in Trinidad and Tobago. He was a very hands-on boss.

Speaker 1 He knew how to operate the machinery.

Speaker 1 He talked to the line workers and he later said he still likes to sit with his workers in the canteen because that's where you find the soul and the pulse of a company.

Speaker 1 I wonder if the workers are so thrilled to have their boss in the canteen with them. I always know when the boss thinks, I just want to hang out with you guys.

Speaker 1 I want to go roll their eyes and so please go away.

Speaker 3 Yeah, and everyone starts talking about how much they absolutely love working at the company. It's such a brilliant job.

Speaker 3 Well, in 1978, after three years of hard work, the steel plant finally generated a profit of a million on $10 million worth of sales.

Speaker 3 So although his company was still part of the family business and his exact salary at this point isn't actually known, by the late 70s or early 80s, it's likely that Lakshmi Mittal was a millionaire.

Speaker 1 Well done Lakshmi Mittal. Now let's take him from a million to a billion.
He spent the 1980s running and improving that Indonesian steel plant.

Speaker 1 By 1989 the mill was producing around 300,000 tons of steel a year. Impressive for a mini mill but small fry compared to the output of traditional big steel plants.
He's now 39 years old.

Speaker 1 He's a father of two. He realised he did not have the time to build more plants from scratch.
So he decided he would go on a buying spree, buying up existing plants.

Speaker 3 Now, just to set the scene, by the late 80s, steel production in the West is stagnating. Demand for cars, for appliances, for construction materials, it had plateaued.

Speaker 3 So with demand levelling off, many nationalised steel plants were losing money and they were being flogged off to private companies.

Speaker 3 So take, for instance, British Steel, nationalised in the 1960s and after years of underperforming was finally privatized in 1988.

Speaker 1 Yeah, British steel lurched from crisis to crisis during that period. Lakshmi Mittal however saw an opportunity.

Speaker 1 He thought the demand for steel would rise again, especially in the economically developing world. China, India, Indonesia is a very good example too.

Speaker 1 So he bet on this DRI, this direct reduce iron that he'd been using at his plant in Indonesia. And he's right to do that, because they use this either DRI or scrap metal as their feedstock.

Speaker 1 Rather than making steel from scratch, you feed in either scrap or this already treated DRI stuff.

Speaker 1 And Mittal predicted that the scrap prices, because it's being used to feed into these new type of steel mills, the prices for that scrap would rise sharply.

Speaker 1 And so DRI, he believed, would be a more stable feedstock, what you put in the front end of the process for the future.

Speaker 3 Now, remember, Mittal had been importing this DRI from a plant in Trinidad in Tobago. That plant was very close to going bankrupt.

Speaker 3 Now, it was owned by the Trinidadian government and it was being run by a German management company. The government there had put the plant out for competitive tender.
It was trying to sell it off.

Speaker 3 And Mittal reportedly told the Trinidadian politicians, Your company is losing $10 million a month. Give me the management and I will pay you 10 million every month.
Very attractive deal.

Speaker 3 He also requested the opportunity to buy the plant outright on favourable terms if it ended up performing well. So they agreed to the deal.

Speaker 1 Q some savage cost cutting. When Mittal took over the Trinidadian plant, it reportedly employed 60 German managers that cost them 20 million in wages and management fees.

Speaker 1 So Mattel replaced them with 60 Indian managers who cost just $2 million, a tenth of the price.

Speaker 1 As well as cutting the overheads, he also invested $10 million in new equipment, cutting-edge equipment, to remove bottlenecks in the production line. And after three months, production had doubled.

Speaker 1 Within a year, the plant was profitable. Now, that's kind of a really impressive turnaround.
That's the kind of thing that some of our billionaires do.

Speaker 1 They take existing assets and make them run better, sometimes with some savage cost cutting, sometimes by getting in cheaper labor. Whatever he did, it worked.

Speaker 3 Yeah, in 1994, Mittel purchased the plant for 70 million in cash and a pledge to invest another 74 million over three years, which was a low price for a steel mill.

Speaker 3 And he also bought up struggling government-owned plants in Mexico and Canada. You know, the UK with British Steel wasn't the only place that was struggling at the time to like flog off these plants.

