Lakshmi Mittal: The King of Steel
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The richest man in the U.K., the second richest man in Europe and the sixth richest person in the world: this is who Lakshmi Mittal is. He now boasts a fortune of $31.1 billion and owns the greatest steel empire in the world, with operations in 14 countries over four continents. Here is his story.
Lakshmi Narayan Mittal was born on June 15, 1950 in a desert village in India, called Sadulpur. His extended family of 20 was a typical poor Indian one, who lived on bare concrete floors, cooked on an open fire in the brickyard and slept on rope beds. After he and his family moved to Calcutta, sometime in the early 1960s, his father entered a steel business and started to become significantly successful. In 1969 young Lakshmi graduated from St. Xavier’s College, a prestigious institution in Calcutta, with a Bachelor of Commerce degree in business and accounting. His next step in life was to join his father in the prosperous steel business.
While in Indonesia, where he went to find a good real-estate investment opportunity for his father, Lakshmi realized that purchasing a rundown steel mill in the country would be a great investment. He convinced his father to buy the property and this marked the beginning of his own steel empire. After the purchase, Lakshmi founded his own company named “Ispat” (Sanskrit for “steel”), modernized the Indonesian mill and turned it into a profitable business. This was also the period when he decided to marry the daughter of an affluent moneylender. Her name was Usha and she is the mother of Mittal’s two children: a son named Aditya and a daughter named Vanisha.
Seeing that his venture in Indonesia was a bright and fruitful idea, Mittal decided to follow the same pattern in other countries as well. Soon his company started to acquire more foreign mills (in Mexico, Algeria and Trinidad) and then bring a lot of profit from there. One of his strategies was to bring Indian managers from his family’s operations to the new mills, knowing that these employees had already been trained well and knew how to make the new acquisitions profitable.
After the Soviet Union collapsed in 1989, Lakshmi Mittal turned his attention to the huge steel mills in the heavily industrialized East. One of his biggest investments was in Kazakhstan (in 1995), where the plant didn’t have hot water or heat and the workers hadn’t received their payment for months. As a great savior, Mittal invested a whopping $1 billion in renovations thus adding a new important acquisition to his growing empire.In 1995 Mittal and his family moved to London. Here he made some quite influential friends and even became a central figure in several controversial affairs. One example is the 2002 “Mittal Affair”, when the Indian steel magnate sought Tony Blair’s help (who was then the Prime Minister of the U.K.) in his efforts to buy Romania’s state-owned steel company, named Sidex. Blair’s response to this request was a letter to the Romanian government in which he stated that should the country decide to sell the industry, the European Union might open its gates to them sooner. The original letter even had a passage that described Mittal as “a friend” of the U.K. Prime Minister, but that particular part was eventually removed.
In exchange for Blair’s help, Mittal made a generous donation of £125,000 to the Labour party, several weeks after the 2001 General Elections in the U.K. Also, Blair mentioned that the holding company for Mittal’s international steel operations was a British one, which was not true, as the company (LMN Holdings) was registered in the Dutch Antilles, to avoid burdensome British taxes. The Prime Minister later declared that he hadn’t known about the Dutch registration of LMN and also that he was not aware of the important donation that Mittal had made for his party.
In 2004, Mittal’s company merged with International Steel Group (five major steel mills in the U.S.) and thus became the largest steel producer in the world. This was also what turned Lakshmi into the richest British citizen. In 2005 he purchased a stake in China’s Hunan Valin Iron & Steel Group, paying $314 million and getting a 37% ownership in the company. For the record, China is the largest importer and exporter of steel. Then, in 2006, the Indian billionaire bought the world’s second largest steel company, Arcelor of Luxembourg, thus extending his empire even further into the horizon.
Mittal’s personal life is just as impressive as his business evolution. The opulent life that he and his family lead is often criticized (his daughter’s wedding cost a staggering $55 million)and the number of luxurious residences that he owns is almost outrageous. His personal properties include: a residence at 18-19 Kensington Palace Gardens ($128 million), also referred to as the “Taj Mittal” (his residence and the Taj Mahal used marble from the same quarry); No. 6 Palace Greens residence, Kensington Gardens (£117 million), bought for his son; No. 9A Palace Greens residence, Kensington Garden (£70 million,) bought for his daughter; Summer Palace at 46B, The Bishops Avenue (£40 million); a colonial bungalow-turned house at No.22, Aurangzeb Road in New Delhi, India ($30 million); and most recently a luxury residence in Perthshire, Scotland (£15 million).
Even though some really serious accusations were directed towards him, including slave labor work conditions for his employees, abhorrent safety records in his mines and grave environmental damage from his mills, Mittal received numerous awards and honors over the years. On the positive side, the steel mogul is also involved in several philanthropic projects and is currently planning a zero carbon footprint estate in Surrey, England. He purchased the land for the project with £5.25 million and intends to spend another £25 million to make it perfectly eco-friendly. Talk about opulence!