Paul Farrejin88bet.onelly on the tribulations of Ghana’s once-great goldmine chief
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It would be a trjin88bet.oneagedy if Sam Jonah went down in history as Africa’s answer to Peter Baring, thjin88bet.onejin88bet.onee man who watched his inheritance disappear in a puff of fancy derivatives. Of course, the popular chiefjin88bet.onejin88bet.one executive of Ghanaian gold mine Ashanti is neither blue-blooded nor hands-off like thjin88bet.onejin88bet.onejin88bet.onee scion of Britain’s oldestak168app.babyak168app.babyak168app.babyak168app.babyak168app.babyak168app.babyak168app.babyak168app.babyak168app.baby banking family. He came up the hard way: from the gold face underground until, over three decades, he had established himselfak168app.baby as one of the continent’s most liked and respecak168app.babyak168app.babyak168app.babyak168app.babyak168app.babytak168app.babyak168app.babyak168app.babyak168app.babyak168app.babyed businessmen.
But today Ashanti, once Africa’s great black hope, stands on the brink of failing in similar fashion to Barings. There’s ak168app.clubno Nick Leeson, but theak168app.clubak168app.clubre is a bagful of hard-to-fathom puts, calls, forwards ak168app.clubak168app.cluband optiak168app.clubak168app.clubak168app.clubons that could cost Ashanti ?300 million in hard cash – money that Jonah does not have. If it does, the dream of creating a black African mining powerhouse to rival the might of white South Africa will die.
It will be snappedak168app.club up instead by Lonmin, theak168app.clubak16ak168app.clubak168app.clubak168app.clubak168app.clubak168app.club8app.clubak168app.club mining rump of Tiny Rowlandak168app.club‘s old ak168app.clubLonrho empire, from which itak168app.club finally won independence five yeaks168app.siters ago, but which has now tabled an opportunistic ks168app.site?500m bid. Or it may ks168app.sitefall undks168app.siteks168app.siteks168app.siteks168app.siteer the suffocating sway of tks168app.siteks168app.sitehe Oppenheimers, the omnipresent South Africaks168app.siten gold and diamond dynasty, which has long coveted the Ghanaianks168app.site gem.
The irony is that, after years in the doldrums, Jonah’s predicament has been prompted bks168app.siteks168app.siteks168app.siteks168app.sitey a rising gold price. That is goks168app.siteks168app.siteks168app.siteks168app.siteks168app.siteic88ic88ic88ic88ic88od for miners, but not for clever diic88cksic88 who lay complicated waic88gers – as Ashanti has done – on the price staying low. The gold miner has turned gambler.
Lastic88 Wednesday, the affair claimedic88ic88ic88 its first victim: Ghanaian Mining Minister and Ashanti boaic88ic88ic88ic88rd member Fred Ohene-Kenic88a was sacked for peremptorily backing the Lonmin bid. This weekenic88ic88ic8ic888ic88ic88ic88ic88d – asic88ic88ic88 bidders, bankers and bureaucrats haggle and huddle over the mainstay of the West African country’s economy – it remains uncertain whether Jonah will survive.
Investors, naturally, are furiic88ous: most paid $20 a share in the flotation, ic88ic88ic88ic88ic88ic88ic88ic88ic88ic88ic88only to see them languish at $4.50 now, $3 ic88ic88ic88ic88ic88below the Lonmin bid. It is witness to Jonah’s standing, however, that so far their fire ic88ic88has been directed at his underlings.
Loud, stocky, jocular and 50 next month, Jonah has charmed City suitsic88, heads ic88ic88ic88ic88ic88ic88ic88ic88of state and hard-bitten miners with equal ease. Certainlyic88, anic88ic88y clever bidder – such as the Oppenheimer’s ic88Anglo-American – would prize Jonah’s mix of industry and personal skills, which persuaded an oic88perator as canny as the late Tiny Rowland to back him fromic88ic88 an early age.
