Making a mint from the world’s gold love affair

The Perth Mint has become a world-renowned specialist of precious metals since the Burke Government decided to develop the operation in 1986. Increased exports and tourism appeal make the mint one of WA’s marketing success stories, as Julie-anne Sprague reports.

SINCE taking the reins as Gold Corporation chief executive officer in 1986 Don Mackay-Coghill has turned its major development focus, The Perth Mint, into one of the world’s leading bullion coin and coin collectable marketers.

He left his 17-year post this week in the hands of former managing director of the South African Mint Company, Edward Harbuz, safe in the knowledge that he has been instrumental in driving the government asset’s net worth from $5 million to $51 million.

The Perth Mint is responsible for adding value to the State’s gold production and its function is as much a marketing job as a production one.

Its products are exported internationally and it is one of the top three gold bullion producing mints in the world. The Perth Mint is now pushing into new international markets and does so with a very recognisable brand name. 

The brand, and the mint’s position as one of the world’s biggest producers of investment or bullion coins, was the result of some hard work during the formative years, according to Mr Mackay-Coghill.

He said that, when he left his position as chief executive of South Africa’s International Gold Corporation to join GoldCorp Australia – established to develop The Perth Mint, with the subsidiary Gold Corporation formed later to manage it – it was obvious that The Perth Mint was under-utilising its assets.

“The antiquated gold refinery was unable to cope with Australia’s growing gold production and it was not minting coins,” he said.

“We got the minting going again and launched the gold nugget bullion coin and we built two new refineries, one near the airport and the other in Kalgoorlie.”

The nugget coin series overtook Canada’s Maple Leaf as the biggest selling gold bullion coin in the world in 1991.

An important element to the mint’s success has been the establishment of distributor alliances that enable its products to be sold and marketed offshore.

And while The Perth Mint now enjoys a world-renowned brand name for quality innovative products, in the early days it was a case of calling in some favours, according to Mr Mackay-Coghill.

“What I did was call in all the IOUs from my days with the

Krugerrand [South Africa’s bullion coin],” he said.

“I had excellent relationships with outlets across the world and I called in some favours and got them on board as distributors. Even though there was a lot of bullion out there they were happy to do it.”

From there Mr Mackay-Coghill set about extending the mint’s range, including the expansion from gold products to include silver and platinum.

The development of new concepts for proof, or collectable coins, was increased, an investment depository was set up, and The Perth Mint began to market itself as a tourist destination.

Most of its marketing efforts are now targeted at known investors and a database of 50,000 coin collectors who are sent regular product catalogues.

The only time the mint uses mass media advertising is when a product, such as the recent Prince William 21st Birthday Commemorative Coin, has mass appeal.

According to Mr Mackay-Coghill The Perth Mint’s global status as an innovative product developer has created a new market for custom minting, which involves the mint producing coins made to order, usually from offshore clients.

“It has had enormous changes over the past 17 years. The mint is now recognised as cutting edge with new products and marketing and it [the global market] sees us that way,” Mr Mackay-Coghill said.

“It has been done in a bear market. In January 1980 the gold price was $850 … it came right down to $250. The fact that we survived was the biggest achievement.”

The Perth Mint has done more than just survive, however.

It has recently entered the Russian market, is working hard to get a foothold in China, and is developing new products to open up its sales potential in the jewellery sector.

Gold Corporation’s new chief executive Ed Harbuz said the mint would continue to expand its product portfolio and push the barriers of innovation.

“Perth Mint has a reputation worldwide for its creative products. We have to live up to that,” he said.

Mr Harbuz said jewellery was an emerging market for the company. 

“We are developing a range of jewellery that we are very excited about and we think that it will be something big for us,” he said.

The in-house research and development team has develop-ed a range of zodiac coins to be sold to the local market and in America and Asia.

Mr Harbuz said the world’s two main coin shows (one in the US and the other in Switzerland) would continue to be important trade fairs for the company.

“It is a way to meet distributors and collectors. Especially in Europe and America, the direct sellers are a sophisticated industry,” he said.