Ghana snubs Ashanti offer

The Ghana-based gold mining company Ashanti Goldfields says it has rejected the takeover bid from the British-based company Lonmin. In a letter to Lonmin, Ashanti's chief executive Sam Jonah said the Ghanaian Government was not convinced of the merits of the deal.

"The merger was our idea and we are still committed to building a focused precious metals company ... We are still very excited by it - it is a tactical withdrawal," Mr Jonah said.

Ashanti Chief Executive Sam Jonah: "A tactical withdrawal"

Ghana owns 20% of the company and has a veto over any deal.

Lonmin - formerly a part of Lonrho - which owns 32% of Ashanti, said it would resume negotiations if requested.

On Monday, Ashanti reached a deal with creditor banks to renegotiate its debts after speculative deals in the gold market led the company into financial difficulties.

Lonmin's bid followed the apparent weak financial position of Ashanti.

Major player

Ashanti Goldfields was rated the largest company in sub-Saharan Africa in the London Financial Times annual survey of global companies.

Gold is Ghana's largest source of foreign exchange, providing some $500m-600m a year.

Stagnant prices have forced some of the country's smaller mines to close down in the past six months, leading to job losses in the sector.