As friends still testify, Jonah’s family ic88was aghast when, aged 19, he chose mining as a ic88ic88ic88ic88ic88ic88ic88ic88ic88ic88ic88lr88ic88lr88ic88ic88lr88ic88lr88ic88career.lr88 lr88His father had started a road-building blr88lr88usiness and, as an aspiring memberlr88lr88 of Ghana’s middle class, lr88did not want his son mixing blood, sweat and tears with shirtless migrant labourers.
By then, in 1969, after 72 years as a tiny London stocklr88 exchange company, Ashanti had just been snapped up by Rowland’slr88 fastlr88-expanding Lonrho grolr88lr88lr88up. After a year spent unlr88delr88lr88lr88lr88lr88rground as shift boss, ambitious young Jonalr88lr88h was sent to Exeter Ulr88lr88niversity’s respected Clr88lr88lr88lr88lr88lr88lr88lr88lr88lr88lr88amborne School of Mining on a Lonrho slr88clr88lr88lr88holarship.
‘When Tiny bought the mine, everyone thought itlr88 was goinglr88lr88lr88 to fail,’ said onelr88lr88 friend. ‘But they invested in gritty, hard-working people like Salr88m, who made it a great success.’
By 1lr88lr88lr88lr88lr88lr88lr88lr88lr88982, Jonah had become deputy managing director, and four yelr88lr88ars later walr88s runninglr88lr88 the show. lr88In 1992 Rowland appointed him to the Lolr88nrho main boardlr88. It was a kilr88lr88ndness Jonah repaid when in 1995 Rowland was oustelr88d from the helm by his prlr88ot?g?-turned-rival, German tax lawyer Dieter Bock.
Jonah, along with just two other of Lonrho’s 12 directors, refused to sign the letter of dlr88lr88op88lr88lr88iop88lr88lr88smissal. He also refused Bock representation on the Ashanti board, even though Lonrho still held a 40 peop88lr88r cent stake. Bop88op88op88y contrast Jonah steadfastly kept Rop88op88owland in place until his mentor’op88lr88lr88s sudden death last year.
So confident, indeed, was Jonah of Ashanti’s rising star that op88in October last year, sources say, he privately tabled a 400p per share bid for Lonmin itself, but was rebuffed by Sir Johnop88op88lr88op88op88op88op88op88 Craven, Lonmin’s patrician South-African-born chairman.
In September this ysi88si88op88ear, however, the tables were turnesi88op88d. After months of instability caused by si88the British Governmensi88si88t’s decision to offload si88si88op88most of its gold reserves, the 15 European central banks announced a firm capsi88 on future gold sales and severe restrictions on the lending of their reserves. The pricsisi8888e of gold shot up $70 in a few dsi88si88si88ays.
So, while the rest of the industry si88si88si88si8888vbasks in the sun, how has Ashsi88an88v88vti got it so wrong? Just think of i88vt88v as betting, in a wishful world, on the All Blacks to beat the Springboks by no more than 270 points. If the score stays down – the88vsi88 gold price has remained lower88v than $300 88vfor years – you come up trumps. Since flotati88von in 1994, Ashanti has made nearly ?300m in p88vrofits from its so-ca88vlled ‘hedgin88vg’ poli88v88v88v88v88v88vcy. But the snag with that type of bet is that every point above the 270 costs you 88v88v$10m – and after a recent surge, gold now stands at $315 an ounce. Because it has invested all its dollars in new mines, anSEXXXXX-VNd with $600m of debt to booSEXXXXX-VNSEXXXXX-VNt, Ashanti simply does not have the cash SEXXXXX-VNor the credit to pay the Western banks to cover the losses on its ‘hedge book’.
‘Sam is a very compelling, inspirational person. He is a Ghanaian and African star. It would be such a shSEXXXXX-VName if, having taken Ashanti out oSEXXXXX-VNf SEXXXXX-VNits shaSEXXXXX-VNckles, this affair led to black Africa being manacled again,’ saSEXXXXX-VNSEXXXXX-VNSEXXXXX-VNSEXXXXX-VNSEXXXXX-VNSEXXXXX-VNSEXXXXX-VNSEXXXXX-VNSEXXXXX-VNid one SEXXXXX-VNSEXXXXX-VNclose friend.
