CITIZENS NEWS

Perth Mint allegedly sold $9 billion in diluted gold to China

By isabelle // 2023-03-10

As much as $9 billion in gold sold to China by Perth Mint may be recalled after some bars were found to be diluted using other metals, according to a recently leaked internal report. The fiasco has caused a major scandal for the mint, which is owned by the Western Australian government and is the world’s biggest refiner of newly mined gold. The practice of “doping” gold was adopted by the mint back in 2018. It involves mixing in metals such as silver or copper while ensuring the gold's purity remains above 99.99%. Although this enables the product to meet broader industry standards that are widely accepted within the international gold market, 100 tons of bullion that were shipped to China are believed to have fallen short of the Shanghai Gold Exchange’s stricter standards for silver content. Some of the gold that was tested by the Shanghai Gold Exchange reportedly exceeded the permitted silver content levels. Furthermore, it has emerged that when Perth Mint was caught failing to meet the standards, they allegedly attempted to cover it up in an attempt to preserve their reputation. An insider at Perth Mint told the Australian media that it is a “scandal of the highest level.” The mint has sold nearly 20 million gold bars, medallions and coins to customers across more than 130 countries in its 124-year history and noted a turnover of nearly $22 billion last year. It is the biggest gold refinery in Australia and the only one in the world to have a government guarantee. It is also a top tourist attraction in Perth and known for producing commemorative coins for events and occasions such as royal weddings and new films. When the doping program was implemented, it was expected to save the mint around $620,000 per year, which is just a small fraction of their overall turnover. Within just a few months of introducing doping, however, refinery staff documents appear to indicate that some staff members were concerned the gold bars would not meet the Shanghai Gold Exchange's standards. However, the program pushed forward. In September 2021, the SGE first claimed that two gold bars received from Perth Mint were found to contain excess silver in a metallurgical assay. An internal investigation revealed that one of the two bars was checked before leaving Perth Mint and failed to meet the standards at that point, but Perth Mint simply chose not to send the failed assay test instead of informing the Chinese exchange. An internal report offers some insight into why they did not admit to the problem at the time. It noted: “If SGE – Gold Corporation's pre-eminent exchange client – had made public that they had issues with Gold Corporation bars … the impact of negative public statements on the business could be very significant.” It also expressed concerns about losing its accreditation with SGE and how that would negatively impact their reputation in the global gold markets. The mint claims that it changed its refining method in 2021 and the gold it offers now has a higher purity than the accepted industry standard.

Perth Mint is also being investigated by financial crimes regulator

However, getting caught selling doped gold isn't the only problem the mint is facing. Perth Mint is also currently being investigated by the financial crimes regulator AUSTRAC. Last year, they appointed an external auditor to investigate concerns that the mint failed to comply with counter-terrorism and anti-money-laundering regulations after selling gold to individuals who are known to be linked to crime syndicates. The mint's compliance with requirements pertaining to reporting suspicious matters is also currently being investigated. If the mint is found to have violated any money laundering laws, they could be facing significant criminal fines, and Western Australian taxpayers would foot the bill. Sources for this article include: ABC.net.au DailyMail.co.uk

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