No reason to scrap Ashanti golden share - Minister

STELLENBOSCH, South Africa, Aug 23 (Reuters) - Ghana's finance minister said on Thursday he saw no reason why the government should consider giving up its ``golden share'' in miner Ashanti Goldfields.

The golden share has no monetary value but allows the West African country's government to override Ashanti's board decisions, giving it a veto over mergers.


Analysts have long said it was a major drag on the share price of Ashanti, one of Africa's biggest gold miners.


``There were very good reasons why the golden share philosophy has been retained since independence and the situation has not changed to vary that decision,'' Yaw Osafo-Maafo told Reuters in an interview.


Ashanti said in April it was making progress in talks with Ghana's new government about removing the golden share, which allowed the previous administration to scupper a merger with UK-based platinum producer Lonmin Plc in 1999.


Speaking on the sidelines of an African investment conference in South Africa, Osafo-Maafo reiterated that the government was not yet ready to market any of its 20 percent stake in Ashanti because the share price was not good enough.

``At the moment, the gold price and the price of Ashanti stock is not attractive to us, so we are not selling now,'' he said.


In any case, Ghana would have to retain a stake in the mining company to protect its golden share, he said.


"We have not determined how much of our Ashanti stake we would be willing to sell, but it will not be all of it.


``Ashanti is such an important project as far as we are concerned that it will have to be a cabinet decision and that is a decision we haven't made yet,'' he said.


Ghana plans to raise $200 million from the sale of state assets by 2004 to cut a crippling 6,100 billion cedi ($860 million) domestic debt.

Ashanti's shares took a big tumble in October 1999, after a sudden spike in the price of gold sank its hedge book and brought the company close to collapse.


The U.S. listed shares, its most liquid stock, have recovered some ground since reaching lows in the $1.50 range last year but have not topped the $4level since November 1999, when Lonmin withdrew its $7 per share offer for the company.


In New York, the stock traded at $3.85 by 1430 GMT, unchanged from Wednesday.