Billionaire Patrice Motsepe's African Rainbow Capital clears major legal hurdle in $195 million graphite lawsuit

African Rainbow Capital (ARC), the investment company founded by South African billionaire Patrice Motsepe, has secured a major legal victory after the Johannesburg High Court ruled that it cannot be held liable for breaching a confidentiality agreement it never signed.

• African Rainbow Capital (ARC) won a legal victory in the Johannesburg High Court, which ruled it cannot be held liable for breaching a confidentiality agreement it never signed.
• The ruling weakens a $195 million damages claim from U.S.-based Pula Group over a disputed Tanzanian graphite project.
• The dispute originated from a 2019 confidentiality agreement between Pula Group and African Rainbow Minerals (ARM), not ARC.
• ARC was removed from liability as the court found any breach would only pertain to ARM, not ARC or its affiliates.

African Rainbow Capital (ARC), the investment company founded by South African billionaire Patrice Motsepe, has secured a major legal victory after the Johannesburg High Court ruled that it cannot be held liable for breaching a confidentiality agreement it never signed.

The ruling could significantly weaken a $195 million (3.2 billion rand) damages claim brought by U.S.-based Pula Group in Tanzania over a disputed graphite project, BillioniaresAfrica reported.

The case stems from a confidentiality agreement signed in 2019 between Pula Group and African Rainbow Minerals (ARM), the mining company chaired by Motsepe, during discussions over a potential investment in Pula's graphite project in southeastern Tanzania.

Pula claims it shared proprietary technical information that was later used by ARCH Sustainable Resources Fund—an ARC-linked investment vehicle—to back Australian-listed Evolution Energy Minerals, owner of the nearby Chilalo graphite project.

The company sued African Rainbow Minerals, ARC, Motsepe personally and other related entities in Tanzania in 2023, alleging the confidential information gave Evolution an unfair competitive advantage.

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South African court backs ARC

Because the confidentiality agreement is governed by South African law, ARC sought a declaratory judgment from the Johannesburg High Court.

The court ruled that ARC was never a party to the agreement and therefore could not be held liable for breaching it. Judge Leicester Adams also found that any contractual remedies, if a breach were established, would lie only against African Rainbow Minerals.

ARC said Pula later withdrew its application to appeal the judgment, making the ruling final.

Tanzanian lawsuit still pending

Despite the South African victory, the case remains before the Tanzanian High Court, where a ruling is expected later this month.

ARC argues the Johannesburg judgment effectively removes the legal basis for Pula's claims.

The dispute comes as graphite remains a critical mineral for electric vehicle batteries, although weaker market conditions have prompted Evolution Energy Minerals to diversify into gold exploration while retaining the Chilalo project.

For Motsepe, whose interests span mining, finance and sports, the ruling marks a significant legal win, though the outcome of the Tanzanian proceedings has yet to be determined.