What You Need to Know
A significant lawsuit in Tanzania’s graphite mining sector is set to resume in Dar es Salaam, involving Pula Group and African Rainbow Capital. The case centers on a $195 million dispute over a non-compete clause, with implications for the mining industry across Africa. The Tanzanian court is addressing jurisdiction issues raised by a recent South African ruling favoring ARC.
Africa-Press – Tanzania. A LANDMARK lawsuit involving two major players in the graphite mining sector, Pula and African Rainbow Capital (ARC), is set to resume in Dar es Salaam tomorrow, despite a recent ruling by a South African High Court in Johannesburg in favour of ARC.
The case, which has drawn significant attention world-wide, concerns a 195 million US dollars (about 508bn/-) dispute centred on the violation of a noncompete clause in a Confidentiality Agreement between two graphite mining projects in Tanzania.
It pits Pula Group and its Tanzanian subsidiary Pula Graphite Partners, in which Tanzanians have a 50 per cent stake, against South African mining magnate Patrice Motsepe and his affiliated companies, African Rainbow Minerals (ARM), African Rainbow Capital (ARC) and London-based investment firm ARCH.
Patrice Motsepe, ARM and ARCH did not appear in Court and are facing a default judgement.
The allegations are straightforward: Motsepe’s ARM signed a non-compete and confidentiality agreement with the Pula Group regarding a graphite project in Tanzania.
ARM received confidential geological data and subsequently channeled an investment through a sister company into a rival graphite project on adjacent to Pula’s project.
Last Tuesday, the High Court of Tanzania (Commercial Division), presided over by Judge Frank Mirindo, ordered both parties to submit expert witness statements by April 28 of this month to address the jurisdiction issue raised by the South Africa ruling. This paves the way for the main case to proceed.
The Tanzanian court has stated that the matter will be heard “post haste,” with proceedings expected to continue this week.
The expert witness statements will address the issue of whether Tanzania or South Africa has jurisdiction over mining assets in Tanzania due to a ruling in South Africa.
In late 2025, ARC filed an application for the South African courts to intervene.
the South African Court delivered an unusually speedy ruling in favour of ARC in April 14th.
ARC succeeded in obtaining an order from the Gauteng High Court in Johannesburg, declaring that Pula Group and its Tanzanian subsidiary are prevented from pursuing their lawsuit against ARC in Tanzania.
Judge Leicester Adams ruled that, to the extent Pula Group can prove a breach of agreement and resulting damages, its contractual remedies lie solely against ARM, one of Motsepe’s companies.
The Johannesburg court found that ARC had no contractual obligations under the agreement and could not be accused of breaching it.
The court also held that Pula Group had not established a valid contractual claim against ARC.
Senior Counsel Gasper Nyika, representing the South African defendants, presented the April 2026 judgment from a South African court.
This caused another delay in the trial as witnesses prepare statements on jurisdiction. The suit by Pula was originally filed in Tanzania in 2023.
The Defendants have presented numerous applications in the Tanzania Court, which were all heard and ruled upon clearing the way for the trial to held.
Senior Counsel Beatus Malima is at the helm of the Plaintiffs Legal Team.
Ambassador Charles R. Stith, a former US envoy to Tanzania, has repeatedly questioned the speed through which ARC’s applications through the South African Courts, starting with the edictal citation, that enabled the South African courts to deal with the case.
Stith cited that the initial hearing took only two minutes.
Despite the South African court initiative to insert itself it this ongoing case, Stith emphasised, “Justice delayed is not justice denied.”
Ambassador Stith further noted that the case between Pula PLC and African Rainbow Capital could set a precedent in the Tanzanian legal system, across Africa, and for the future of the mining industry on the continent.
The graphite mining sector in Tanzania has attracted international attention, particularly due to its rich mineral resources. The ongoing legal battle between Pula Group and African Rainbow Capital highlights the complexities of international mining agreements and the legal frameworks governing them. As mining activities expand in Africa, such cases may influence future regulations and investor confidence in the region’s mining landscape. The outcome of this lawsuit could set important precedents for similar disputes in the future.