Speaker 3 He told the Financial Times, we never had to pay much for them, but the sellers were always happy to sell. For them, they were good deals.

Speaker 3 They were happy to leave the companies to someone else to operate because a government running a plant, that's actually a massive endeavor, right?

Speaker 1 Yeah, they don't really want to do it. By the mid-1990s, though, relationships within the Mittal family were starting to become a little strained.

Speaker 1 Mittal's father felt his eldest son was moving too far and too fast with the international expansion and wanted Ispat to stay Indian based.

Speaker 1 Previously as head of the family, Mittal's father had always attended merger and acquisition meetings as the family representative.

Speaker 1 But when Ispat set up a meeting to buy the Canada plant in 1994, Lakshmi was there on his own, attended instead of his father.

Speaker 1 And The Economist reported that Mittal's advisors were encouraging him to raise his public profile to help secure more business, make him more recognisable.

Speaker 1 But his father told the publication, the day you go for a high profile is the day you begin to fail.

Speaker 3 That's so interesting because I think, you know, in the billionaires that we've covered, it kind of splits down the middle, right?

Speaker 3 Some people want to grow that personal brand, but then some people very much prefer staying in the shadows. I don't know which is better.

Speaker 1 It depends, doesn't it? I mean, if you look at people like Richard Branson, it was all about the personal branding, wasn't it?

Speaker 1 And you look at people like Elon Musk, for example, I'd be hard-pressed to find a more identifiable business person on the face of the earth.

Speaker 1 And he became a talisman for when it came to raising money. Others, as you say, like to sort of run things from the background.
Who knows which is the best?

Speaker 1 But clearly, the more traditional Mittel Senior was thinking that kind of tall poppy syndrome. Don't get too noticeable, don't grow too tall, or people want to cut you down.

Speaker 3 Exactly. In 1995, they ended up splitting the family business.
Lakshmi Mittel took the international arm, Ispat International, and his younger brothers and father took Ispat, the India-based company.

Speaker 3 Now, reportedly, the two halves of the Mittel clan did not speak to one another for at least two years.

Speaker 1 We love a family feud on this show.

Speaker 3 Yeah, we do love a kind of succession-style fallout. And Mittel's company came to refer to his father and brother's company as a competitor ouch.
I mean, eyebrows would have been raised at that.

Speaker 3 Now, the Mittels themselves still haven't publicly commented on the split, and this is what, 30 years ago, but the family did reunite eventually, which is nice for them.

Speaker 3 And Mittel told the Telegraph in a later interview, my father is the man I admire most. I really got inspired by his hard working, his caring for the family, guiding everyone.

Speaker 1 I mean, what's your favorite one so far? We had the Ambanese, another Indian family had a massive split between the two brothers there.

Speaker 3 That is true. I mean, obviously, the Murdoch family went through their own highly publicised splits.

Speaker 1 Yes. And also, in this industrial space, David and Charles Coke had their differences.
It's really interesting, isn't it? It's the kind of stuff that TV dramas are made of.

Speaker 1 So around the time of this breakup, breaking away from his family business, Mittal registered his company in Rotterdam, but moved the company's head office and his family to London.

Speaker 1 By now, his son, Aditya, was studying for a business degree. His daughter was still at school.
And Mittal bought a house on a street in North London, referred to as Millionaire's Row for £6.7 million.

Speaker 1 20,000 square foot, 14 bedrooms, 12 bathrooms, glass elevator set in an acre of land, a rare amount of outdoor space for a London property, ain't that true?

Speaker 1 He said he loved living in London because of its central location for business.

Speaker 1 But his non-domicile status, I'll explain that in a minute, also meant he paid no tax in the UK on his overseas earnings.

Speaker 3 Yeah, it's like what attracted you to this London property? Was it the one acre of open space or the non-DOM status status you could get?

Speaker 1 So it's called non-DOM, non-domiciled status, and it means you can live in the UK, but for the purposes of paying tax on all your worldwide income, you're not in the UK. You're non-domiciled.

Speaker 1 So any money you make in the UK from your UK operations, you have to pay tax on. But if you're making tons of money from the far reaches of the earth, you don't pay tax in the UK on those earnings.

