The Shanghai Gold Exchange (SGE) on Wednesday denied Australian media reports that it was sold “doped” gold bars by Australia’s official bullion mint.
The denial followed a report by Australia’s national broadcaster ABC News that Perth Mint, the world’s largest processor of newly mined gold, may have to recall a potential $9 billion worth of 1-kg diluted gold bars sold to China.
“The relevant media failed to fulfil 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,” the exchange said in a statement on its website.
SGE added that it reserved the right to take further action to protect its reputation and safeguard its legitimate rights and interests.
The ABC’s investigative journalism program Four Corners reported on Monday the government-owned mint sold an approximate 100 tonnes of gold to the SGE, which “potentially did not comply with Shanghai’s strict purity standards”.
Citing “uncovered documents” and “insiders”, the report said Perth Mint began doping its gold in 2018 to save costs and that the SGE flagged two of its bars in 2021 for “too much silver” content.
The mint then proceeded to conduct internal investigations in the matter and found evidence that “most of the gold bars” produced in the three years did not match SGE’s standards, the report said. Perth Mint did not share that information with SGE, its largest client, the report added.
The SGE, meanwhile, decided to withhold making its complaint public and accepted the mint’s promises regarding quality, ABC News said.
Perth Mint said on Tuesday that there was no question about the value and purity of gold bars it has sold to customers in China, after it implemented new procedures following a review of its refining practices 2021.
“Doping”, or “alloying” is an industry wide accepted practice to minimise the amount of pure gold above the 99.99% purity level in each bar.
China, the world’s largest gold consumer, consumed approximately 1,002 tonnes of gold in 2022, a fall of 10.63% over the same period over 2021, according to China Gold Association.
Meanwhile, China produced a total of about 498 tonnes of gold in the past year, posting a year-on-year rise of 12.24%, China Gold Association said.
- Reuters, with additional inputs from Vishakha Saxena