Motsepe Company Cleared in $195 Million Graphite Dispute

SOUTH AFRICA · MINING

The $195 million graphite dispute chasing Patrice Motsepe’s African Rainbow Capital has lost its legal footing: the company said Wednesday a Johannesburg High Court ruling — now final after the claimant dropped its appeal — leaves the Tanzanian claim without a basis.

What the graphite dispute is about

The fight traces back to a confidentiality agreement signed in 2019 between the American-based Pula Group and African Rainbow Minerals, the listed mining company Motsepe chairs. Pula shared technical data on its graphite project in southeastern Tanzania while courting an investment that never came.

Two years later, ARCH Sustainable Resources Fund — a vehicle linked to Motsepe’s African Rainbow Capital and managed by a UK adviser — took a cornerstone stake in Evolution Energy Minerals. Evolution owns Chilalo, a rival graphite project in the same corner of Tanzania.

Evolution, spun out of Marvel Gold, raised 22 million Australian dollars in that listing. The ARCH fund now owns about a quarter of the company and placed its own representative as chairman.

Pula says that share purchase was the breach: its data, it alleges, allowed the fund to buy into a direct competitor. It sued in the Tanzanian High Court in October 2023, naming African Rainbow Minerals, ARC, Motsepe personally and the fund’s Guernsey general partner.

The Johannesburg ruling

Because the agreement is governed by South African law, ARC asked the Johannesburg High Court to say how far it reaches. Judge Leicester Adams ruled in April that its obligations never extended to ARC, which was not a party, and that any contractual remedies lie against African Rainbow Minerals alone.

The court went further, granting orders that Pula had made out no cause of action for breach of contract against ARC in the Tanzanian proceedings. It also found Pula had no claim for contractual damages over a prospecting licence it later gave up.

Pula applied for leave to appeal in May, then abandoned the application. ARC said Wednesday that this makes the judgment final and binding, and that it has been advised the ruling leaves Pula without a legal basis for any of its Tanzanian claims.

A licence that vanished

A second problem sits under Pula’s case. The exploration right it told the Tanzanian court it held could not be renewed and had to be surrendered.

In August 2023, a newly incorporated company called Pula Carbon was granted a fresh right over the same ground. That company is party neither to the confidentiality agreement nor to the litigation.

What Pula says

Pula, led by Mary Stith and chaired by her father, former US ambassador Charles Stith, has publicly questioned how the matter moved through South African courts. It raised concerns in January about a late application by Motsepe-linked companies and in April about the speed of the ruling.

The ruling does not judge who behaved well in the original courtship. It decides only who signed what — and in contract law, that is usually the whole game.

Its damages claim is not dead yet. The Tanzanian High Court, where ARC argues the issues are res judicata — already decided — is expected to hand down judgment at the end of July, per Billionaires.Africa’s detailed report.

Why it matters

Graphite is the anode material in lithium-ion batteries, and Tanzanian deposits like Chilalo sit squarely in the global scramble for battery minerals. Cross-border fights over who owns the data, the licences and the deposits are becoming a feature of that race — the terrain The Rio Times maps in its Africa: The New Scramble pillar.

The asset itself has cooled: Evolution has cut costs and tilted towards gold, keeping Chilalo for the long term. The market for battery minerals runs in cycles, and Tanzanian graphite is currently in a trough.

Motsepe founded African Rainbow Capital in 2016 as a Black economic empowerment investor, and he chairs Harmony Gold alongside the executive chairmanship of African Rainbow Minerals. For the mining magnate, Sanlam deputy chairman and president of African football’s governing body, the ruling clears a $195 million cloud — pending one more judgment in Dar es Salaam.

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