Panthera Resources subsidiary files arbitration against India

Published at 21 May 2025

Indo Gold is claiming USD 1.58 billion in respect of a thwarted gold-mining project in Rajasthan.

Panthera Resources, the UK-based AIM-listed exploration and development company, has confirmed to the London Stock Exchange (LSE) that its Australian subsidiary, Indo Gold (IGPL), has filed a USD 1.58 billion arbitration claim against the Republic of India. The claim, submitted under the 1999 bilateral investment treaty (BIT) between India and Australia, pertains to the Bhukia gold project in Rajasthan.

THE BACKGROUND

The Bhukia project, located in the Banswara district of Rajasthan, is believed to hold substantial gold reserves. IGPL, in partnership with Indian company Metal Mining India, had applied for a prospecting licence (PL) over the Bhukia area. However, the application faced prolonged delays and was ultimately rejected by Indian authorities.

Panthera Resources, represented by King & Spalding, alleges that the rejection of the PL application, along with subsequent actions by Indian authorities, constitutes a breach of the BIT between India and Australia. Specifically, the company claims that India failed to provide fair and equitable treatment to its investment, expropriated its assets without adequate compensation, and denied justice in administrative and judicial proceedings.

THE CLAIM

The arbitration claim has been filed with the Permanent Court of Arbitration (PCA) under the rules of the United Nations Commission on International Trade Law (UNCITRAL), with funding to the value of USD 13.6 million provided by Litigation Capital Management. Following the filing, Mark Bolton, Panthera’s managing director, said in a statement: "We have made every effort to resolve this matter amicably over many years, but unfortunately, we have been left with no option but to pursue arbitration. We believe that the actions of the Indian authorities have caused significant harm to our investment, and we are committed to seeking full compensation through the arbitration process."

The company has long claimed that the Bhukia project has the potential to become one of the largest undeveloped gold projects in India, spanning approximately 940 hectares and estimated to contain 113.52 million tonnes of gold ore, equating to about 7.2 million ounces of gold, along with copper, nickel and cobalt resources. Panthera further contends that the project's development would have brought substantial economic benefits to the region, including employment opportunities and infrastructure development.

To complicate matters further, in June 2024 the Indian government held an auction for part of the project, with Saiyyed Owais Ali emerging as the highest bidder. The terms of the winning bid included an upfront payment of USD 60 million, an equivalent amount in performance guarantees, and a 65.3% mineral share for the Indian government. This auction took place despite the ongoing dispute.

A LITTLE BIT MORE

This arbitration case adds to the growing number of disputes between foreign investors and the Indian government under various bilateral investment treaties. In September 2020, Vodafone prevailed in a tax claim made under the India-Netherlands BIT and, just two months later, and in another claim based on a retrospective claim for tax, the PCA ruled in favour of Cairn Energy in proceedings brought under the India-United Kingdom BIT. A claim made in 2020 by the Mauritian company GPIX in the PCA under the India-Mauritius BIT in respect of a transportation project remains ongoing.

FINANCIAL IMPACT

Following the announcement of the arbitration claim, shares in Panthera Resources plummeted. Immediately after it had notified the LSE of the proceedings, the company's share price had fallen by 11.45% to GBP 0.1585; the decline has since continued, with the price dropping this morning to just GBP 0.1308, a likely reflection of investor concerns over the uncertainty surrounding the outcome of the dispute.