Tanzania: South African Billionaire Motsepe Faces $195m Lawsuit in Tanzania

TLDR

Tanzanian mining firm Pula Group sues South African billionaire Patrice Motsepe and his companies for $195 million in Tanzania’s commercial court. Allegations claim that Motsepe’s entities breached a non-compete contract by investing in Australian company Evolution Energy Minerals near Pula’s graphite project. ARM denies the claims, asserting they considered but declined investment in Pula’s project, maintaining compliance with confidentiality obligations.

South African billionaire Patrice Motsepe and his associated companies, including African Rainbow Minerals (ARM) and African Rainbow Capital, face a $195 million lawsuit in Tanzania’s commercial court.

Tanzanian mining firm Pula Group is suing Motsepe’s entities, alleging they breached a non-compete contract by investing in Evolution Energy Minerals, an Australian company operating near Pula’s graphite project. Pula claims this breach resulted in significant losses, citing a third-party valuation.

ARM, however, denies the allegations, stating that it considered but ultimately declined investment in Pula’s project, notifying the company accordingly. ARM maintains that it complied with confidentiality obligations, disputing any agreement violation.

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Key Takeaways

This high-profile case underscores the competitive tensions in Tanzania’s mining sector, where foreign companies often dominate exploration. Pula’s chairman, Charles Stith, a former U.S. ambassador to Tanzania, argues that the case highlights unfair practices disadvantaging local firms. As the lawsuit unfolds, it could set a precedent for protecting Tanzanian companies’ rights against larger, foreign-backed competitors. ARM has disputed Tanzania’s jurisdiction and has sometimes missed court appearances, signaling a potentially lengthy legal battle.

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