Editorial: Maple knights table TMX bid

The brief but doomed manoeuvre by the TMX Group to be taken over the London Stock Exchange is thankfully coming to an end.

• Nine of Canada’s financial heavyweights, including four banks and five pension funds, have ganged up under the name “Maple Group Acquisition Corp.” and tabled an unsolicited $3.6-billion bid for the TMX Group, topping by 25% the friendly but politically naïve offer by the LSE.

The most controversial part of the deal is Maple’s plan to combine TMX with the rival Alpha Group trading platform – which together provide platforms for four out of every five trades in Canada – and with CDS Inc., which clears those trades.

But given the nationalistic sentiment that is on the rise in Canada’s business and political class, these anti-competitive aspects of the bid will likely not be a serious obstacle to this made-in-Canada solution to the TMX quandary.

• The difficulty of working in Tanzania was underscored with news that seven people were killed at African Barrick’s North Mara gold mine in the country’s northeast. According to company and media reports, security personnel apparently fired tear gas and then bullets into a mob numbering 800 or more, and armed with machetes and hammers, which had stormed the operations to steal gold directly from the crusher.

The company said it had been the third attack in the past week, though the mine has had a history since its opening of heated and at times deadly disputes with locals and others trying to get access to ore in the pits and remnant gold in tailings. The mine was opened in 2003 by Placer Dome, and ended up in Barrick Gold’s hands in 2006 via its hostile takeover of Placer.

Last October, African Barrick suspended 60 workers at its Buzwagi gold mine in Tanzania’s Lake Victoria gold district for their involvement in a fuel-theft scheme overseen by a criminal gang. The resulting shortage of workers caused the mine to cut 2010 production forecasts by 30,000 oz. gold.

It looks like Barrick Gold’s corporate strategy of jettisoning its problematic African gold assets into its 74%-owned African Barrick subsidiary, which now trades in London, has been successful in neutralizing the effect of bad news on the share price of the parent company. In the two days following news of the killings, African Barrick’s shares fell 6.6% and ranked as one of the worst-performing stocks in London, while Barrick Gold’s shares were up a penny. Barrick Gold’s market cap is $44 billion, while African Barrick’s is just $2 billion.

Anecdotally, the working and living conditions for miners and ex-pats in Tanzania seems to have deteriorated substantially over the past decade as the dirt-poor country grapples with the spectacular growth in its mining industry, and resentments build.

• The pampered, Eurocentric elite running the International Monetary Fund is famous for its at-times harsh orders to Third World governments to embrace brutal austerity measures and goad their populations into metaphorically bending over and grabbing their ankles. Now, the head of the agency is alleged to have enthusiastically taken the same ethos into his private life.

In New York City, Dominique Strauss-Kahn, the IMF’s managing director since 2007, was pulled out of the first-class section of an Air France jet preparing to return to Paris and charged with sexual assault, forcible confinement, and attempted rape of a maid who was cleaning his $3,000-a-night hotel room. Judged a flight risk, Strauss-Kahn was refused bail and remanded to jail.

Prosecutors allege he appeared nude in front of the maid – a widowed, single mother in her 30s, and fairly recent asylum-seeker from poverty-stricken Guinea – and then ran after her and forced her to submit to oral and anal sex before she wrested herself free and fled.

Strauss-Kahn had been touted as a leading candidate for France’s Socialist party in the presidential election next spring, when he would have taken on and likely beaten unpopular incumbent Nicolas Sarkozy. French socialists have complained loudly of Strauss-Kahn’s recent treatment in America, including being photographed in handcuffs.

At presstime, four days after the arrest, Strauss-Kahn has not resigned his prestigious IMF post, and more hints at a very troubled history with women are emerging.

Global miners regularly deal with the IMF’s closely connected sister organization, the World Bank, which often provides loans for mine construction in Third World countries, especially through the International Finance Corp.