Lakshmi Mittal was the third in the list of wealthiest people in the world in 2005, however he has fallen to the 91st position in 2019. What caused a significant reduction in his wealth?

Lakshmi Mittal is the product of the wave of Globalization that started around 1970’s. To answer your question i need to give you some background.

The major powers decided that another World war would be too destructive for the world economy and steps had to be taken to integrate the developing world into the developed world. This was especially important as people could see the effects of Nuclear weapons that had been used in Japan During WW2. It was obvious another WW would lead to end of life on this planet. It was becoming obvious that we could either live as half slaves or equals and both things were not possible together. So began the process of Liberalization of the world.

• Western Germany invited Engineers from the developing world (This is how the foundation of Turkish Diaspora in Germany was laid)
• USA introduced mass migration from the non White world for the first time as equals instead of as slaves on a large enough scale. The laws banning marriage between Europeans and non Europeans were abolished around 1960’s in most american states.
• USSR Allowed jews to migrate to the west who got jobs in Finance industry there. This opened up western markets to Soviet energy and USSR to Western Technology and Agriculture. Mikhael Gorbachov tried to liberalize the economy further but it had the unintended consequences of collapse of USSR.
• UK which was the hub of Global trade with Pound Sterling being the reserve currency of the world positioned itself as the gateway for American money to be invested into Europe and vice versa. (Though UK is considered a Migrant country but most of Migrants live in major cities and English keep moving out of such cities for reasons ranging from cultural to the real estate prices growing exponentially there making it unaffordable to for most ethnic Brits)

A few things happened in India at that time.

• The Industrialist in India which were working mostly with the Brits started seeing the erosion of their wealth as Indira Gandhi started nationalizing Major industries in India like Mining, banking etc and abolished monarchies.
• The corporates many of which held their money abroad saw erosion of their wealth and were left only with contacts with Beurocracy and Political class in India. Many of these people moved abroad.

I remember once reading that most of successful managers at Mittal Steel were those that had work experience at SAIL (a Govt owned Steel company in India which back then had a major marketshare in the sector) but failed to make any contribution in the indian market due to red tape prevalent in India back then. Mr. Mittal went abroad and bought huge swathes of steel industry in Europe which was reeling back then at really cheap valuations.

This is how he became the third richest man in the world back in 2005. Now i would outline the reasons for his fall on the list.

• Generating new demand in the already industrialized world can be really hard especially if the markets of west are saturated and in such markets the only way to grow is to buy out older companies and use their established connections to generate new business. This was not possible since the steel plants that were bought at cheap valuations in Europe were sold due to low demand and the merger with arcelor could at best generate small gains.
• Mr Mittal Lives in UK though the company is headquartered in Luxembourgh. This made sense in the 20th century when UK was part of the EU and steel and coal trade between the EU Nations but it made no sense with Brexit movement gaining steam.
• Mr. Mittal could have raised money to fund his expansion but as i explain earlier there was no new demand and any investment in now liberalized Indian economy would have failed to compete with the growth in EU economy which is almost the size of USA. The capital flight happening in india at this time did not help either with Currency exchange rate. Besides Borrowing money was cheaper in EU due to negative interest in EU but they were higher in UK where Mr Mittal resided. It just did not make sense to borrow from UK to do business in Europe.
• For the rich Europeans UK was gateway for investments in the Developing world or for investments in American economy where interest rates were still positive. and any investments needed by behemoths in EU could not be funded by a migrant from a country which had more poor and undernourished people than Africa combined (India back in the 1990’s went bankrupt due to corruption happening there). a typical liberal would look at the 3rd richest man in the world and ask how he generated this wealth having left his country in poverty. A liberal would also be one who would be willing to take investments from non whites in this time.
• Most of the wealth was being generated by the Services sector in the west in this period as i pointed out the industrial sector in Europe was saturated. This is the era that saw the growth of Microsoft, Google, Facebook, Amazon all of which became trillion $ companies having started around 1980’s - 1990. All of them being Service sector Companies. Mr. Mittal failed to invest in any such company.
• Basically due to the fact that Arcelor Mittal had no access to the increase in Quantitative easing that was happening in the ECB, Japanesse Central bank and Federal Reserve, he did not have capital to fund any company he may have had ambitions to fund or found.
• Most of Global growth was being hogged by China which was heavily subsidizing it’s steel exports to the west.
• The fact that the UK is no longer the superpower now might not have helped him either.