Motsepe pushes back against Tanzania’s $195m lawsuit

African Rainbow Minerals (ARM) executive chair Patrice Motsepe on Friday pushed back against a $195m lawsuit brought against the company for allegedly breaching a non-compete agreement related to graphite projects in Tanzania. During ARM’s AGM, Motsepe described the lawsuit as ‘absolute nonsense’ and said he would pursue the matter to ‘the highest court in Tanzania or any other court outside’.  Fin24 reports that Tanzanian mining firm Pula Group is suing Motsepe and his associate companies – ARM, African Rainbow Capital, and Arch Emerging Markets Partners (AEMP) – for allegedly breaching a non-compete contract when AEMP invested in Australia's Evolution Energy Minerals. According to Pula, it and ARM signed a two-year agreement in July 2019 under a confidentiality and non-disclosure agreement, in terms of which ‘the Motsepe-associated companies had unfettered access to commercially sensitive information’. But then in 2021 – when this was in force – AEMP invested in Evolution, a competing graphite mining project adjacent to Pula's project in southeast Tanzania.

Pula has said previously that 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. Pula maintains that, except for AEMP, the Motsepe-associated companies ‘flagrantly disregarded’ an order to appear before the Tanzania Commercial Court, according to Fin24. During the AGM, the group was questioned on why its directors ‘failed to turn up to court’, with an application for a default judgment apparently set to be heard in February. They were also asked whether or not it was proper not to raise a provision for the claim. ‘Listen, I've seen many far-fetched, and I would even say desperate legal proceedings, and in my mind, this Pula matter is one of the most baseless and far-fetched actions I've ever seen,’ Motsepe said. ‘We've got some of the best lawyers in this country who are representing us in this matter. And the lawyers were absolutely clear that the filing, the service of the documentation was improper.’ With regards to the provision, chairperson of ARM's Audit and Risk Committee, Tom Boardman, said that the matter was immediately disclosed and had been subject to numerous discussions.