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| Motsepe in 2009 Image Wikipedia |
South African billionaire Patrice Motsepe and several of his affiliated companies are embroiled in a high-stakes legal battle in Tanzania, where they are being sued for $195 million (approximately R3.4 billion) by local mining company Pula Group. The lawsuit, one of the largest to appear before Tanzania's commercial court, is set to resume on Monday, 4 November.
Pula Group claims that Motsepe’s companies—African Rainbow Minerals (ARM), African Rainbow Capital, and ARCH Emerging Markets—violated a non-compete agreement by investing in Australia’s Evolution Energy Minerals, which operates a graphite project adjacent to Pula’s in Tanzania. Charles Stith, chairman of Pula Group, stated that the lawsuit is based on a third-party valuation of potential losses Pula may incur from this alleged breach, which he claims creates a competitive disadvantage for the Tanzanian firm.
Motsepe and his associates have denied any wrongdoing, with ARM stating that they had explored potential investment in Pula’s graphite project under a confidentiality agreement but ultimately decided against pursuing it, communicating this to Pula. ARM spokespersons assert that Pula’s claims lack substance and that there was no breach of contract.
According to Pula, the non-compete agreement was to remain in effect for two years, during which time Motsepe’s companies allegedly engaged with the Australian company, breaching the terms. Stith, a former U.S. ambassador to Tanzania, highlighted that a majority of exploration in Tanzania is led by international companies, particularly from Australia and Canada, and stated that this case could set a precedent for protecting the rights of local companies against such international competition.
Pula Group has faced procedural challenges in advancing the case, including disputes over proper service of documents and questions of jurisdiction raised by the Motsepe group of companies. Stith also noted instances where ARM’s legal team did not appear in court.
With Motsepe's companies maintaining that the allegations are unfounded, the case has garnered attention as it may influence future legal standards for local companies competing against international players within Tanzania’s mining sector.