Speaker 1 UK is not unique in this. Lots of other countries do it.
It's seen as a way of attracting powerful, influential people who are wealth creators, who will find the UK a nice place to stay.

Speaker 1 And it has, you know, done very well for various estate agents, luxury goods merchants, although that status has been changed recently and is actually pretty controversial.

Speaker 1 Do you want rich people in your country or do you want to tax them more? That is a very open and very live debate right now.

Speaker 3 Yes, and it's become a real political football in the United Kingdom. Well, you know, at the same time he was moving into this lovely 14-bedroom property.
In 1995, he was still buying steel plants up.

Speaker 3 He acquired more from governments in Germany, in Kazakhstan, in Ireland.

Speaker 3 He actually paid only one Irish punt or Irish pound for Irish steel, the national steel makers, although he had to take on their debt, which was in the millions.

Speaker 1 Now, by now, he wasn't turning around failing plants by just cost-cutting and funding technical improvements.

Speaker 1 With operations now in six countries, he was quite well positioned to tap into the most profitable international markets.

Speaker 1 For example, in 1992, his Mexican steel company exported over 60% of its output to Asia. When prices in Asia collapsed in 1994, he had the contacts to redirect the sales to the US market instead.

Speaker 1 So he's got a kind of international web of distribution so he can train his production at whatever is the most profitable market at that time.

Speaker 3 So I think now might be a good moment to get more of a sense of how he was acquiring this many plants so quickly and in so many different parts of the world. Like we need an insight into psychology.

Speaker 3 Now he rarely reveals much about himself beyond the details of his business, but he did give Cold Steel author Tim Bouquet an insight into his thinking. This is a really interesting quote.

Speaker 3 He said, I once took up golf, started playing it every day. Then one day I was driving to the golf club and it worried me that I was becoming addicted, losing my focus, which I don't like to do.

Speaker 3 So I turned the car around and came home. I have never picked up a club since.
I mean, that is quite the extreme move. You know, a guy can have hobbies, Lakshmi.

Speaker 3 But, you know, those who worked with him have described him as not used to taking no for an answer and being driven, determined, and unsentimental.

Speaker 3 I think that is a trait of nearly all of our billionaires.

Speaker 1 You don't get many of our billionaires on this series who are basically soft-hearted and prepared to see both sides of an argument. They tend to be pretty

Speaker 1 hard-nosed and decisive. In 1997, Mittal floated or sold around 20% of ISPAT International on the New York and Amsterdam stock exchanges.

Speaker 1 You sell those shares, you raise more money for global expansion.

Speaker 1 Now, the people who look into these researchers and analysts were excited about ISPAT International, with one, Jeremy Fletcher from Credit Suisse First Boston, big investment bank, as was, saying it was arguably the best steel company on the planet.

Speaker 1 The company had a value of roughly $3 billion,

Speaker 1 and its IPO, its share sale, was one of the largest in the steel industry in 30 years. And that was the year.
Those IPOs give you a snapshot of what something's worth at any given time.

Speaker 1 They have to because people have got to buy the shares. That year Forbes estimated Lakshmi Mittel's wealth to be $1.9 billion.
He's made it.

Speaker 3 Steel billionaires were few and far between at the time. One analyst said making $1.5 billion in steel is like making $50 billion on the internet.

Speaker 3 And although he kept a low profile, you know, maybe he listened to what his father told him, Mittel's ambition was never in doubt.

Speaker 3 When he was told his company was the seventh largest in the world in 1998, he quickly answered, and why not the largest in 10 years?

Speaker 1 That is some achievement to make that kind of money in the steel industry. The reason he was able to buy up a lot of these plants is because it was in secular, long-term decline.

Speaker 1 So, actually, making a profit in this business, which is in decline, I think, is pretty remarkable.

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Speaker 1 So let's take him beyond a billion.

Speaker 3 In 2002, he found himself in the news when he admitted to paying £125,000 to the Labour Party just before the UK's 2001 general election.

Speaker 1 I remember this.

Speaker 3 Just weeks after Mitau's donation, Prime Minister Tony Blair wrote a letter to the Romanian government supporting Mittau's bid to acquire the state-owned steel plant Sydex.

