African Rainbow Minerals (ARM) has come out strongly in defence of its investment in Evolution Energy Minerals in Tanzania and refuted allegations that it, and its associated companies, breached confidentiality and non-compete agreement with Pula Group by pursuing a rival project.

This comes as Tanzanian-based Pula Group has filed a $195 million (R3.4 billion) lawsuit alleging that ARM - which is owned by South African billionaire Patrice Motsepe - breached a non-compete agreement by investing in Evolution Energy Minerals, an Australian firm operating adjacent to Pula’s graphite project.

The lawsuit emanates from an alleged breach of contract in 2021, where the Motsepe associated companies invested in Evolution, a competing graphite mining project, adjacent to the Pula Graphite project whilst a confidentiality and non-compete agreement was allegedly in force.

The suit was filed against Motsepe and his associated companies - African Rainbow Capital (ARC), and ARCH Emerging Markets - for violating a non-compete agreement by investing in Evolution Energy Minerals, which has a project adjacent to Pula’s graphite project in the Ruangwa district in Tanzania.

Pula is applying for a default judgement against the companies that failed to appear before the court in December 2023 after the Motsepe associated companies argued that the Tanzanian court had no jurisdiction on the matter.

All parties involved in the matter will appear before Judge J. Gonzi of the Commercial Court of Tanzania to receive orders for the Pre-trial Conference and directions regarding Pula’s default application against Motsepe and his associated companies.

In response to Business Report yesterday, ARM said it 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.

An ARM spokesperson said the company concluded a Confidentiality Agreement with Pula but subsequently decided not to invest in the Pula Graphite Project and communicated its decision to Pula.

Read the full version of this article in tomorrow’s edition of Business Report.

BUSINESS REPORT