The Perth Mint responds to ABC TV allegations
The Perth Mint has responded to an ABC Four Corners program on 6 March 2023 which alleged that The Perth Mint could face a potential recall of $9 billion worth of ‘doped’ one-kilogram gold bars from customers in China.
The Perth Mint emphasises that there is no question about the gold purity and value of the gold bars The Perth Mint has sold to customers in China. At all times the one-kilogram bars The Perth Mint produced and sold contained at least 99.99% gold, as per their specifications. This has never been in dispute.
The Perth Mint’s one-kilogram 99.99% gold bars contain up to 0.01% of non-gold materials, including silver and copper. These purity specifications meet industry standards and align with those set by the international market authority, the London Bullion Market Association.
In September 2021, The Perth Mint was made aware that some of its one-kilogram bars did not meet the non-gold specifications of the Shanghai Gold Exchange (SGE). The SGE specifications demand that the non-gold component – that is, 0.01% of the bar or 100 parts per million (ppm) – contains no more than 50 ppm silver.
The Perth Mint immediately launched a review of its refining practices, including how it applied the industry-wide accepted process of ‘doping’ or ‘alloying’ its one-kilogram bars.
Due to the nature of the refining process, there are varying amounts of extra gold above 99.99% in each bar. This is known in the industry as the gold give-away because the customer does not pay for this extra gold. It is gold refining industry practice to minimise the gold give-away without affecting the purity minimum of 99.99%. Minimising is done through ‘doping’ or ‘alloying’ by ensuring sufficient volumes of non-gold elements. This practice does not impact the 99.99% purity of the gold that the customer pays for.
As part of The Perth Mint’s review of refining practices, new processes were implemented to ensure that one-kilogram bars would have on average minimum gold purity of 99.996%, compared with the industry standard of approximately 99.992%. As a result of this new practice, which came into effect in December 2021, the maximum non-gold component in a one-kilogram bar is 0.004% - which adheres to the SGE’s non-gold specification standards.
The Perth Mint is working with its customers and other stakeholders to assure them of our commitment to quality and compliance with all relevant laws and regulations.
The Four Corners program also questioned the checks The Perth Mint makes in relation to retail customers and re-examined historical customer relationships and non-compliance issues.
The Perth Mint is not able to discuss existing or potential customers. Section 74 of the Gold Corporation Act 1987 precludes us from doing so.
The Perth Mint treats all compliance obligations, including in relation to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act), with utmost seriousness and is continually identifying areas for improvement.
The Perth Mint is a complex business operating under a mix of state, federal and international laws. We have acknowledged there have been shortcomings in the past that led to some non-compliance with relevant laws.
The appointment of Chief Executive Officer Jason Waters just under a year ago was the latest milestone in a significant refresh of the leadership team at The Perth Mint. This has included new heads of the Refinery, Treasury and Risk & Compliance areas.
Under Mr Waters’ leadership, The Perth Mint is prioritising activities to progress its fully funded AML/CTF remediation program through the engagement of additional staff for Know Your Customer (KYC) checks as well as historical customer data remediation, enhanced KYC processes for new clients and an improved technology solution to support customer relationship management.
The independent audit ordered by the regulator AUSTRAC is expected to be completed later this year. The Perth Mint welcomes the audit, which will support and inform its ongoing efforts to maintain strong AML/CTF measures, and continues to actively engage with the auditor.
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