Billionaire Patrice Motsepe’s mining company sued by partner

African Rainbow Minerals Ltd., the mining group founded by South African billionaire Patrice Motsepe, is being sued by its longtime partner Assore Ltd. in a fight over who gets to run Assmang, the iron ore and manganese producer the two companies own equally.

Assore has started legal proceedings against ARM and Assmang that challenge ARM’s right to appoint executives at the joint venture and to manage its operations, ARM said in a statement to the Johannesburg Stock Exchange. Neither company holds a majority, as each controls 50% of Assmang’s voting rights.

ARM rejected the claims. “Based on legal advice received, ARM believes that Assore’s claims and allegations have no substantive merit,” the company said, adding that it would defend the case and bring its own proceedings against Assore. It said it would keep managing Assmang “in accordance with its contractual rights and obligations.”

The details of Assore’s claims, the court where the case was filed and any amount in dispute have not been made public. Billionaires.Africa could not find a public statement from Assore, which is privately held.

Dividend talks continue

ARM said the dispute does not concern the size or timing of Assmang’s dividend and that talks with Assore on a final dividend are continuing. Representatives of the two companies are still meeting to discuss Assmang’s operations, it said.

That matters to both owners. Assmang is one of South Africa’s biggest producers of iron ore and manganese, the raw materials for steel. It runs the Khumani and Beeshoek iron ore mines in the Northern Cape, which export through Saldanha Bay, and the Black Rock manganese complex, made up of the Gloria and Nchwaning mines near Kuruman. It also owns the Cato Ridge ferromanganese smelter in KwaZulu-Natal. ARM holds its half through its wholly owned unit ARM Ferrous, and the iron ore and manganese businesses have long been among its biggest sources of earnings and dividends.

Two mining families

The case pits Motsepe against one of South Africa’s oldest mining families. Assore, which was listed in Johannesburg from 1950 until it went private in 2020, is controlled by the Sacco family through Oresteel Investments, a holding company it owns jointly with Japan’s Sumitomo Corp. Desmond Sacco has led Assore for decades, and the company and ARM have been partners in Assmang since the 2000s.

The lawsuit adds to a difficult year for ARM. Its shares were down about 17% for the year by mid-July, according to Nairametrics, and the company’s market value now stands at about 30.85 billion rand, or $1.85 billion, according to BusinessTech.

Motsepe’s fortune

Motsepe, 64, founded ARM after buying underperforming gold mine shafts from AngloGold in 1997 and built it into a diversified miner with interests in iron ore, manganese, chrome, platinum group metals, nickel, coal and gold. He joined the Forbes billionaires list in 2008.

He stepped down as ARM’s executive chairman in February after a change in JSE listing rules separated the roles of board chair and executive director, and he remains non-executive chairman. ARM accounts for most of his wealth. Forbes valued his fortune at $3.5 billion in July, down from $4.3 billion at the start of the year.

Motsepe is also president of the Confederation of African Football, owner of the Mamelodi Sundowns soccer club and founder of the investment group African Rainbow Capital. He said this month that his current term as CAF president would be his last.