Speaker 3 It was at the time Romania's second-largest employer and the plant accounted for nearly 6% of the country's GDP. So this acquisition was a big deal.

Speaker 3 He ended up buying it for 50 million, but many Romanian opposition politicians were outraged, saying that the value was up to five times more. This was a really big scandal at the time.

Speaker 1 The thing that really made the newspapers is because this whole episode sparked what was called the cash for favours row in Britain.

Speaker 1 Tony Blair, Prime Minister at the time, argued he was helping a British company.

Speaker 1 Then journalists pointed out that Mittal's holding company for his business was register in the Dutch Antilles, which is in the Caribbean, employed less than 1% of its staff in the UK company.

Speaker 1 And the head of a British steel company said Blair's lack of due diligence on Mittal's company was a deliberate slight on the UK steel sector, so bad feeling all round.

Speaker 1 Mittal and Blair denied all allegations of any connection between the donation and the letter. Mittal would go on to donate to the Labour Party again £2 million in 2005 and again in 2007.

Speaker 3 2004 was an expensive year for Mittel. In April, he paid £70 million for a new home for his family, Kensington Kensington Palace Gardens, known as Billionaire's Row.

Speaker 3 So, you know, he stepped up from Millionaire's Row up to a billionaire's.

Speaker 1 I used to walk my dog right past all of these things because there's a whole bunch of them all in a row, as you can see from Kensington Gardens.

Speaker 1 And yeah, they are massive, you know, these huge opulent things. They have their own security guard.
You can't just drive in at the front, but you can see it from the park.

Speaker 3 Yeah, you can just about walk your dog past them.

Speaker 1 Yes, exactly. I always imagine the billionaires are out there with their binoculars looking at the plebs.

Speaker 3 Looking at the little people walking their golden retrievers.

Speaker 3 So, interestingly, this mansion was actually owned by another billionaire, Bernie Eccleston. We've done him.
Yep.

Speaker 3 So, the 12-bedroom home had Turkish baths, a ballroom, a swimming pool inlaid with precious stones and pillars made from marble from the same quarry as Taj Mahal.

Speaker 3 I mean, talk about knowing how to spend that money. And then, just months later, it was his daughter's wedding.
So, another big payout coming up.

Speaker 1 Yeah, a modest affair. Invitations were sent out in silver boxes to a thousand guests.

Speaker 1 Kylie Minogue performed with fireworks near the Eiffel Tower, and one of the celebrations over the six days took place at the Palace of Versailles. It reportedly cost at least $55 million.

Speaker 1 Mattel said at the time, all these figures are speculation. Any father would want to give his daughter a very special day, and who can argue with that?

Speaker 1 But the Guinness Book of Records claimed it was the most expensive in the world at the time.

Speaker 3 I mean, this was an interesting one though, because I think that this was the first ever private gig that Kylie Minogue ever did. Now the private pop star concert is a huge industry.

Speaker 3 and this was also the first time Versailles had ever been hired for a private event because obviously it is a national monument for the French people.

Speaker 1 Yeah, well this is lifestyles of the rich and famous isn't it? But by 2005 the steel industry was still fragmented but two companies were pulling ahead.

Speaker 3 Yes, so one was Mittar Steel and the other was a company called Arcelor which was the world's most profitable steel company and that was a combination of three former state-owned steel plants in France, Spain and Luxembourg which were helmed by a Frenchman Frenchman called Guy Dolly.

Speaker 1 Yes, Arcelor's leadership had long feared a takeover attempt from the thrusting and ambitious Mittal.

Speaker 1 They even prepared a secret defensive strategy codenamed Project Tiger, in which Lakshmi Mittal was referred to as Mr. Moon and his son Aditya as Adam.

Speaker 3 What secret code name would you like to have?

Speaker 1 Thor. Thor, okay.

Speaker 3 I'll be Olden then, Thor and Olden.

Speaker 1 Okay.

Speaker 1 The aim of Project Tiger was an interesting one.

Speaker 1 It was to buy up strategically important steel companies, expand global reach, boost share value, thereby making itself too expensive to afford to acquire.

Speaker 1 In January 2006, though, Mattel launched his hostile takeover bid for Arcelor with an opening bid of £12.7 billion, so about today's money, about $16 billion.

