Mines minister backs Ashanti/Lonmin merger

ACCRA, Oct 8 (Reuters) - Ghana's mines and energy minister was reported on Friday as backing a merger between Ashanti Goldfields Co Ltd (AGC) (AGC.GH) and Lonmin Plc (LMI.L), which said this week it was in talks with Ashanti.

``Such a merger will enable AGC to become a bigger entity and have a competitive edge over other mining companies,'' Fred Ohene-Kena told the pro-government Daily Graphic newspaper.

He said the government, which has 20 percent of the gold miner, had been kept informed of the progress of the talks.

One of the conditions for its approval of a merger would be that the shares of the merged company would be listed on the Ghana Stock Exchange, like Ashanti's now.

Ohene-Kena said the government would have what he described as a golden share in the new company. Referring to a state holding in the merged company, the newspaper said he said that ``probably its 20 percent shares might be reduced to half,'' implying a 10 percent stake.

Separately, Ashanti's corporate affairs manager in Accra told Reuters that the Ashanti board would be meeting in London on Saturday to discuss the merger plans.

Kwamena Anaman said the two companies had been talking since last week and they were now evaluating each other's assets.

``There are mergers all over by big companies and in the gold industry, without exception, those to survive are those who could foresee the direction of the world economy and grab the opportunity for stategic mergers,'' he said.

``This is what AGC and Lonmin are doing.''