South African billionaire Patrice Motsepe sees $195 million lawsuit struck out in Tanzania

A Tanzanian court has struck out a $195 million lawsuit brought by U.S.-based Pula Group LLC against South African billionaire Patrice Motsepe and three companies linked to him, the second time in two months that the claim has been thrown out.

The High Court of Tanzania ruled on Oct. 9, African Rainbow Minerals Ltd., the mining company Motsepe founded, said in a statement on Wednesday. The claim was worth about 3.2 billion rand at current exchange rates, Bloomberg reported.

"ARM welcomes the judgment," the company said. "ARM has always viewed the Pula claim to be unfounded and fabricated."

The grounds for the Oct. 9 ruling were not immediately available. Billionaires.Africa could not find a public response from Pula. ARM's shares rose 1.2% to 149.51 rand in Johannesburg trading on Wednesday.

A fight over graphite

Pula and its Tanzanian unit sued Motsepe, African Rainbow Minerals, African Rainbow Capital Investments Ltd. and ARCH Sustainable Resources GPCO Ltd. in 2023. The company alleges they breached a confidentiality and non-compete agreement by investing in Australia's Evolution Energy Minerals Ltd., whose Chilalo graphite project in Tanzania's Lindi region sits next to Pula's own graphite project.

Pula says it shared information about its project with African Rainbow Minerals in 2019 while the miner was considering an investment that never went ahead. It argues that the agreement it signed at the time barred the Motsepe companies from backing a competing project. The $195 million figure comes from a valuation of Pula's losses by Bowline Professional Services. Pula is chaired by Charles Stith, a former U.S. ambassador to Tanzania.

Motsepe and his companies have denied the claims throughout.

Earlier setbacks for Pula

The case was first struck off the roll in August, when Judge F.M. Mirindo ruled that Pula had failed to join Evolution and its related companies as parties to the proceedings. That ruling did not decide whether the agreement had been breached and awarded no damages. Pula filed a notice of appeal against the whole decision on Aug. 24, and Stith said at the time that the company could also refile the case.

Pula has also lost in South Africa. In April, Judge Leicester Adams of the Gauteng High Court in Johannesburg ruled that African Rainbow Capital was not a party to the 2019 non-disclosure agreement, which was signed with African Rainbow Minerals, so any contractual claim lay only against the miner. Pula won leave to appeal in May but abandoned the appeal in July, which made that judgment final.

Motsepe's mining fortune

Motsepe, 64, built African Rainbow Minerals after buying underperforming gold shafts in 1997 and turned it into a diversified miner with interests in iron ore, manganese, platinum group metals, chrome, nickel, coal and gold. In 2008 he became the first Black African to appear on the Forbes billionaires list. Forbes valued his fortune at $3.5 billion in July.

He is also president of the Confederation of African Football, owner of the Mamelodi Sundowns soccer club and founder of the investment group African Rainbow Capital.

The ruling comes as African Rainbow Minerals fights a separate legal battle at home. Assore Ltd., its equal partner in iron ore and manganese producer Assmang, has sued the company over its right to appoint executives and manage the joint venture's operations. ARM has said those claims have no substantive merit.