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A South African court is being drawn into a three-year legal fight between Tanzanian mining firm Pula Group and billionaire Patrice Motsepe, a case that is testing how cross-border mining disputes in Africa are handled and which courts have the final say.
At the center of the dispute is African Rainbow Capital, Motsepe’s investment firm, which has asked the Gauteng High Court in Johannesburg to issue a declaratory ruling that could limit the effect of a $195 million damages claim now before Tanzania’s High Court. The claim was filed by Pula Group, a U.S.-based company with mining interests across sub-Saharan Africa.
Pula claims financial losses from investment
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 company says the firms breached a 2019 confidentiality agreement tied to discussions over a proposed graphite project in Tanzania. The mining right for that project is now held by Pula Graphite.
The dispute dates back to 2021, when Arch invested in Australia-based Evolution Energy Minerals, which is developing a graphite project in Chilalo, the same region where Pula had planned its own operation. Pula argues that the investment weakened its position and led to financial losses. African Rainbow Capital disputes that account and says it was never bound by the confidentiality agreement cited in the case.
In court filings this week, ARC lawyer Anthony Mundell said the agreement was signed in Johannesburg and that South African courts have authority over rulings to be recognized in Tanzania. He argued that Gauteng High Court intervention could correct any unfair Tanzanian decision. ARC seeks a declaration that Pula Graphite has no rights under the agreement, cannot claim damages under a contract it did not sign, and that ARC has no obligations. Mundell warned that refusal would leave ARC exposed in Tanzania.
Pula rejects Gauteng court interference
The matter has been complicated by procedural disputes in Tanzania, where default judgments could be entered against Motsepe, ARM and Arch after they initially did not file defenses. Mundell maintains that none of the three were parties to the agreement and that Tanzanian courts lack jurisdiction over them. Pula strongly disagrees.
In her affidavit, Mary Stith, Pula Group President and Pula Graphite Partners Director, said the Gauteng High Court has no authority over Pula Group or Pula Graphite and should not interfere with proceedings already under way in Tanzania. She did not challenge the idea that South African law could be applied by a Tanzanian court.
Charles Stith has said Pula suffered serious losses after being put at a competitive disadvantage, describing the case as part of a wider debate over foreign participation in Tanzania’s mining industry. Motsepe has rejected the claims outright. Speaking at African Rainbow Minerals’ annual general meeting, he called the allegations “absolute rubbish” and said his companies operate within the law and maintain strong governance.
Pula proposal rejected, ARC says
Patrice Motsepe has vowed to fight the lawsuit, saying it threatens ARM’s reputation. 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 45 percent of ARM and boasts a net worth of $3.7 billion, according to Forbes. His broader investments are held through African Rainbow Capital.
ARC has said ARM’s only contact with Pula came after Pula approached it with a proposal to invest in the graphite project, an offer ARM declined and says it clearly communicated at the time. As courts in South Africa and Tanzania weigh competing jurisdiction claims, the ruling could shape how future cross-border mining disputes are resolved in Africa.