Speaker 3 Soon after that opening bid, Dollet, who was the chief of Arcelor, was interviewed on radio in France.

Speaker 3 Now, he was quoted saying Mittel Steel was a company full of Indians offering Monet de Sange, a French term for worthless currency.

Speaker 3 The phrase literally translates as monkey money, which carried a racial overtone that didn't go unnoticed. Mittel said at the time, they're all emotional comments.

Speaker 3 I know Guy Dollet and he's a very nice gentleman. I respect him and I admire him, but later added, it was very sad we are not used to these kinds of comments in today's age.

Speaker 3 Mittel faced fierce resistance from Arcelor's board and pushback from politicians across Europe. And to many, Mita's takeover wasn't just a business deal.

Speaker 3 It was a threat of global finance coming in and stripping control from a cornerstone of the national economy.

Speaker 1 Yeah, and that is really interesting because there's lots of talk about steel is considered a strategic industry.

Speaker 1 And to lose control of it is considered one of those things you don't necessarily want to do. Because in times of trouble, steel is obviously used in the defense industry a lot.

Speaker 1 Can you make your own tanks? Can you make your own planes? Can you make your own nuclear submarines? These are the questions that come up.

Speaker 1 So it's seen as a sovereign asset, which is why these kind of things become super sensitive.

Speaker 3 That's so interesting.

Speaker 3 So it's not even that steel is just a kind of emotional touch point for a lot of people, you know, whose families may have grown up working in steel mines and steel manufacturing.

Speaker 3 There's a bit of that. It's geopolitical.

Speaker 1 It's geopolitical as well. Do you want to be a country which can't make its own steel? Even if it's losing money, it's something we want to hang on to because it has strategic value.

Speaker 3 Well, Mito said there were reports of him sipping champagne while flying in for negotiations. So clearly there's a little bit of a PR move against him, exactly.

Speaker 3 He said his team referred to these flights on his part as the pizza flight because that's all they had time to eat while working long hours on the deal.

Speaker 3 So try to push back on this idea of him being this champagne-sipping billionaire coming in to wrest away a cornerstone of the national economy in France.

Speaker 1 But he was determined and he won. After six tense months of negotiations, Mittal's bid rose to nearly £18 billion, just over $20 billion,

Speaker 1 and was accepted. And then in 2007, the merged company, Arcelon Mittal, biggest steel company in the world at that time, was born.

Speaker 3 After the merger, it became the first steel producer to manufacture over 100 million tons of steel annually. That is a lot.
It was three times larger than its nearest competitor.

Speaker 3 It controlled about 10% of the global market. And that same year, Lakshmi Mittal was ranked the fifth richest person in the world and the richest resident of Britain.

Speaker 1 100 million tons of steel annually. Just for comparison's sake, the entire UK produces around 5 million tonnes of steel every year.

Speaker 1 But soon after the merger, there were some serious issues with one of the group's assets.

Speaker 1 In 2007, it was reported that 90 workers had died since 2004 while working in Mittal's coal mines in Kazakhstan amid some long-standing accusations of poor labour and safety standards.

Speaker 1 A spokesperson for ArcelorMittal said that $260 million had been invested in the mines and a further $63 million was planned.

Speaker 1 The company also pledged to install more methane detectors so you can tell what's going on underground.

Speaker 3 But then in October 2023, over 40 people died after a fire broke out at one of Arcelor Mito's coal mines in Kazakhstan.

Speaker 3 The fire was thought to be caused by a methane blast and the accident prompted the Kazakh president to ask Arcelor Mito to leave the country.

Speaker 3 Aditya Mito, that's Lakshmi's son, now the CEO of Arcelor Mito, said in a statement, it's little consolation to say that the company expended considerable effort, further reinforced since 2020, in improving the safety performance of the operations in Kazakhstan.

Speaker 3 Now, by December 2023, the Kazakh government had bought out the Arslometo subsidiary at the cost of almost 300 million, which resulted in an $800 million hit.

Speaker 1 So basically, they were forced to sell it to the government there at a big loss of nearly a billion dollars.

