Off The Wire
LBMA clears Perth Mint of serious wrongdoing in sourcing gold
(Reuters) - The London Bullion Market Association (LBMA) said on Friday it would continue to accredit the Perth Mint after an investigation into allegations that it processed unethically sourced gold found no significant wrongdoing.
The withdrawal of accreditation would have hurt the mint, one of the world’s largest gold refiners, because big banks that dominate gold trading usually require it.
The LBMA’s guidelines aim to ensure that refiners do not process material whose production or trade contributes to human rights abuses, conflict, crime or environmental degradation.
The Australian Financial Review newspaper said in June the Perth Mint had refined gold from small-scale gold miners in Papua New Guinea who used child labour and toxic mercury.
The mint, owned by the government of Western Australia, has insisted it acted legally and ethically.
The LBMA said its investigation had revealed no “zero-tolerance non-conformance,” and that the Perth Mint would therefore remain on its “good delivery” list of refiners.
It said it had uncovered less serious failings in the way the mint assessed supply chain risks, including the failure to categorise the company in Papua New Guinea from which it took gold as a high risk supplier.
The mint must make improvements to its sourcing procedures and have these scrutinised by an outside auditor, the LBMA said. It declined to say what these were.
It said it had removed its accreditation from the mint’s previous auditor and was reviewing the accreditation of the company that auditor worked for, Bureau Veritas (BVI.PA).
Bureau Veritas did not immediately respond to requests for comment.
Perth Mint CEO Richard Hayes said the LBMA had confirmed the rigour and integrity of the mint’s procedures and that its recommendations would be implemented.
He said a minority of the major banks that take gold from the mint had paused purchases during the LBMA investigation but he expected these to now resume.
Following the Australian Financial Review report the Perth Mint said it would stop processing metal from artisanal and small-scale miners. Hayes said such gold accounted for 0.3% of the refinery’s throughput.
Reporting by Nakul Iyer and K. Sathya Narayanan in Bengaluru and Peter Hobson in London; editing by Jason Neely and David Evans