Western Australia’s Premier said he had no knowledge of an elaborate gold diluting scheme at Perth Mint, despite having direct ministerial responsibility over the refinery at the time the program started.
Mark McGowan fronted the media in Perth on Wednesday where he was grilled over the scandal engulfing Gold Corporation, the official name of the state-backed — and therefore taxpayer-backed — mint.
The explosive allegations of gold “doping”, as it’s known in the industry, came to light on Monday in an ABC Four Corners report.
Mark McGowan, who was minister responsible for the mint from 2017 until early 2021, said he only found out about the doping on Monday’s Four Corners report. Picture: NCA NewsWire /Philip Gostelow
It found Perth Mint had two gold bars flagged by the Shanghai Gold Exchange (SGE) in 2021 for containing more silver than was acceptable under SGE’s standards, putting some $8.7bn in gold sold to China around this time in doubt.
Mr McGowan was Minister for State Development from 2017 to April 2o21, when he handed the portfolio to Mines and Petroleum Minister Bill Johnston, giving him ministerial oversight of the refinery.
Speaking on Wednesday, Mr McGowan, said he wasn’t informed of the SGE complaint when Mr Johnston became aware of it in January 2022 — four months after the initial complaint was made, after which Perth Mint directors decided to end their doping regime.
The Perth Mint only stood to save about $620,000 per year from its doping program, despite an annual turnover of about $20bn. Picture: Perth Mint.
“It was an operational matter that was resolved with the purchases of the gold at the Shanghai Gold Exchange,” said Mr McGowan, “so the issue was resolved.”
The doping, also known as alloying, sought to maximise value the mint by reducing the purity of bullion from 99.96 per cent to 99.92 per cent — leaving a narrow margin for error, and only saving the mint about $620,000 per year.
Comparatively, Perth Mint has an annual turnover closer to $20bn.
“In relation to operational matters in government trading enterprises, that’s often something ministers don’t get involved in,” said Mr McGowan, “and if ministers do get involved in those things, then that raises a whole range of other questions as to why a minister would be involved in operational matters.”
The Premier added that the odds of Gold Corporation, and by extension the taxpayer, could be forced to buy back the 100-tonnes of alloyed bullion, were “extremely unlikely.”
Perth Mint, aka Gold Corporation, also trades in collectable minted coins, as well as bullion. Picture: Tourism WA.
On Tuesday, Perth Mint Chief Executive Jason Waters defended the doping program, which is a legal and common industry practice.
“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.”
Meanwhile, Perth Mint appears to be facing an uphill battle to restore its reputation following the Four Corners report.
The Australian Koala 2023 #Bullion Coin Series, featuring Her Majesty Queen Elizabeth II’s Memorial Obverse, is the much-anticipated series, delighting collectors and investors alike. Each coin in the program is meticulously crafted in the finest detail. https://t.co/fq5V7YWYlJpic.twitter.com/el9ORDdVt6
— The Perth Mint (@perthmint) March 1, 2023
Comments under an unrelated Perth Mint Twitter post from March 1 have been scathing of the doping program.
“You only saved $600k per year on doping your product!,” reads one reply under a post advertising a 2023 bullion coin, “Why would you risk this?”
“I‘ll never purchase any mint products for the scandal just appearing,” said another.
WA’s Nationals Opposition Leader Shane Love is calling for a Royal Commission into the refinery.
Read related topics:Perth