CAF president Patrice Motsepe faces $195 million lawsuit in Tanzania for alleged mining breach

Patrice Motsepe faces a $195 million lawsuit in Tanzania where his companies are accused of breaching a mining non-compete agreement.

The Confederation of African Football (CAF) president Patrice Motsepe is embroiled in a high-stakes lawsuit in Tanzania where he and his associate companies are being sued for $195 million by the Tanzanian mining firm Pula Group.

This case, one of the largest to appear before Tanzania’s commercial court, is set to resume Monday as it heads to a highly anticipated hearing.

Pula Group alleges that Motsepe’s companies — including African Rainbow Minerals (ARM), African Rainbow Capital and ARCH Emerging Markets — violated a non-compete agreement by investing in Australia’s Evolution Energy Minerals, a mining firm with operations adjacent to Pula’s graphite project.

"The amount was based on a third-party valuation of what Pula stands to lose as a result of the competitive disadvantage resulting from the Motsepe associated companies’ violation of a confidentiality and non-compete agreement," explained Pula chairman Charles Stith as per Bloomberg.

Motsepe’s representatives have denied the claims, stating that ARM, the mining subsidiary of Motsepe’s empire, had entered a confidentiality agreement with Pula but ultimately chose not to invest in the Tanzanian graphite project.

“ARM 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, emphasizing that ARM had no intention of breaching any agreement.

“ARM concluded a confidentiality agreement with Pula and subsequently decided not to invest in the project, and communicated the decision to Pula.”

The legal battle not only affects Motsepe’s mining ventures but could also have repercussions on his position within the African sports community, where he is widely respected as CAF president.

His leadership of CAF, a role he assumed in 2021, has focused on transforming African football and enhancing the continent’s global competitiveness.

However, the lawsuit brings a level of scrutiny to his business operations that may impact his broader reputation on the African stage, where mining interests and sports often intersect.

Pula Group claims that Motsepe’s companies moved forward with an investment deal with Evolution Energy Minerals, a potential competitor, within a two-year non-compete window, which the Tanzanian company argues is a direct breach of their agreement.

Stith, a former U.S. ambassador to Tanzania and Pula chairman, contends that ARM’s actions reflect broader patterns of disadvantageous practices by international firms against African-based companies.

“A similar dynamic existed across the continent of Africa, and the case is expected to set a legal precedent in protecting the rights of local mining and exploration companies competing against international counterparts in Tanzania,” Stith said.

He argued that Australian and Canadian companies dominate exploration in Tanzania, often at the expense of local businesses, which face challenges in competing with larger, better-resourced international entities.

The lawsuit has already seen delays, as Motsepe’s legal representatives have challenged the validity of the service process and questioned the Tanzanian court’s jurisdiction.

In some instances, ARM’s legal team reportedly failed to appear in court, further drawing out proceedings.

According to Stith, these tactics underscore the resistance faced by African companies when pursuing claims against powerful international corporations.

Motsepe’s influence in African business and sports circles has earned him admiration across the continent, with his CAF presidency viewed as an opportunity to elevate African football.

Yet, the lawsuit threatens to cast a shadow on his corporate legacy, particularly as he advocates for transparency and fair play in African football.

With this lawsuit positioned to potentially set a landmark precedent for Tanzanian and African businesses, Motsepe’s involvement has drawn considerable attention, both in the business and sports sectors.

The case has implications for CAF’s leadership, as Motsepe’s reputation could be at stake if the lawsuit does not swing in his favor.

His dual roles as a mining mogul and sports executive reflect the diverse portfolio he commands but also the complex balance of upholding business commitments while leading a premier African sports organization.