(Yicai Global) March 8 -- The Shanghai Gold Exchange has strenuously denied a report alleging that it received diluted gold bars from Australia’s Perth Mint, saying that the report deviates from the truth and has caused serious damage to the exchange’s reputation.

All related parties should immediately stop violating the Shanghai Gold Exchange's rights, and the exchange reserves the right to take further measures to safeguard its legitimate rights and interests, it said on its website today, without providing further information.

A leaked internal report claimed that Perth Mint sold diluted or ‘doped’ gold bars to China and tried to cover it up, facing a potential USD9 billion recall of gold bars, Australian Broadcasting Corp. reported on March 6.

The mint began the practice of diluting gold bars by adding impurities in 2018, ABC said. The impurities are mainly silver and copper. The report estimated up to 100 tons of gold sent to the Shanghai Gold Exchange potentially did not comply with Shanghai’s strict purity standards for silver content.

While the exchange has challenged the veracity of the report, Yicai Global has learned exclusively that a trader who recently purchased gold ingots from Perth Mint had to pay to have the gold refined and smelted in order to meet the requirements of the Shanghai Gold Exchange.

This is more likely the result of different delivery standards in various countries, and not a ‘doping’ case, an industry insider told Yicai Global. Such incidences have happened before and are difficult to avoid.

The imported gold ingots in this case were standard gold produced by qualified gold ingot suppliers or refineries recognized by the London Bullion Market Association, the person said.

Gold ingots that meet LBMA standards can be circulated in the international gold market, but different countries have different requirements for delivery, he said. The Shanghai Gold Exchange, for instance, has requirements for both gold and impurity content, while the LMBA only requires gold content.

Editor: Xu Wei, Kim Taylor