Motsepe faces $195m Tanzanian mining lawsuit

South African billionaire Patrice Motsepe and his associate companies are being sued for $195m in Tanzania. One of the biggest lawsuits in the country’s Commercial Court is set to resume today. Moneyweb reports that Tanzanian mining firm Pula Group is suing Motsepe and his associate companies – including African Rainbow Minerals, African Rainbow Capital and ARCH Emerging Markets – for allegedly breaching a non-compete contract when it invested in Australia’s Evolution Energy Minerals, located next to Pula’s graphite project, said the company chairman Charles Stith. ‘The amount was based on a third-party valuation of what Pula stands to lose as a result of the competitive disadvantage resulting from the Motsepe associated companies’ violation of a confidentiality and non-compete agreement,’ Stith said. Motsepe and associated companies have denied any breach and said there’s no merit to Pula’s allegations and claims. ‘ARM was considering investing in minerals that it had not mined in the past when the Pula graphite project was presented to it for its consideration,’ an ARM spokesperson said. Pula said a two-year non-compete contract had been in place, and that Motsepe's companies negotiated with and did the deal with the Australian company within that period. Stith, a former US ambassador to Tanzania, said the majority of exploration in Tanzania is done by Australian and Canadian companies, and that unfair and predatory practices of companies like ARM perpetuate the disparity in the mining sector, to the detriment of Tanzanians. ‘A similar dynamic existed across the continent of Africa, and the case is expected to set a legal precedent in protecting the rights of local mining and exploration companies competing against international counterparts in Tanzania,’ he said.