14/06/2020 - 21:32

Perth Mint facing independent review

14/06/2020 - 21:32

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The London-based exchange that sets standards for the global gold industry has commenced a review of The Perth Mint following reports the WA government-owned business was buying gold from unethical miners.

Perth Mint facing independent review
Richard Hayes says the Perth Mint adheres to the highest ethical standards. Photo: Gabriel Oliveira

The London-based exchange that sets standards for the global gold industry has commenced a review of The Perth Mint following reports the WA government-owned business was buying gold from unethical miners.

The London Bullion Market Association said it takes very seriously the recent allegations relating to The Perth Mint and its sourcing from Papua New Guinea.

It described the review as a high priority and said it would involve follow-ups with the Mint (which refines gold) and its auditors.

“LBMA urges the refiner to provide transparency on the allegations reported in the media and to, in as far as possible, disclose the challenges and identified risks, and how those risks have been mitigated, as well as what further action Perth Mint is taking,” it said in a statement released over the weekend.

It has been reported the Mint has been buying gold from small scale miners in Papua New Guinea that use mercury and child labour.

Mercury is widely regarded to have high health and environmental risks.

The Mint's clients reportedly include PNG company Golden Valley, whose founder Justin Parker was convicted of manslaughter in 2017.

The LBMA review comes after the Mint announced late on Friday that it would initiate an independent review of its own audit processes.

The Mint said its review would also assess arrangements with licensed counterparties, which may deal with Artisanal Small-scale Mining (ASM).

Chief executive Richard Hayes said on Sunday that the Mint welcomed the LBMA review and reiterated his view that the Mint adhered to the highest ethical standards.

“We are vigilant in our assessments of companies from which we source gold and other metals for processing and are confident we fully comply with regulatory requirements and the responsible gold guidelines set out by the global gold industry’s governing bodies,” Mr Hayes said.

The Australian Financial Review reported on Friday that the Mint's compliance regime appeared to lack any substantive investigation and applied only minimal checks.

"I just look at the process," auditor Stephen Rogers told the Financial Review. "That's all that's required."

That followed its initial report on Thursday, highlighting concerns about the Mint’s sourcing and alleging it was dealing in ‘conflict gold’ – a claim the Mint has denied.

The Mint refines more than 90 per cent of Australia’s gold production and also buys substantial volumes from overseas mines.

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