LBMA investigating Perth Mint allegations after 100 tonnes of "doped" gold shipped to China over three years
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(Kitco News) - The Perth Mint's reputation for its gold purity is at risk after the London Bullion Market Association announced Thursday that it would conduct an investigation regarding allegations that it doped bullion shipped to China.
The investigation could impact the Perth Mint's standing in the LBMA's Good's Delivery List.
""Failure to meet the standards required has serious implications for GDL refiners, and members alike. Discipline could include Membership revocation, suspension subject to resolution or being transferred to the Former List with immediate effect," the LBMA said in the description of its Incident Review Process.
The LBMA investigation comes after a news report from Australian Broadcasting Corporation alleging that the sovereign mint sold diluted or ""doped" gold bars to China for three years and tried to cover it up when it was discovered. The Perth Mint could face a gold recall of $9 billion, according to the report.
The Perth Mint refines its gold to 99.99% purity, meeting industry standards; however, the accusations claim that there is still too much silver in the gold bars according to standards set by the Shanghai Gold Exchange.
While maintaining industry standards, according to the ABC article, which quoted government documents, the Perth Mint started allowing more trace metals into their gold bars to save $620,000 a year in refining costs.
The Perth Mint could have potentially shipped 100 tonnes of ""doped" gold to China. In September 2021, The Shanghai Gold Exchange raised concerns about two gold bars they had found that were non-compliant with its standards. The Perth Mint addressed the SGE's concerns regarding the two bars but didn't disclose the broader issue.
The Perth Mint has pushed back against the allegations, standing by its refining standards and practices.
""The Perth Mint emphasizes 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 mint said in a statement.
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""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," the mint said. ""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."
In a separate statement, the Perth Mint said it would work with the LBMA as it conducts its Incident Review Process.