Panthera Resources files $1.6bn arbitration claim against India over Bhukia gold project

Why Is Panthera Resources Suing the Indian Government for US$1.58 Billion?

Panthera Resources Plc, a gold exploration and development company listed on the AIM Market of the London Stock Exchange, has formally escalated its arbitration proceedings against India. Through its Australian subsidiary, Indo Gold Pty Ltd (IGPL), the company has filed a comprehensive Statement of Claim with the arbitration tribunal, seeking damages totalling US$1.58 billion. This claim, net of Indian taxes, centres on alleged violations by India of the bilateral investment treaty (BIT) signed in 1999 between India and Australia. The dispute relates to the Bhukia gold project located in the mineral-rich Banswara district of Rajasthan.

Panthera alleges that India, through a series of regulatory and administrative actions—culminating in the auctioning of the disputed project area to a third party—effectively expropriated IGPL’s investment and thereby breached the investment treaty, particularly Articles 3 and 7, which pertain to fair treatment and protection against expropriation.

What Led to the Arbitration Over the Bhukia Gold Project?

The Bhukia gold project has been central to Panthera Resources’ long-standing ambitions in India’s mining sector. The initial investment dates back to 2004 when IGPL, in partnership with its wholly owned Indian entity Metal Mining Pvt Ltd (MMI), began exploration in the region. Early exploration efforts led to the establishment of a JORC-compliant inferred resource of approximately 1.74 million ounces of gold by 2006, with systematic plans for a more expansive drilling programme targeting up to 6 million ounces.

However, despite technical validations and government-level interactions, Panthera’s efforts to secure a Prospecting Licence (PL) for the area were repeatedly stalled by the Government of Rajasthan. The company claims that this administrative delay transitioned into a de facto denial, especially following the passage of India’s Mines and Minerals (Development and Regulation) Amendment Act of 2021 (MMDR2021). This legislation nullified preferential rights over PLs and Mining Leases, effectively erasing IGPL’s entitlement to proceed with the Bhukia project as originally envisaged.

Panthera argues that these measures led to a total loss of its investment, rendering India in breach of its treaty obligations. The arbitration, first signalled through a Notice of Arbitration issued on 26 July 2024, has now progressed with IGPL filing its Memorial on 16 May 2025 as per the tribunal’s schedule.

How Valuable Is the Bhukia Gold Deposit?

The Bhukia resource has gained significance over the years due to successive upgrades in its estimated mineral content. From an initial 1.74 Moz estimate in 2006, the Geological Survey of India (GSI) published an expanded estimate in 2014 indicating up to 6.7 Moz of indicated and inferred gold resources. More recently, the Government of Rajasthan issued an official resource estimate suggesting 113.52 million tonnes of ore at an average grade of 1.96 grams per tonne of gold and 0.14% copper—equivalent to around 7.2 million ounces of gold plus valuable copper, cobalt, and nickel by-products.

The Indian government subsequently awarded the mining rights for the same area to an individual third party, Saiyyed Owais Ali, through a public auction. The winning bid terms included a US$60 million upfront payment, an additional US$60 million performance guarantee, and a mineral share agreement granting the government 65.3% of the value of all gold mined in the area.

This auction, Panthera claims, not only represents a direct appropriation of its legally invested asset but also supports its valuation claim, given the scale and potential economic yield of the Bhukia deposit.

What Are the Legal Grounds for Panthera’s Damages Claim?

Panthera’s legal case rests on the 1999 bilateral treaty between India and Australia, which provides protections for cross-border investments. IGPL claims that the Indian state’s actions constitute indirect expropriation and a failure to provide fair and equitable treatment, both of which are violations under the treaty.

By invalidating IGPL’s PL application and awarding the resource area to another party without compensation or resolution, India is said to have disregarded treaty protections, thereby exposing itself to international legal liability. The claim for US$1.58 billion in damages reportedly reflects the loss of expected economic benefit from the resource, discounted to present value and adjusted for Indian taxation regimes.

How Is the Arbitration Being Funded?

In August 2023, Panthera secured litigation funding of up to US$13.6 million from LCM Funding SG Pty Ltd, a subsidiary of Litigation Capital Management Limited. This funding is non-recourse in nature, meaning Panthera is not obligated to repay the facility if no monetary recovery is achieved from the arbitration. LCM, a listed company on AIM, is known for its experience in cross-border disputes and arbitration cases involving natural resources and sovereign counter-parties.

This financial backing ensures that Panthera has adequate resources to pursue its claim over what it describes as the illegal appropriation of one of India’s largest untapped gold deposits. The use of a third-party funder also signals the company’s confidence in the legal merits of its case, as such firms typically undertake extensive due diligence before committing funds.

What Is the Market and Investor Sentiment Around Panthera Resources?

Panthera Resources Plc (AIM: PAT) has seen intermittent interest from retail and institutional investors, largely dependent on developments surrounding the Bhukia arbitration. While the company’s share price has historically reflected the protracted nature of legal hurdles, the formal filing of the Memorial represents a turning point in the arbitration timeline.

Investor sentiment remains cautiously optimistic, particularly as the scale of the Bhukia resource and the US$1.58 billion claim could substantially alter the company’s valuation if successful. However, the inherent uncertainty of international arbitration outcomes, coupled with India’s recent posture on sovereignty and treaty disputes, injects a note of caution into market forecasts.

There has been limited evidence of significant FII or DII activity in Panthera shares, as the stock is tightly held and lacks the liquidity typical of larger mining companies. Nonetheless, industry analysts tracking treaty-based arbitration in the resource sector view this case as a potential benchmark for future claims under Australia-India or similar BITs.

Could This Case Set a Precedent for Future Investment Treaty Arbitrations in India?

India has faced increasing scrutiny in recent years from foreign investors citing unfair treatment, especially in sectors such as telecom, mining, and energy. Several disputes under BITs, including those involving Vodafone and Cairn Energy, have triggered policy debates on India’s openness to foreign capital amid regulatory volatility.

Panthera’s claim could potentially establish a precedent, particularly if the tribunal rules in favour of the claimant. Given the scale of the damages sought and the fact that the project was later auctioned off under terms seen as commercially robust, any tribunal decision recognising expropriation could reshape how India manages future mineral asset allocations and dispute settlements under international law.

The case also underscores the need for more transparent and legally defensible frameworks in India’s mineral licensing regime. With the government simultaneously pushing for resource monetisation under its auction-based reforms, unresolved legacy disputes such as Bhukia represent reputational risks for India’s mineral policy framework.

What Comes Next in the Bhukia Arbitration Timeline?

With the Memorial now submitted, the arbitration process will move into its next phases. These include the submission of India’s Counter-Memorial, additional rounds of documentation, evidentiary hearings, and final arguments. A final ruling could take several months to over a year depending on the complexity of submissions and procedural timelines.

Meanwhile, Panthera will likely continue to keep shareholders informed of milestones in the proceedings, while also advancing its West African gold exploration efforts to diversify its operational risk.

While there remains no certainty around the arbitration’s outcome, the scale and context of the claim elevate it into one of the most closely watched investor-state arbitration cases currently active under the Australia-India BIT framework.