Tanzanian Court Strikes Out $195m Pula Group Suit Against Motsepe-Linked Firms
A Tanzanian court has struck out a protracted lawsuit filed by Pula Group LLC against South African billionaire Patrice Motsepe and companies linked to him over a $195 million damages claim related to competing graphite mining interests in Tanzania.
African Rainbow Minerals Ltd (ARM), a company founded by Motsepe in 1997 as South Africa's first black-owned mining company, announced the ruling in a statement on Wednesday, saying the High Court delivered its decision on October 9. Motsepe, who listed ARM on the Johannesburg Stock Exchange in 2002, transitioned from executive chairperson to non-executive chairperson in February 2026.
ARM welcomed the judgment, stating that Pula's claim was unfounded and fabricated. The court's ruling marks a significant development in a legal battle that has unfolded across two jurisdictions over several years.
Origins of the Dispute
The conflict traces back to July 2019, when Pula Group and African Rainbow Minerals signed a confidentiality and non-compete agreement. Pula subsequently alleged that investments made by Motsepe-linked entities violated this agreement.
In 2021, ARCH Sustainable Resources Fund, an entity associated with Motsepe, invested approximately A$10 million in Australian-listed Evolution Energy Minerals for an initial stake of roughly 25 percent. Evolution owns and operates the Chilalo graphite project in Tanzania through the Kudu Graphite joint venture, holding 84 percent while the Tanzanian government maintains a 16 percent non-dilutable free-carried interest.
The Chilalo project, with an estimated mine life of 17 years and preproduction capital of $120 million, is located near Pula's own graphite operations in Tanzania. Evolution signed Framework and Shareholders Agreements with the Tanzanian government in April 2023 and commenced early site works in November 2024, targeting first ore mining by October 2027.
Court Ruling on Procedural Grounds
In a ruling dated August 7, Judge FM Mirindo struck the case off the court roll after determining that Pula had failed to join Evolution Energy Minerals and its Tanzanian subsidiary Ngwena Tanzania as necessary parties to the proceedings. The court did not determine whether the alleged breach of the confidentiality agreement occurred, nor did it award damages.
The case was struck off rather than dismissed, meaning Pula retains the option to refile with the correct parties named. Pula filed a notice of appeal on August 24 challenging the earlier decision.
Pula Group chairman Charles Stith, a former US Ambassador to Tanzania under President Bill Clinton, said the company had appealed the ruling and retained the option of refiling the suit. His daughter, Mary Mildred Stith, who holds a Ph.D. in natural resource management, serves as president of Pula Group.
We have appealed the earlier ruling on this case and beyond that we have the option to refile the suit. This is not over by a long shot.
Parallel Litigation in South Africa
The Tanzanian proceedings represent only one front in the legal battle. In July 2026, Pula abandoned its appeal in South Africa's high court, where a judge had previously ruled that no obligations under the confidentiality agreement extended to African Rainbow Capital, clearing Motsepe and ARC of liability in the R3.4 billion claim. Pula insisted this decision was not a retreat and focused efforts on the Tanzanian case.
Strategic Importance of Graphite
The high-stakes legal dispute reflects the growing strategic importance of graphite in global markets. Global graphite demand is projected to rise dramatically, with forecasts indicating increases of 310 percent to 500 percent over the next decade, driven primarily by electric vehicle battery manufacturing.
Each electric vehicle battery requires approximately 50 to 100 kilograms of graphite, making it one of the most volume-intensive materials in EV production. With no scalable substitute for lithium-ion battery anodes, demand has quadrupled in the past five years. The EV sector is projected to consume 5.4 million tonnes of graphite by 2030, with battery-related applications forecasted to represent 60 to 65 percent of total graphite demand by 2030-2040, up from 33 percent currently.
Tanzania is positioning itself as a major player in this expanding market. The country currently ranks sixth in global graphite production with annual output of about 25,000 tonnes from operational projects. With over 30 companies holding medium and large-scale graphite mining licenses, Tanzania is projected to produce over 300,000 tonnes of graphite annually within the next seven years. China currently dominates global production with 70 to 80 percent market share.
The October 9 ruling does not establish whether the alleged contractual breach occurred, leaving the substantive merits of Pula's allegations unresolved as the litigation may continue through appeals or refiling.