Speaker 1 It is no consolation to say that mining and steel making is a dirty, dangerous business, but clearly you can do a lot to mitigate those risks. Some will say they did not do enough.

Speaker 1 They would say that they have invested to try and mitigate those problems.

Speaker 1 For many years, ArcelorMittal was the biggest steel producer in the world, but they've seen a decline in output in recent years, driven by volatile markets, divestments like the Kazakhstan one we just spoke about, intensifying competition.

Speaker 1 As of 2024, it is now the world's second largest steel producer, behind a company from Guess Where

Speaker 1 and Guessing China? You got it in one.

Speaker 1 It's worth saying in this point: since that merger of Arcelor and Mattel, the share price initially went up very strongly, and that's when he was one of the richest people in the world and the richest person in Britain.

Speaker 1 But since then, some of these competition issues I've talked about, like particularly from China, the share price is down.

Speaker 1 In fact, it's lower than it was at the time of that actual tie-up between Arcelor and Mattal.

Speaker 1 So he's still very rich, but the steel industry has proved even harder to make a living in than it was on his rise. And it's something that all countries, companies are grappling with.

Speaker 1 There is simply an oversupply of mainly Chinese steel in the world looking for a home which is undercutting prices around the world.

Speaker 3 But what's the latest on the man himself? Are there any personal updates from Lakshmi Mittal's personal life?

Speaker 1 Do you remember we talked about those non-dom, the people who live in the UK but don't pay tax in the UK on their overall earnings?

Speaker 1 That regime has seen a crackdown from this government and the last actually, and there are rumours that he may move his tax residence out of the UK.

Speaker 3 Yeah, in May 2025, Bloomberg reported he's bought a $100 million home in Dubai.

Speaker 1 Which is where a lot of the non-doms who leave the UK go and set up shop. What we do now is we take our billionaires and we judge them on a bunch of categories.

Speaker 3 So the first category is wealth. You know, we look at this through a ton of different ways like rags to riches, net worth.
You know, the rags to riches idea is this idea of how far have they come?

Speaker 3 So, Lakshmi Mittel, born into a family of entrepreneurs, started out in his family's business. He did have a kind of leg up, didn't he, by working in the family biz?

Speaker 1 Definitely working in a family business, and that was a family business that was well placed to capitalize on India's economic boom, which happened over these decades.

Speaker 1 So, yeah, right place, right time, had a leg in. Nevertheless, did share a house of 20 family members in poor suburbs of both Kolkata and Rajasthan.

Speaker 1 So it's not as if he was born with a steel spoon in his mouth.

Speaker 3 No, definitely not. I mean, you know, net worth, he's kind of, at the time of recording, he's worth 21 billion.
And, you know, he does like to spend the cash.

Speaker 3 You know, when he spends money, he breaks records, you know, house property, daughter's wedding.

Speaker 1 And bought one of the most expensive houses in London in history. For wealth, he's up there.
He's not entry-level. He was the richest person in Britain, fifth richest person in the world at one point.

Speaker 3 his fortune has suffered a bit because the steel industry has suffered but i'm still going to give him a solid seven yeah i think a seven out of ten although actually i'm going to bump him up to an eight out of ten because i do like it when he's billionaires the spending the wedding the private concert with kylie minog i mean that's that's billionaire stuff okay eight for you seven for me controversy We talked about some of those safety issues.

Speaker 1 Steel and mining are dirty and dangerous businesses, but as well as those Kazakhstan fatalities, a lab technician died in a fire at an Isbat plant in Ireland in 2001.

Speaker 1 An official said his life could have been saved if the company had spent the £15,000 that had been recommended to be spent on improving safety. So that's quite a bad mark.

Speaker 3 Yeah, I mean, in response, Lakshmi actually said that he personally believed that safety rules might not have been followed. And that plant later on closed and went into liquidation five months later.

Speaker 1 Pollution from plants, of course, steel is one of the most polluting industries in the world.

Speaker 1 The amount of energy that gets poured into this to heat it up to thousands of degrees centigrade, and both the carbon emissions and the fumes and stuff that come off it are a big problem.

Speaker 1 For example, there's one steel plant in the UK which for many years has been the single biggest carbon-emitting entity in the entire country.

