Perth Mint sold ‘doped’ gold to China and then allegedly tried to cover it up

Up to $9 billion in gold sold by the Perth Mint to China could be recalled after some bars were discovered to have been diluted with other metals.

The WA government’s mint, the largest refiner of newly mined gold in the world, began “doping” its gold in 2018 — a process that mixes silver or copper while maintaining purity above 99.99 percent.

While the product met generally accepted standards in the global gold market, up to 100 tons of bullion shipped to China may not meet the stricter standards set by the Shanghai Gold Exchange (SGE).

Some of the Perth Mint’s gold tested by the SGE exceeded the allowable silver content.

Even more remarkably, when Perth Mint was caught failing to meet SGE standards, they reportedly tried to cover it up, fearing it could damage the mint’s reputation, the ABCs reports. Four corners.

The 124-year-old Perth Mint is the largest refinery of newly mined gold in the world

It began “doping” or diluting its gold in 2018, mixing copper or silver but keeping the purity above 99.99 percent

A Perth Mint insider told the program that it is a “scandal of the highest level.”

The 124-year-old Perth Mint is Australia’s largest gold refiner with sales of nearly $22 billion last financial year.

It sold nearly 20 million coins, medallions and bars to customers in more than 130 countries.

WA Premier Mark McGowan was the minister in charge of the Perth Mint for four years, until March 2021.

The “doping” program was introduced in 2018 with expected savings of about $620,000 per year – a small fraction of the coin’s sales.

Documents show that some internal staff were concerned that the gold bars might not meet SGE standards, but the program went ahead.

The SGE itself first claimed in September 2021 that two Perth Mint gold bars it had tested with a metallurgical test were said to contain too much silver.

The doping program was immediately halted and an internal investigation was launched – which found that one of those two bars had been checked before leaving Perth Mint and allegedly failed to meet SGE’s standards.

Instead of informing the Chinese exchange, Perth Mint chose not to forward the failed test.

The internal investigation provides insight into why.

“Had SGE – Gold Corporation’s leading exchange customer – publicly disclosed that they had problems with Gold Corporation bars … the impact of negative public statements on the company could be very significant,” the internal report said.

The report also pointed to the size of the product that could be affected.

“Based on an average understanding of volumes… it was possible to recall up to 100 tonnes of stock from the Shanghai Gold Exchange for replacement,” the report said.

The Perth Mint seemed desperate to avoid losing their accreditation with SGE and the damage this would do to their reputation in global gold markets.

The mint claims that since 2021 the refining method has improved and the gold is now of a higher purity than the industry standard.

But those are not the only problems.

WA Premier Mark McGowan was in charge of the coin for four years until 2021

Perth Mint is also under investigation for possible violations of money laundering laws

It is also being investigated separately by AUSTRAC, the financial crime regulator, which last year ordered the appointment of an external auditor to the Western Australian public company after it found compliance issues.

The auditor is investigating whether Gold Corporation, trading as Perth Mint, has complied with anti-money laundering and terrorism financing obligations after allegedly selling gold to individuals known to be associated with criminal syndicates.

It is also being investigated whether the currency meets the requirements for reporting suspicious matters.

Any confirmed violation of money laundering laws could expose the coin to heavy criminal fines that would ultimately be paid by WA taxpayers.

A spokeswoman for Perth Mint said the company is ‘obliged and fulfilling its obligation’ to report to AUSTRAC if staff suspect an individual or transaction is related to a crime.

She said the coin had launched recovery programs and processes against money laundering and terrorist financing to improve engagement with customers.

“The Perth Mint recognizes that there have been instances of historical non-compliance that we are working on, including with regulators such as AUSTRAC, to rectify any shortcomings,” she said.