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Perth Mint Gold Doping Scandal With Shanghai Splits Silver Hairs

Neil Campbell
Neil lives in Canada and writes about society and politics.
Published: March 13, 2023
The Perth Mint Gold Doping Scandal is Bunk, Revolving Around Silver Content in 99.99% Gold Bullion Alloy
A file photo of a department store employee in Japan displaying a box of silver coins coated with gold minted by Australia's Perth Mint in July of 2006. A recent scandal by Australian media alleging the mint had defrauded China with sales of 100 tonnes of impure gold is somewhat bunk, revolving around the amount of silver in the Mint’s already 99.99% pure gold bullion. (Image: YOSHIKAZU TSUNO/AFP via Getty Images)

A potential scandal involving Australia’s Perth Mint allegedly defrauding the Chinese Communist Party on several billion dollars worth of gold bullion sales over the course of the last three years has shown itself to be a case of splitting silver hairs.

A March 6 investigative journalism report by the Australian Broadcasting Corporation claimed that the Perth Mint had “doped” as much as 100 tones of gold bullion valued at almost $9 billion USD sold to its largest client, the Shanghai Gold Exchange (SGE), since 2018.


Relying on a “leaked internal report” from an anonymous Mint insider who “asked not to be named as they could face five years’ jail if their identity is revealed,” the ABC stated definitively that the Perth Mint was guilty of “selling diluted or ‘doped’ bullion to China and then covering it up.”

The insider was quoted as calling the conflict a “scandal of the highest level” and adding that they “don’t know if I’ve ever seen one this big.”

So significant is Australia’s Perth Mint because it’s “the largest processor of newly mined gold in the world,” the ABC stated, noting it sold more than $20 billion worth of bullion in 2022 alone.

Gold “doping,” the article explains, is the practice of alloying pure gold with trace amounts of other metal elements, such as copper and silver, but nonetheless remaining within the industry standard 99.99 percent purity. 

The ABC stated that the Mint began using the technique to save money in 2018, economizing $620,000 from its budget.

But the article quietly added that it wasn’t that the Perth Mint had been committing the sin of selling impure gold, only that the amount of silver it had used in the alloying process was above what the SGE required from the Mint in its contract.

“Just months after the doping began, the report says refinery staff identified concerns that silver and copper levels may have exceeded those allowed by the SGE,” the article wrote.

Moreover, the ABC revealed that the complaints had nothing to do with copper, and only silver. In 2021, the SGE claimed it had identified two 1 kilogram bars (32.15 troy ounces; $56,500 USD~ at the time) that had “contained too much silver and were non-compliant with its specifications.”

The issue for the Mint was, however, paramount, because the Shanghai Gold Exchange is its largest client.

According to the ABC, the insider’s report showed that the Mint noted that when it checked its own internal reports on the two bars identified that one batch had been “red flagged” by the refinery.

“The bar’s purity test, known as an ‘assay’, had failed to meet SGE’s strict standards for silver, but was still above the crucial 99.99 per cent purity.”

So although it was only that Perth’s gold may have been alloyed with more silver than Shanghai would have liked, rather than having sold an impure product, the problem was that the “red flagged” bar imperiled the entire three years’ worth of shipments to the Chinese government.

And when the Mint discovered the problem, they declined to notify their client that one batch had been below the SGE’s standards.

An internal document showed that the Mint’s CEO at the time had instructed that “only the compliant assay would be provided to the customer, with the broader burden of proof to be left with the SGE to prove non-compliance,” the ABC alleged.

The Mint told ABC that the specific bars the SGE filled a complaint about were not examined “due to Chinese government restrictions on exporting gold from China, the customer did not return the bars.”

On March 8, the Mint issued a press release clarifying the situation, “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.”

And the Mint says not only does it meet the 99.99 percent purity industry standard, it exceeds it, and by a significant margin, “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%.”

They note that this monogram “adheres to the SGE’s non-gold specification standards.”

Excess silver content has nonetheless embroiled the Mint in a quagmire with the London Bullion Market Association (LMBA), who announced on March 9 that it had launched its “Incident Review Process” in response to the ABC’s allegations.

“…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 announcement states.

The Perth Mint responded with a press release on March 9 stating it “welcomes this engagement with the LBMA, which is a long-term partner of our business.”

Although the ABC attempted to fan the flames of the controversy in a March 8 follow up article titled Here’s What You Need to Know About the Perth Mint Controversy — and Why It Matters, the same day, the SGE denied the controversy even existed.

According to a Reuters report, the SGE impugned the ABC in a statement, “The relevant media failed to fulfill their responsibility to review the content, resulting in dissemination of inaccurate content on the Internet, causing serious damage to the reputation of the Shanghai Gold Exchange.”