Speaker 1 And you imagine all those steel plants all around the world. It is a dirty business.

Speaker 3 It is a big problem if you care about the environment.

Speaker 3 I mean, other than that, obviously, we've got that whole scandal over, you know, cash for favours, the political donations he made to Tony Blair, that letter that Tony Blair ended up writing to the Romanian government.

Speaker 1 He insists the donation and the letter were not connected.

Speaker 3 He's not a man who has avoided controversy in his time. No.

Speaker 1 It's one of those things, how much is connected to the industry and how much could you personally lay at his door?

Speaker 1 I'm going to say middle of the pack here. I'm going to give him a four.

Speaker 1 Oh, that's... Yeah, I think...
Only because, you know, it's not like he's shafted his rivals. He's not an arms dealer.
He's not a drug dealer.

Speaker 3 He did fall out with his own family. Yeah,

Speaker 1 that's their own business.

Speaker 3 Who hasn't fallen out with their dad and their brother at some point?

Speaker 1 Over billion-dollar empires.

Speaker 1 I'm going to give it a four for controversy.

Speaker 3 I'll go a little bit higher to a five out of ten. Let's see if Lakshmi Mittel can redeem himself.

Speaker 3 We've got a category called giving back or philanthropy, talking about how they've kind of contributed back to society.

Speaker 1 Some quite good efforts here. £15 million

Speaker 1 in 2012 to the Great Ormond Street famous Children's Hospital.

Speaker 1 But then he withdrew a pledge to make a $180,000, so $200,000 donation to the London School of Economics after his daughter was refused a place.

Speaker 1 A spokesman for Mattel said it was malicious gossip, but the LSE stood firm.

Speaker 3 Interesting. Yeah.

Speaker 1 There was $25 million to Harvard for the Lakshmi Mattal and Family South Asian Institute.

Speaker 1 And this, my favourite one, is actually he watched the Indian team win only one medal at the Olympics in 2004, so spent nearly $10 million to support Indian athletes to train for the 2012 Olympics, and they won six medals in that, but the scheme closed in 2014.

Speaker 3 So, if you want to win five Olympic medals, you have to spend about nine million.

Speaker 1 Yeah, nine million dollars. So, that is one and a half million dollars per medal.

Speaker 3 He's actually had a lot of

Speaker 3 donations to healthcare and research. He's given three and a half million pounds to Oxford University's vaccine research, sponsored a permanent professorship there.

Speaker 3 He gave 12 million to India's COVID response. So, you know, he's not ungenerous.

Speaker 1 He's not ungenerous, but these numbers, when you stack it up against, what is he worth now? $21,000 million, $21 billion.

Speaker 1 You know, he's no Bill Gates.

Speaker 1 And even people like Larry Ellison from Oracle, he's funding, you know, a billion here and a billion there for research institutes. I'm going to give him a...

Speaker 1 It's a nice smattering of philanthropy this, so I'm going to give him a four.

Speaker 3 A nice sprinkling.

Speaker 1 Nice sprinkling.

Speaker 3 Well, I mean, we've come up increasingly against billionaires who don't even share any kind of details of their philanthropy.

Speaker 3 So I feel like the fact he is relatively transparent, unlike some of the other billionaires we're now covering, I will give him maybe a five out of ten.

Speaker 1 Okay, and then power and legacy. We opened this episode by saying that he had helped reform an entire industry and that is true.

Speaker 1 He is a reflection, I think, rather than necessarily a cause of a globalized steel industry. It used to be kind of a sovereign thing that countries did on their own.

Speaker 1 He came in and bought up these old, decaying, sovereign capabilities and put them together into an international empire.

Speaker 1 and so that is a a big deal and has reshaped the industry he's also been instrumental in changing the technology away from these big blast furnaces to these small mini mills which use less energy i think always ask the question would that have happened anyway maybe

Speaker 1 but i think that mittal is a giant in this industry um so i would give him a I'd give him a good seven, I would say, for power and legacy in this industry.

Speaker 3 Yeah, I have to say that until this episode, I didn't really think of steel as one of those industries that touched on so many different things in politics, in kind of the environment, in even, you know, countries' national identities and

Speaker 3 defense. You know, so I think I'm going to bump up my initial assessment of it.
I think I'd give him a seven out of ten. Okay.

