Questions about the Perth Mint
- Who is The Perth Mint?
- What is The Perth Mint Depository?
- What are the Mint's policies on privacy and reporting?
- How secure are the Mint's vaults and operations?
- What sort of corporate goverance and control is exercised over the Mint's management?
- Are there any taxes or restrictions on precious metals in Australia?
- Can I audit my precious metal?
Who is The Perth Mint?
Originally opened in 1899 as a branch of Britain’s Royal Mint, The Perth Mint was established to turn the gold from the Western Australian gold rush into sovereigns for the British Empire. Gold Corporation was established by the Gold Corporation Act 1987 on 30 June 1988 to take over the operations of the Mint and is now wholly owned by the Government of Western Australia and trades under the name “The Perth Mint”.
The Perth Mint operates under a Government Guarantee, which is enshrined in Section 22 of the Gold Corporation Act 1987 where it states that "The payment of the cash equivalent of gold due, payable and deliverable by Gold Corporation, the Mint or GoldCorp under this Act and all moneys due and payable by Gold Corporation ... is guaranteed by the Treasurer, in the name and on behalf of the Crown in right of the State". For more information, see the Government Guarantee FAQ page.
The Perth Mint is an integrated precious metals refiner, fabricator and secure depository supplying precious metal related products and services, including:
- Refining around 400 tonnes of gold per annum from the Australasian region;
- Internationally accredited gold and silver cast bars;
- Coin blanks (planchetts) for other mints worldwide;
- Globally distributing Australian legal tender bullion coins and minted bars;
- Proof, numismatic and commemorative coins which are legal tender of Australia and other countries; and
- Storage and safekeeping of precious metals for domestic and international private clients, trusts, superannuation and pension funds, and corporations.
You can find out more about The Perth Mint on our About Us page.
What is The Perth Mint Depository?
The Perth Mint has been storing precious metals for a small number of domestic and overseas customers since the 1980s. In the mid-1990s The Perth Mint formalised these activities into the Perth Mint Depository division. The Depository Program was followed by the Certificate Program in 1999, the stock exchange listed Perth Mint Gold in 2003 and Depository Online in 2015.
Today, Perth Mint Depository stores around $2.7 billion worth of gold, silver and platinum for over 21,000 customers from around the world. Three quarters of our customers hold unallocated metal and close to half reside in North America.
What are the Mint's policies on privacy and reporting?
Under Section 74 of the Gold Corporation Act 1987 employees of The Perth Mint face fines and imprisonment if they directly or indirectly divulge to any person any information concerning the business affairs of customers of The Perth Mint (excluding to a court or under Australian law).
Requests for information on customer accounts from Australian organisations without any statutory right to request such information, or from any foreign organisation or agency, will be denied and will instead be directed to apply to an Australian court for a court order directing us to release the information.
Customers should be aware that we will comply with any lawful request for information from Australian authorities or Governmental agencies including to the Australian Transaction Reports and Analysis Centre under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and associated policies and regulations.
We are not aware of any other custodial facility where breach of privacy results in imprisonment or fines.
How secure are the Mint's vaults and operations?
Since its formation in 1899, The Perth Mint has employed a team of specialist Security Officers to monitor for external and internal threats and who work closely with specialist gold detectives from the West Australian Police Service.
As a working refinery and mint, we directly operate a number of vaults for our operational inventory (which backs our Unallocated liabilities) as well as dedicated vaults for Depository customer Allocated and Pool Allocated metal. Our vaults are Category 11 vaults, meet AUS/NZ Standards 3809 and the the vault specifications have been vetted by our underwriters.
The Perth Mint's sites are monitored 24 hours per day with video recordings retained and access to and within our facilities are controlled electronically from a Class 1 Security Control Room. Our risk management team ensure compliance with an impressive level of procedural security for receiving, releasing and accounting for precious metal (including a Metals Accountant who's sole focus is ongoing reconciliation of our ounce assets and liabilities).
Nationwide Police Clearances are carried out on all staff prior to employment.
What sort of corporate goverance and control is exercised over the Mint's management?
