Sold Gold Bars Were 99.99 Percent in Purity, Says Perth Mint
Australia’s official bullion mint, Perth Mint, says there was “no question” about the gold value and purity of its gold bars sold to Chinese customers, which indisputably contained at least 99.99 percent gold “at all times.”
It comes in response to an investigation by the Australian Broadcasting Corporation (ABC), which found the mint may need to recall almost $9 billion worth of gold bars after it was discovered they had been diluted with other metals and allegedly swept the issue under a rug.
Perth Mint is wholly owned by the Western Australian government and is the only mint in the world backed by a government guarantee.
It prides itself on producing gold that is 99.99 percent pure. However, ABC’s Four Corners program said that in 2018, it began “doping” or diluting gold to lower the gold content.
Doping is an industry-wide accepted process due to the nature of the refining process and does not impact the 99.99 percent purity of gold.
A Perth Mint spokesperson told The Epoch Times in a statement that its 1 kilogram (2.2 pounds) gold bars contain up to 0.01 percent of non-gold materials, including silver and copper.
“These purity specifications are aligned with industry standards and akin with those set by the international market authority, the London Bullion Market Association,” the spokesperson said.
In 2021, the Shanghai Gold Exchange (SGE) informed the mint that two of the tested gold bars exceeded its specifications of non-gold content.
“The SGE specifications demand that the non-gold component—that is, 0.01 percent of the bar or 100 parts per million (ppm)—contains no more than 50 ppm silver,” the Perth Mint spokesperson explained.
Reputation on the Line
According to an internal document obtained by the ABC, Perth Mint realised that the entire batch sent to SGE was unlikely to meet its gold standards and noted the potential consequences the incident could have on its reputation.
“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,” the report allegedly says.
“Based on average understandings of volumes … it was possible for up to 100 tonnes of stock to be recalled from the Shanghai Gold Exchange for replacement.”
Recalling the 100 tonnes of gold alone is estimated to cost about $8.7 billion, which would then need to be shipped back to Perth, melted, and recast without the extra impurities before reselling.
The internal document revealed that soon after the doping program began, concerns that the gold’s new purity levels would fail SGE quality tests, known as assays, had been raised by staff members.
The doping practice continued until it was at risk of losing accreditation with the SGE, which would pose a huge blow to its reputation.
After SGE flagged the issue, Perth Mint immediately launched a review of its refining practice, including its “doping” process.
The report said the mint allegedly decided against sending SGE the failed assays.
“CEO [Richard Hayes] confirmed only the compliant assay would be provided to the customer, with the broader burden of proof to be left with the SGE to prove non-compliance,” the report alleged.
A spokesperson for Perth Mint told the ABC that it had received a customer complaint but due to Chinese regulations on exporting gold out of China, the bars had not been returned “and therefore the customer’s concerns could not be verified.”
Perth Mint told The Epoch Times that it now implements processes to ensure that its 1-kilogram gold bars have an average minimum gold purity content of 99.996 percent, above the industry standard of around 99.992 percent.
“As a result of this new practice, which came into effect in December 2021, the maximum non-gold component in a 1-kilogram bar is 0.004 percent—also adhering to the SGE’s non-gold specification standards,” the spokesperson said.
