South African billionaire Patrice Motsepe and his associate companies are being sued for $195 million (R3.4 billion) in Tanzania, with one of the biggest suits to appear in front of the country\u2019s commercial court set to resume on Monday (4 November).<\/p>\n\n\n\n
Tanzanian mining firm Pula Group is suing Motsepe and his associate companies\u2014including African Rainbow Minerals, African Rainbow Capital and ARCH Emerging Markets\u2014for allegedly breaching a non-compete contract when it invested in Australia\u2019s Evolution Energy Minerals, located next to Pula\u2019s graphite project, said the company chairman Charles Stith.<\/p>\n\n\n\n
\u201cThe amount was based on a third-party valuation of what Pula stands to lose as a result of the competitive disadvantage resulting from the Motsepe associated companies\u2019 violation of a confidentiality and non-compete agreement,\u201d Stith said in an interview.<\/p>\n\n\n\n
Motsepe and associated companies have denied any breach and said Pula\u2019s allegations and claims have no merit.<\/p>\n\n\n\n
\u201cARM was considering investing in minerals that it had not mined in the past when the Pula graphite project was presented to it for its consideration\u201d, an ARM spokesperson said. <\/p>\n\n\n\n
\u201cARM concluded a confidentiality agreement with Pula and subsequently decided not to invest in the project and communicated the decision to Pula.\u201d<\/p>\n\n\n\n
The company declined to comment further on the matter now before the court.<\/p>\n\n\n\n
Pula said a two-year non-compete contract had been in place and that Motsepe companies talked to and made the deal with the Australian company within that period.<\/p>\n\n\n\n
Stith, a former US ambassador to Tanzania, said the majority of exploration in Tanzania is done by Australian and Canadian companies and that unfair and predatory practices of companies like ARM perpetuate the disparity in the mining sector to the detriment of Tanzanians.<\/p>\n\n\n\n
\u201cA similar dynamic existed across the continent of Africa, and 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,\u201d he said.<\/p>\n\n\n\n
Pula has been trying to get the case off the ground with some back-and-forth from the Motsepe group of companies, which claimed they weren\u2019t properly served or that Tanzania doesn\u2019t have jurisdiction, Stith said. In some instances, ARM\u2019s legal team has failed to appear in court, he added.<\/p>\n\n\n\n