Patrice Motsepe, founder and Chairman of African Rainbow Minerals in hot waters after a massive lawsuit was filed by Tanzanian mining company.
The Tanzanian mining company Pula Group is suing Dr. Motsepe and his associated companies, including ARM, ARC, and ARCH Emerging Markets for a massive $195 million (R3.4 billion), thus marking it as one of the biggest lawsuits to ever been heard in the country’s court.
Allegations emerged when the company’s Chairman, Charles Stith claimed that Dr Patrice Motsepe and company has breached a non-compete contract when it pursued investments in Australia’s Evolution Energy Minerals which is located near Pula’s graphite project.
“The 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’ violation of a confidentiality and non-compete agreement,” Stint said.
In contrast, Motsepe and associated companied have denied the allegations of any breach, claiming Pula’s allegations have no Merit.
Furthermore, AMR spokesperson said that ARM was indeed considering investing in minerals it has never mined in the past, when Pula’s graphite project was presented to it for considerations. However, AMR contracted and agreed to a confidentiality agreement with Pula, thus decided not to invest in the project and was transparent with Pula about their business decision.
The matter will be taken further to court since the company declined to comment further about this matter before court.
Stith was verbal about this matter, seeking justice for those who’s been done wrong due to unfair and predatory practices by companies like AMR, that perpetuate the disparity in the mining sector. He further said that the company was trying to deal with the case for quite some time, but had to deal with back-and-forth’s with companies Dr Motsepe is associated with. Additionally, he claimed that they weren’t properly served or there was some kind of lack of jurisdiction in Tanzania.
“A 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,” he said.
