From Biznews community member Daniel Sutherland
A brief history of the Dominion mine is that it was first owned by Aflease, and then by Uranium One.
An extensive and professional feasibility study on Dominion was published on 13 September 1996, by the then Gold and Uranium Division Geology Department of Anglo American Corporation of South Africa. It concluded decisively that despite the size of the deposit, it could not be mined economically [Noseweek issue # 198]
In November 2008, Uranium One announced that its erstwhile flagship, the Dominion mine in South Africa, was effectively closed. Uranium One wrote down mineral interests, plant and equipment to the tune of $1.8bn on Dominion, which had been attributed with a “salvage value” of $50.5m. [Noseweek issue #198]
On 14 April 2010, the Guptas used their Oakbay vehicle to acquire Dominion, apparently for the equivalent of $37m, and renamed it Shiva. Whether the Guptas paid a cent for the privilege is another question. It is evident that most if not all of the acquisition was funded by the SA Industrial Development Corporation (IDC).
When Oakbay was listed in Johannesburg in 2014, IDC loans to Oakbay amounted to R399m. Of this, R257m was capitalised interest – interest which Oakbay had not paid – and was converted into equity (shares) in Oakbay upon its listing. Yes, the Guptas had failed to pay a cent of interest – which rapidly built up to R257m. [Noseweek issue #198]
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I have it on impeccable authority that Chinese investors offered $96m for the Dominion mine, but the Guptas walked away with it for $37m.
At Shiva, the problems are legion. The plant is inappropriate and needs to be reconfigured, at a cost of billions of rand.