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South African billionaire Patrice Motsepe and his associate companies are being sued for $195 million (R3.4 billion) in Tanzania, with one of the biggest suits to appear in front of the country’s commercial court set to resume on Monday.

Tanzanian mining firm Pula Group is suing Motsepe and his associate companies — including African Rainbow Minerals, African Rainbow Capital and ARCH Emerging Markets — for allegedly breaching a non-compete contract when it invested in Australia’s Evolution Energy Minerals, located next to Pula’s graphite project, said the company chairman Charles Stith.

"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," Stith said in an interview.

Motsepe and associated companies have denied any breach and said there’s no merit to Pula’s allegations and claims.

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

The company declined to comment further with the matter now before the court.

Pula said a two-year non-compete contract had been in place, and that Motsepe companies talked to and did the deal with the Australian company within that period.

Stith, a former US ambassador to Tanzania, said the majority of exploration in Tanzania is done by Australian and Canadian companies, and that unfair and predatory practices of companies like ARM perpetuate the disparity in the mining sector, to the detriment of Tanzanians.

"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," he said.

Pula has been trying to get the case off the ground with some back-and-forth from the Motsepe group of companies, which claimed they weren’t properly served or that Tanzania doesn’t have jurisdiction, Stith said. In some instances, ARM’s legal team has failed to appear in court, he added.

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