Speaker 1 So Lakshmi Mittal came from not so humble beginnings, but reef shaped industry, is reshaping some of the technology and made a lot of money in an industry where it is hard to make money.

Speaker 1 Most people lose a fortune in the steel industry. He made a a fortune.

Speaker 3 Yes, and I think, you know, for what he's done to steel and for the fact that, you know, he still built one of the biggest steel companies in the world, he probably is a big contender in the billionaire stakes.

Speaker 3 Yeah.

Speaker 1 So is he good, bad, or just another billionaire? What do you think? Email goodbadbillionaire at bbc.com or drop us a text or WhatsApp to 001-917-686-1176. Tell us what you think.

Speaker 3 That's goodbadbillionaire goodbadbillionaire at bbc.com or 001-917-686-1176.

Speaker 3 And also, don't forget to include your name because we may read out your message on a future episode.

Speaker 1 We've had some feedback in on our episode on shipping magnate John Frederickson. One of his former employees has got in touch, someone who managed ships for Frederickson.

Speaker 1 He describes his time working for him as a fascinating period and Frederickson as a fascinating man.

Speaker 1 He says one thing about looking after his assets, not a dull moment, and absolutely no certainty about what might happen tomorrow. You have to be on the tips of your toes leaning forward.

Speaker 1 Not sure that's a good thing if you're captain of a ship, but there we go. Congratulations, your podcast is excellent, says Captain Peter Cooney.
And we say thank you very much.

Speaker 3 Well, if you've ever worked for any of our billionaires and haven't signed an NDA, we would love to hear from you.

Speaker 3 Brandt from San Francisco Bay Area in California also got in touch to say, I love the show. I've always had an affinity with the finer things in life, same Brett.
I.e.

Speaker 3 watching MTV Cribs or just listening to multi-millionaires and billionaires interviews this show is an absolute favorite of mine thank you he says john fredrickson is just another billionaire he wanted to be rich and he did it with great expense hard work ingenuity and not taking no for an answer those to me are the typical traits of a billionaire thanks very much brent another listener says greetings from nigeria greetings back from the from the very first day i stumbled upon this podcast i've been listening to it non-stop even going back to the very first episode.

Speaker 1 The information shared is incredibly informative and the explanations of financial terms are top-notch. Thank you.

Speaker 1 Regarding the latest episode on John Frederickson, in my opinion, he's a brilliant billionaire. Why? Because taking calculated risks is part of the journey.
No risk, no glory. Fear only limits us.

Speaker 1 To survive in this world and achieve greatness, one must be an opportunist. And that's exactly what brought him his wealth.
Thank you from our listener in Nigeria.

Speaker 1 So who have we got next time?

Speaker 3 So we have the American actor, a filmmaker, playwright, studio mogo, all-around businessman and hustler, and also the guy who pioneered a famous drag character.

Speaker 1 Yeah, it is Tyler Perry, who went from putting on plays to an audience of one to becoming one of the most influential studio bosses in the US.

Speaker 3 That's right, he's worth $1.4 billion and he's made over 30 feature films and 1,700 episodes of television talk about a work ethic.

Speaker 1 And he got some of his business acumen from one of our other billionaires, no other than Oprah Winfrey.

Speaker 3 So that's Tyler Perry on the next episode of Good Bad Billionaire.

Speaker 1 Good Bad Billionaire is a BBC World Service podcast produced by Tamzin Curry. The researcher is Hannah Ramazzani.

Speaker 3 The editor is Paul Smith and it's a BBC Studios production. For the BBC World Service, the commissioning editor is John Mino.

Speaker 1 Dashing through the store, Dave's looking for a gift. One you can't ignore, but not the stocks he picks.
I know, I'm putting them back. Hey, Dave, here's a tip.
Put scratchers on your list.

Speaker 1 Oh, scratchers? Good idea. It's an easy shopping trip.
We're glad we could assist. Thanks, random singing people.
So be like Dave this holiday and give the gift of play.

Speaker 1 Scratchers from the California lottery. A little play can make your day.

Speaker 1 Please play responsibly. Must be 18 years or older to purchase play or claim.