Key Points
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ARC asks a South African court to limit a $195 million Tanzanian damages claim.
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Pula Group accuses Motsepe-linked firms of breaching a graphite project agreement.
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The ruling could shape future cross-border mining disputes in Africa.
A South African court has entered a three-year legal dispute between Tanzanian mining firm Pula Group and billionaire Patrice Motsepe. The case could influence how African courts handle cross-border mining disputes.
African Rainbow Capital, Motsepe’s investment firm, has asked the Gauteng High Court in Johannesburg to issue a declaratory ruling.
The company wants the court to limit the impact of a $195 million damages claim now before Tanzania’s High Court. Pula Group filed the Tanzanian case, accusing Motsepe-linked firms of breaching a confidentiality agreement tied to a proposed graphite project.
How the dispute began
Pula Group, chaired by former U.S. ambassador to Tanzania Charles Stith, sued African Rainbow Capital, African Rainbow Minerals, and U.S.-listed Arch Sustainable Resources in 2023.
The case centers on a 2019 confidentiality agreement linked to early talks on a graphite project. Pula argues those discussions exposed sensitive commercial information later used to its disadvantage. The mining licence for the project now belongs to Pula Graphite.
The dispute deepened in 2021. At that time, Arch invested in Australia-based Evolution Energy Minerals, which is developing a graphite project in Chilalo.
The site lies in the same region where Pula planned to operate. Pula says the investment weakened its position and caused major financial losses.
African Rainbow Capital rejects that account. It insists it never became bound by the confidentiality agreement and denies any wrongdoing.
ARC seeks Johannesburg ruling
In court filings this week, ARC lawyer Anthony Mundell argued that the agreement was signed in Johannesburg. As a result, he said South African courts have authority to rule on its legal effect.
Mundell told the Gauteng High Court that its intervention could limit or correct any adverse decision from Tanzania.
ARC wants the court to declare that Pula Graphite has no rights under the agreement, cannot claim damages under a contract it did not sign, and that ARC owes no obligations to Pula.
He warned that denying the request would expose ARC to enforcement action in Tanzania.
Pula pushes back on jurisdiction
The case has become more complicated because of procedural disputes in Tanzania. Default judgments could still be entered against Motsepe, African Rainbow Minerals, and Arch after they initially failed to file defenses.
Mundell maintains that none of the firms were parties to the agreement. He also argues that Tanzanian courts lack jurisdiction over them. Pula strongly disputes both claims.
In an affidavit, Pula Group President and Pula Graphite Partners Director Mary Stith said the Gauteng High Court has no authority over Pula or its Tanzanian subsidiary. She added that the South African court should not interfere with proceedings already under way in Tanzania.
However, she did not rule out a Tanzanian court applying South African law if it chooses to do so.
Motsepe rejects claims
Charles Stith has argued that Pula suffered heavy losses after rivals placed it at a competitive disadvantage. He has described the lawsuit as part of a wider debate over foreign participation in Tanzania’s mining sector.
Motsepe has dismissed the allegations. At African Rainbow Minerals’ annual general meeting, he described the claims as “absolute rubbish” and said his companies operate within the law and under strict governance rules.
High stakes for African mining disputes
Motsepe has vowed to fight the lawsuit, warning that it threatens the reputation of African Rainbow Minerals. Founded in 1997, ARM is one of South Africa’s largest diversified miners, with interests in gold, iron ore, platinum, manganese, and coal. Motsepe owns about 45 percent of the company and has an estimated net worth of $3.7 billion, according to Forbes.
ARC says ARM’s only contact with Pula came after Pula sought investment for the graphite project. ARM declined the proposal and communicated its decision at the time.
As courts in South Africa and Tanzania weigh competing claims of jurisdiction, the outcome could shape how future cross-border mining disputes are handled across Africa.
