The world’s biggest precious metals exchange says it is taking the latest allegations swirling around the Perth Mint very seriously as the West Australian government stonewalls on calls for a royal commission.
The London Bullion Marketing Association (LBMA) announced on Thursday that it has launched an investigation, known as an incident review process, into the WA taxpayer-owned mint amid allegations it tried to cover up the sale of less than pure gold to the Shanghai Gold Exchange and only stopped the practice after its biggest customer complained.
Adverse findings under the incident review process can result in refineries being struck off the LBMA’s Good Delivery List of entities accredited to supply gold and silver.
The LBMA said it would review the current circumstances at the mint, which is already under investigation by Australia’s financial crimes regulator in relation to compliance concerns under the Anti-Money Laundering and Counter-Terrorism Financing Act.
“This is a high priority, as any incident or issues that may impact the credibility of the Good Delivery List and the wholesale precious metals market are treated very seriously,” the LBMA said on Thursday.
“At this point, it is difficult to commit to a timeline (for the review), given that the process involves numerous stakeholders.
“As the independent authority for precious metals, LBMA maintains the highest standards for responsible sourcing. We, therefore, take very seriously allegations relating to the Perth Mint.”
The Perth Mint, which remains on the Good Delivery List pending the outcome, issued a statement acknowledging the LBMA review.
A mint spokesman said it valued the LBMA relationship and was committed to “working openly and transparently throughout the process”.
The spokesman said the mint was working hard to meet its obligations to the WA community, the gold mining sector and customers around the world.
WA premier Mark McGowan said this week that he had no knowledge the mint had engaged in a practice known as gold doping that sparked a complaint by the Shanghai Gold Exchange (SGE) until the claims were aired in the media.
He was the minister responsible for the mint when it started gold doping – introducing trace amounts of impurities like silver or copper – in 2018 to save costs, and with the intention of keeping its bars within the industry standard of 99.99 per cent purity.
The complaint from the SGE in 2021 was around one kilogram gold bars supplied by the mint not meeting the SGE’s strict limit on silver content.
The complaint prompted an internal investigation at the mint and raised concerns it could have to recall gold worth almost $9 billion at today’s prices.
In a statement issued on Tuesday, the mint said there was “no question” about the “gold value and purity” of the bars it sold to customers in China.
However, it changed its refining methods to ensure higher purity in the wake of the complaint.
WA Opposition Leader Shane Love doubled down on his calls for a royal commission after Mr McGowan claimed he had been kept in the dark about the mint’s gold doping and other issues.