The management of the Perth Mint is overseen by its Board of Directors, which is composed of:
- the Under Treasurer of the State, or their delegate;
- the Mint’s Chief Executive Officer and Deputy Chief Executive Officer; and
- non-executive Directors drawn from the Perth business community.
The Government appoints the non-executive Directors, ultimately giving it direct control over the Perth Mint in accordance with its 100% ownership. The sole Government ownership also results in a consistent approach to risk, avoiding continual Board conflicts that can exist in public companies with shareholders with diverse objectives.
Due to the commercial activities of the Mint, the Government has traditionally appointed Directors with relevant business experience to provide independent and knowledgeable review of the activities of management. This is further enhanced by a Board with a majority of non-executive Directors and a non-executive Chairman.
The presence of a Government representative on the Board ensures the Government is fully and frequently informed of the activities of Perth Mint management. A consequence of this is that all Board papers, including monthly financial reports, are reviewed by officers of the West Australian Treasury, providing additional scrutiny.
Gold Corporation is audited annually by the State Auditor General to ensure compliance with the Financial Management Act 2006 and the Gold Corporation Act 1987. It should be noted that the Auditor General is appointed by the Governor and reports directly to Parliament, thus operating independently of the Government. As the Auditor General notes, “this independence is the cornerstone of public sector audit in the Westminster system of government”.
In addition, the Auditor General appoints a major accounting firm to undertake the external audit on their behalf. This contrasts with normal corporations, who appoint their own external auditor. With the external auditor appointment out of the hands of management, and with the external auditor’s work subject to further review by the Auditor General, the Perth Mint operates under a far more onerous audit regime than that applying to public or private companies.
The Governance structure described above provides an appropriate balance between accountability and responsibility: if something goes wrong there are a limited number of people to point fingers at. Contrast this with the structure of most Exchange Traded Funds, which involve a Trustee, Sponsor, Custodian, Sub-Custodians, Authorized Participants and a Marketing Agent.
Are there any taxes or restrictions on precious metals in Australia?
Australia does not have any import/export restrictions on precious metals - clients are free to take gold or silver into and out of the country. Australia does have a goods and services tax (GST, equivalent terminology in other countries would be “sales tax” or “VAT”) of 10%, but gold, silver and platinum that meets the following definition is exempt from GST
- gold of at least 99.5% purity
- silver of at least 99.9% purity
- platinum of at least 99% purity
- is capable of being traded on the international bullion market, that is, it must be a bar, wafer or coin
- bears a mark of a recognised manufacturer identifying and guaranteeing its fineness and quality
All of The Perth Mint's bullion coins and bars meet the above definition and thus do not attract GST. Please be aware that many other popular legal tender coins and privately minted bars and "rounds" may not meet the definition and thus attract tax when brought into, or purchased in, Australia (see here for more information).
The Perth Mint is currently not required to apply any withholding taxes on capital gains made on precious metals held with it. Australian income or capital gains tax is generally payable by Australian residents on their precious metal and the specific treatment will depend on whether you are deemed a trader or investor. International customers not deemed residents for tax purposes will generally not have Australian income or capital gains tax applied.
Note that the above statements are general in nature and we strongly advise customers to consult an Australian taxation professional to determine to the taxation and jurisdictional implications and issues (if any) of investing, and storing precious metals, in Australia.
Can I audit my precious metal?
Allocated precious metal holders may inspect or collect their precious metal subject to satisfactory personal identification and account verification. It is essential to make an appointment to view Allocated metal as we are a working Mint and your metal will need to be assembled in a special viewing area (customers do not have direct access into the Perth Mint's vaults for security reasons).
Alternatively, a third party nominated by you will be permitted to audit your deposit on presentation of an acceptable instruction from you to the Depository Services Manager.
For Unallocated or Pool Allocated holders, the fact that there is no specific bar or coin recorded against individual clients and the metal backing their account is pooled, it is not possible for a client to audit these types of holdings. Pool Allocated and Unallocated investors rely on the Mint's audited Annual Reports, which are signed off by the Auditor General of Western Australia that they comply with the Financial Management Act 2006 and the Gold Corporation Act 1987. The reports are available on our Annual Reports page.
In addition, Pool Allocated investors can view a listing of the bars reserved against our Pool Allocated balances on our Bulletins and Notifications page.