Paul Farrelly on the tribulations of Ghana's once-great goldmine chief

It would be a tragedy if Sam Jonah went down in history as Africa's answer to Peter Baring, the man who watched his inheritance disappear in a puff of fancy derivatives. Of course, the popular chief executive of Ghanaian gold mine Ashanti is neither blue-blooded nor hands-off like the scion of Britain's oldest banking family. He came up the hard way: from the gold face underground until, over three decades, he had established himself as one of the continent's most liked and respected businessmen.

But today Ashanti, once Africa's great black hope, stands on the brink of failing in similar fashion to Barings. There's no Nick Leeson, but there is a bagful of hard-to-fathom puts, calls, forwards and options 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 snapped up instead by Lonmin, the mining rump of Tiny Rowland's old Lonrho empire, from which it finally won independence five years ago, but which has now tabled an opportunistic ?500m bid. Or it may fall under the suffocating sway of the Oppenheimers, the omnipresent South African gold and diamond dynasty, which has long coveted the Ghanaian gem.

The irony is that, after years in the doldrums, Jonah's predicament has been prompted by a rising gold price. That is good for miners, but not for clever dicks who lay complicated wagers - as Ashanti has done - on the price staying low. The gold miner has turned gambler.

Last Wednesday, the affair claimed its first victim: Ghanaian Mining Minister and Ashanti board member Fred Ohene-Kena was sacked for peremptorily backing the Lonmin bid. This weekend - as 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 furious: most paid $20 a share in the flotation, only to see them languish at $4.50 now, $3 below the Lonmin bid. It is witness to Jonah's standing, however, that so far their fire has been directed at his underlings.

Loud, stocky, jocular and 50 next month, Jonah has charmed City suits, heads of state and hard-bitten miners with equal ease. Certainly, any clever bidder - such as the Oppenheimer's Anglo-American - would prize Jonah's mix of industry and personal skills, which persuaded an operator as canny as the late Tiny Rowland to back him from an early age.

As friends still testify, Jonah's family was aghast when, aged 19, he chose mining as a career. His father had started a road-building business and, as an aspiring member of Ghana's middle class, did not want his son mixing blood, sweat and tears with shirtless migrant labourers.

By then, in 1969, after 72 years as a tiny London stock exchange company, Ashanti had just been snapped up by Rowland's fast-expanding Lonrho group. After a year spent underground as shift boss, ambitious young Jonah was sent to Exeter University's respected Camborne School of Mining on a Lonrho scholarship.

'When Tiny bought the mine, everyone thought it was going to fail,' said one friend. 'But they invested in gritty, hard-working people like Sam, who made it a great success.'

By 1982, Jonah had become deputy managing director, and four years later was running the show. In 1992 Rowland appointed him to the Lonrho main board. It was a kindness Jonah repaid when in 1995 Rowland was ousted from the helm by his prot?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 dismissal. He also refused Bock representation on the Ashanti board, even though Lonrho still held a 40 per cent stake. By contrast Jonah steadfastly kept Rowland in place until his mentor's sudden death last year.

So confident, indeed, was Jonah of Ashanti's rising star that in October last year, sources say, he privately tabled a 400p per share bid for Lonmin itself, but was rebuffed by Sir John Craven, Lonmin's patrician South-African-born chairman.

In September this year, however, the tables were turned. After months of instability caused by the British Government's decision to offload most of its gold reserves, the 15 European central banks announced a firm cap on future gold sales and severe restrictions on the lending of their reserves. The price of gold shot up $70 in a few days.

So, while the rest of the industry basks in the sun, how has Ashanti got it so wrong? Just think of it 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 - the gold price has remained lower than $300 for years - you come up trumps. Since flotation in 1994, Ashanti has made nearly ?300m in profits from its so-called 'hedging' policy. But the snag with that type of bet is that every point above the 270 costs you $10m - and after a recent surge, gold now stands at $315 an ounce. Because it has invested all its dollars in new mines, and with $600m of debt to boot, Ashanti simply does not have the cash or 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 shame if, having taken Ashanti out of its shackles, this affair led to black Africa being manacled again,' said one close friend.

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 Subject: Sam Jonah Born: 19 November 1949 Job: Chief executive, Ashanti Goldfields Other Directorships: Lonmin, Commonwealth Africa Investment Fund, Labadi Beach Hotel (Ghana) Hobbies: Deep sea fishing, swimming, squash