Table of Contents
Key Points
- ARC contests Pula Group’s $193.7 million claim over a Tanzanian graphite project, seeking relief in Johannesburg’s High Court.
- The dispute centers on alleged breaches of non-compete and confidentiality terms tied to a 2019 graphite mining deal in Tanzania.
- ARC argues the project’s value is far lower, challenging Tanzanian court jurisdiction and pushing for South African legal authority.
African Rainbow Capital Investments (ARC Investments), the investment firm led by South African billionaire Patrice Motsepe, has taken its fight against a R3.4 billion ($193.7 million) lawsuit to Johannesburg’s High Court over a contested graphite mining deal in Tanzania.
The case, brought by Tanzania’s Pula Graphite Partners and its parent company, Pula Group, stems from allegations that ARC and affiliated companies breached a 2019 confidentiality agreement tied to a graphite project in the Ruangwa District, over alleged breaches of non-disclosure and non-compete agreements.
ARC seeks declaratory relief in Johannesburg
The US-linked Pula Group, led by Mary Stith, daughter of former US Ambassador Charles Stith, claims that Motsepe’s entities violated the non-compete terms by investing in Evolution Energy Minerals, which operates the Chilalo graphite project in Tanzania’s Ruangwa District.
Pula owns 50 percent of Pula Graphite, a competing venture in the same region. Proceedings began in Tanzania in 2023, but ARC and its affiliates argued they were improperly served. Only ARC defended the matter, with other parties facing default judgments after failed appeals in 2024.
ARC’s June 2025 application to the South African court seeks a ruling that neither ARC nor Pula Graphite was bound by the original agreement between African Rainbow Minerals (ARM) and Pula Group. The company also wants confirmation that any disputes must be decided under South African law, as specified in the contract.
Disputed damages and jurisdiction challenge
ARC contests Pula’s damage claim, arguing the graphite project’s real value is closer to $105 million, far below the amount sought. The firm also maintains that the Tanzanian court has no jurisdiction to compel ARC’s participation in proceedings involving entities outside the original agreement.
The Johannesburg High Court granted ARC’s request for edictal citation in June, giving foreign respondents roughly one month to reply. A decision on the merits has yet to be made, but ARC believes a South African ruling will be decisive in resolving the cross-border dispute.
ARC’s growth and the high stakes in African mining
Founded in 2015 as a subsidiary of Ubuntu-Botho Investments — the vehicle Patrice Motsepe created in 2004 to expand Black-controlled capital in South Africa — African Rainbow Capital (ARC) has broadened its investment portfolio. The firm reported a 4.1 percent rise in net asset value to R19.39 billion ($1.04 billion) for the six months ended December 2024.
The current lawsuit highlights the inherent risks of cross-border mining ventures in Africa, where overlapping jurisdictions, contested mineral rights, and rival projects can escalate into multi-million-dollar legal battles. ARC’s latest move in the Johannesburg High Court is not only about protecting its commercial interests — it also serves as a high-profile test of South Africa’s legal reach in settling disputes with significant regional and international implications.
