Calls for Royal Commission into embattled Perth Mint

The Perth Mint boss has hit back at allegations gold bars were diluted and that there’s a “damning level of mismanagement” within its walls.

The Perth Mint’s chief executive has defended the organisation amid controversy around alleged “doped” gold bars sold to China.

The allegations were levelled at the precious metals processor in an ABC Four Corners segment on Monday which reported the Mint diluted billions of dollars worth of gold bars.

The Perth Mint now faces having to recall $8.7bn worth of gold bullion sold to the Shanghai Gold Exchange over the allegations.

The mint began cutting its bars with silver in 2018, an accepted industry practice as long as the gold remains at a purity of 99.99 per cent, with the remaining 0.01 per cent allowed to be other metals.

The Four Corners review alleges the Perth Mint sold about $8.7bn in diluted or ‘doped’ gold bars to China.

The Mint’s official stance is that there is “no question about the gold value and purity of the gold bars”.

Chief executive Jason Waters said the issue was not that the gold bars fell below international standards, but rather it fell below the standards of the SGE which also includes that the 0.01 per cent non-gold component cannot contain more than 50 parts per million of silver.

“During the period in question, the gold that was produced by the Perth Mint and sold to the SGE, at least some of that gold exceeded that amount [of silver] but none of the gold exceeded that minimum of 99.99 per cent,” Mr Waters said.

“So none of that affected the gold’s value, none of it affected the gold’s use and it retains that value today.”

An internal Perth Mint report showed refinery staff had raised concerns the levels of silver and copper being added to gold bars were too high.

Then, in September 2021, SGE flagged two gold bars which allegedly contained unacceptable levels of silver.

Shane Love, Leader of The Nationals WA, is calling for a Royal Commission into Gold Corporation. Picture: Supplied

An internal examination of the purity of one of those bars also revealed it had been previously flagged by the mint itself as having too much silver.

Despite the tests, then-Perth Mint CEO Richard Hayes decided only to send the complaint tests to SGE.

About this time, the mint also stopped its doping program.

Mr Waters further defended the doping program, saying it would “give away gold” in order to meet the 99.99 per cent standard.

“Gold can’t be refined to the exactly 99.99 per cent standard, although that’s the target,” he said.

“In the refining process we use, gold comes out at 99.996 per cent, but you only sell gold at 99.99 per cent.

“The gold above that is known as giveaway and is provided to the customer. It’s not charged for, so when you’re selling gold in huge quantities, you’re actually giving away gold that you aren’t able to recover the value of.”

Nationals WA leader Shane Love is now calling for a Royal Commission into Gold Corporation, the Perth Mint’s official name.

“As a State government-owned organisation, it is unfathomable to see these allegations about Gold Corporation, particularly given the Premier was directly responsible much of the time,” Mr Love said on Tuesday.

Perth Mint is the only mint in the world with a government guarantee, and is the largest processor of newly mined gold in the world.

The same Four Corners report also revealed Perth Mint is being investigated by financial crime regulator AUSTRAC over compliance with the nation’s money laundering laws.

'Doping' gold bars means cutting them with silver or copper. It's an accepted industry practice and is not illegal.

In one case, notorious Perth bikie Dayne Brajkovich was allowed to buy $27,000 worth of gold bullion in June, only having to show his driver’s license despite rules stating thorough identity checks need to be carried out on bullion purchases over $5000.

There’s no suggestion Mr Brajkovich’s funds were ill-gained, but AUSTRAC’s website explains further checks should have been carried out.

“You must identify the source of funds and source of wealth on certain high-risk customers,” reads its website.

The Perth Mint said that it took anti-money laundering laws seriously, however acknowledged there had been issues with compliance in the past.

“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,” a spokesperson said.

“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 noncompliance with relevant laws.”