A South African court has become the latest battleground in a protracted legal dispute between Tanzanian mining firm Pula Group and companies linked to billionaire Patrice Motsepe, a case that could set an important precedent for how cross-border mining conflicts in Africa are resolved and which jurisdictions ultimately carry authority.
At the centre of the three-year legal fight is African Rainbow Capital (ARC), Motsepe’s investment holding company, which has applied to the Gauteng High Court in Johannesburg for a declaratory order that would limit or potentially neutralise the impact of a $195 million damages claim currently before the High Court of Tanzania. The Tanzanian lawsuit was brought by Pula Group, a U.S.-based mining company with interests across sub-Saharan Africa.
Pula Group, chaired by former United States ambassador to Tanzania Charles Stith, filed suit in 2023 against African Rainbow Capital, African Rainbow Minerals (ARM), and U.S.-listed Arch Sustainable Resources. The company alleges that the defendants breached a 2019 confidentiality agreement related to discussions over a proposed graphite project in Tanzania. The mining licence for that project is now held by Pula Graphite, an affiliate of Pula Group.
The dispute traces its origins to events in 2021, when Arch Sustainable Resources invested in Australia-based Evolution Energy Minerals, which is developing a graphite project in Chilalo— the same region where Pula had been planning its own graphite operation. Pula contends that the investment undermined its competitive position and caused significant financial losses. Motsepe’s companies reject this narrative, maintaining that they were never bound by the confidentiality agreement cited by Pula and therefore bear no legal responsibility.
In court papers filed this week, ARC’s legal counsel, Anthony Mundell, argued that the confidentiality agreement was signed in Johannesburg and that South African courts have jurisdiction over how any rulings arising from it should be interpreted or recognised, including in Tanzania. Mundell told the Gauteng High Court that its intervention was necessary to prevent what ARC considers the risk of an unfair or improperly grounded judgment in Tanzania.
ARC is seeking a declaration that Pula Graphite has no enforceable rights under the 2019 agreement, cannot claim damages under a contract it did not sign, and that African Rainbow Capital has no obligations under the agreement. Mundell warned that if the South African court declines to intervene, ARC could be unfairly exposed to enforcement proceedings in Tanzania despite disputing the court’s jurisdiction.
The case has been further complicated by procedural developments in Tanzania, where default judgments could potentially be entered against Motsepe, ARM and Arch after they initially failed to file formal defences. ARC maintains that none of the defendants were parties to the agreement in question and argues that Tanzanian courts lack jurisdiction over them. Pula Group strongly contests that position.
In a sworn affidavit, Pula Group President and Pula Graphite Partners Director Mary Stith said the Gauteng High Court has no authority over either Pula Group or Pula Graphite and should not interfere in legal proceedings already under way in Tanzania. While she did not dispute that South African law could be applied by a Tanzanian court if appropriate, she insisted that jurisdiction rests firmly in Tanzania.
Charles Stith has previously said Pula suffered substantial financial harm after being placed at a competitive disadvantage, framing the dispute as part of a broader debate over the treatment of foreign investors in Tanzania’s mining sector. Motsepe, however, has categorically rejected the allegations. Speaking at African Rainbow Minerals’ annual general meeting, he dismissed the claims as “absolute rubbish,” insisting that his companies operate within the law and adhere to strong corporate governance standards.
African Rainbow Capital has also stated that ARM’s only interaction with Pula occurred after Pula approached the company seeking investment in the graphite project, an offer ARM says it declined and clearly communicated at the time. Motsepe has vowed to vigorously defend the case, warning that it poses reputational risks to ARM, one of South Africa’s largest diversified mining groups.
Founded in 1997, African Rainbow Minerals has grown into a major force in the mining industry, with interests spanning gold, iron ore, platinum, manganese and coal. Motsepe owns 45 percent of ARM and has an estimated net worth of $3.7 billion, according to Forbes, with his wider portfolio held through African Rainbow Capital.
As courts in both South Africa and Tanzania weigh competing claims over jurisdiction and liability, the outcome of the case is being closely watched by investors and mining companies across the continent. Legal analysts say the ruling could help define how future cross-border mining disputes in Africa are handled, particularly in cases involving confidentiality agreements, overlapping jurisdictions and multinational investment structures.
