The Perth Mint has initiated an independent third-party review of its audit process in response to allegations that the refinery was purchasing gold from a convicted murderer in Papua New Guinea.
This comes after the Western Australian Premier Mark McGowan ordered an urgent review of how the Mint evaluated its suppliers, according to a report by the Australian Financial Review.
The report stated that McGowan had asked The Perth Mint chair of gold corporation Sam Walsh to lead the investigation.
Walsh also reinforced Perth Mint’s commitment to ethical, robust and best practice processes when sourcing the precious metal.
“I have initiated an independent third-party review of the Perth Mint’s audit processes,” Walsh said. “The review will also assess the arrangements with licensed counterparties that may deal with artisanal smallscale mining (ASM).
“Effective immediately as part of this process, the Perth Mint has suspended relationships with all companies and aggregators dealing with ASM.”
Walsh remains confident that the Perth Mint “complies fully with all regulatory requirements and the responsible gold guidelines set out by the global gold industry’s governing bodies”.
The mint, owned by the Western Australian Government, is one of the world’s largest gold refiners and is accredited by the London Bullion Market Association (LBMA).
The LBMA’s stamp of approval – called LBMA good delivery – is a crucial in the international gold exchange-traded fund (ETF) market. Institutional investors require ETFs to be backed by LBMA good delivery bars.
The LBMA announced on June 13 that it would investigate the reports regarding the mint to ensure the refiner did not process gold whose production or trade contributed to human rights abuses, conflict, crime or environmental degradation.
If the mint is found to have violated the LBMA guidelines, it could have its accreditation removed.
On June 15, the Perth Mint released a statement welcoming a review proposed by the LBMA.
The LBMA audits the Perth Mint annually to ensure its source practices meet its responsible gold guidance, including sourcing only ethical gold.
The Perth Mint chief executive Richard Hayes had stated that the Perth Mint had always met or exceeded the LBMA’s standards.
“We are vigilant in our assessments of companies from which we source gold and other metals for processing,” he said.
“(We) are confident we fully comply with regulatory requirements and the responsible gold guidelines set out by the global gold industry’s governing boards.”