The Perth Mint, Australia’s official bullion mint, is currently facing a $9 billion recall from China for allegedly selling “doped” bullion and attempting to cover it up, as reported by Australia’s ABC News. The practice of doping gold involves adding impure minerals such as silver to the mix to reduce costs and lower the quality of the gold. The Perth Mint reportedly began diluting the gold it emits in 2018. The report covered by ABC claims that some refinery employees identified that more impure minerals were added than allowed by the Shanghai Gold Exchange (SGE).
Accusations of gold dilution and cover-up at the Perth Mint
The Perth Mint is in the spotlight this week due to a report by ABC News Australia correspondents Angus Grigg, Ali Russell, Stephanie Zillman and Meghna Bali, accusing the official Australian mint of diluting or “doping” gold.
Journalists uncovered a leaked internal report, and according to the report, the Mint is facing a $9 billion withdrawal from China over gold doping allegations. The process keeps the gold just within the 99.99% purity stage, but different minerals such as copper and silver were reportedly added in 2018.
The government-owned Perth Mint has been selling diluted gold to China. The mint began doping its gold in 2018 as a “savings measure.” #bitcoin it cannot be diluted. pic.twitter.com/nbbWMlK66f
— Cole 🇿🇦 (@ColeAreTee) March 7, 2023
According to the internal report, when 100 tons of gold bars were delivered to SGE, the bars did not meet Shanghai standards and higher levels of silver were identified. A Perth Mint source, speaking to ABC on condition of anonymity, described the issue as a “scandal of the highest order”.
The doping was supposedly done to save $620,000 a year, but refinery experts noted that despite trying to stay within the 99.99% purity standard, some mineral levels exceeded what the SGE would allow. The ABC report states that the scandal began to come to light in 2021 when SGE alleged that two gold bars were not up to scratch.
“Based on the average understanding of the volumes… it was possible to withdraw up to 100 tonnes of stocks from the Shanghai Gold Exchange to replace them,” explains the internal report discovered by ABC.
In addition, SGE’s exchange client reportedly remained silent on the doping issue, with the Perth Mint’s internal report stating that if the client disclosed the issue publicly, “the impact of negative public statements on the business could be very significant.” .
ABC reports that the Perth Mint has confirmed a customer complaint about a small amount of gold bullion, saying it has improved refining methods and is now committed to much higher purity requirements.
The Perth Mint also issues a gold-backed token known as the Perth Mint Gold Token (PMGT)and each coin is backed by a 1 ounce Goldpass certificate which entitles the owner to 1 ounce of physical gold in the Perth Mint’s reserve.
There is a circulating supply of 1,207 PMGT today, and 253 unique Ethereum-based addresses have PMGTs. Interestingly, PMGT is selling for lower values on March 7, 2023, down 0.8%, while competing gold tokens such as XAUT and PAXG are selling for higher values on Tuesday.
What do you think about the Perth Mint gold doping scandal and the impact it could have on the bullion issuer? Share your views in the comments section below.
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