Ghana May Drop Veto Over Ashanti, Mines Group Says

Accra, Ghana, March 30 (Bloomberg) -- Ghana's new president may drop the right to veto decisions by Ashanti Goldfields Company Ltd., Africa's No. 4 gold producer, paving the way for asset sales or even a takeover, an industry official said,.

President John Kufuor, who succeeded Jerry Rawlings in January, discussed the government's control of 20 percent of the company with mining executives yesterday, said James Anaman, president of the Ghana Chamber of Mines. South Africa's Gold Fields Ltd. and Harmony Gold Mining Co. have previously expressed interest in Ashanti's mines.

Mining companies have been reluctant to invest in Ghana since Rawlings used the state's ``golden share'' to prevent a proposed takeover of Ashanti by U.K.-based Lonmin Plc in 1999. Anaman said Kufuor would resist such meddling.

``There will be no sacred cows'' if a sale of Ashanti ``makes economic sense,'' said Anaman. Kufuor and his advisers ``come from a capitalist tradition.''

Ashanti has struggled to recover from a brush with bankruptcy in 1999 brought on by excessive borrowing against future production. The company tripled its income before extraordinary items in the last three months of last year, and posted record production for the year.

These operating results did not prevent a net loss of $141 million for 2000.

Ghana's government might consider selling its 20 percent stake in Ashanti should the share price rise significantly, Anaman said.

Anaman, who is also a spokesman for Ashanti, said yesterday's meeting was the latest in a series between managers of mining companies and ministers appointed by Kufuor, a U.K.-educated lawyer. Mining accounts for 40 percent of Ghana's annual export income of about $1.5 billion, he said.

Kufuor beat Vice President John Atta Mills in a December election for the right to replace Rawlings, a former military commander who had ruled Ghana since 1981. His accession marked the West African nation's first democratic transfer of power.

The Ghanaian mining chamber has about 40 members, Anaman said, led by Ashanti, Gold Fields and Australia's Resolute Ltd.

Ashanti shares fell 20 cents, or 8.3 percent, to 2.2 euros in Germany.