silberinfo’s exclusive interview with the The Perth Mint of Australia provides some interesting insights into one of the world’s largest Mints.
Ron Currie, Sales and Marketing director of The Perth Mint, answers a bevy of company and coin product questions, including why they’re able to keep up with bullion demand while Mints like the US have had to cut production of several gold coins.
Reprinted by permission, here is the www.silberinfo.com exclusive interview:
silberinfo:
Please tell us something about the legal form of your company and who is ‘in the driver’s seat’?
Perth Mint:
Gold Corporation was created by the Western Australian Government under the Gold Corporation Act 1987 to take over the operations of The Perth Mint and launch Australia’s official bullion coin program.
The Board of Directors of Gold Corporation comprises ten members under the chairmanship of Ross Bowe, the former Under Treasurer of Western Australia.
Ed Harbuz was appointed Chief Executive Officer of Gold Corporation on 1 July 2003. Mr Harbuz is a previous Managing Director of the South African Mint Company Pty Ltd. He holds a Master of Business Leadership from the University of South Africa and a BSc (Engineering Electrical) from the University of Natal.
silberinfo:
How many people are employed by the Perth Mint? Do you have a shift operation in place in your production facilities?
Perth Mint:
As at 30 June 2007, there were 198 staff at Gold Corporation/The Perth Mint.
Yes, shift operations are a feature of The Perth Mint’s production facilities.
silberinfo:
Understandably, our readers are mainly interested in bullion coins. From 1986 until 1989 the nugget was minted, which then was replaced by the Kangaroo series. What are the reasons for this?
Perth Mint:
Australian Nugget gold coins issued between 1986 and 1988 portrayed images of famous Australian nuggets by Stuart Devlin. Both bullion (investor) and proof (numismatic/collector) versions were produced.
In the highly competitive numismatic market, originality and innovation is essential. Once the Nugget name had become widely known, the opportunity arose to initiate a change that would create new interest in the coins and ensure that international sales maintained momentum.
A new design theme featuring kangaroos was approved by Australian Treasury, initially for the 1989 Proof Issue and subsequently bullion Nuggets followed suit.
The selection of a new theme, featuring a symbol as internationally popular and recognisable as the kangaroo, proved timely and appropriate for Australia’s official gold coin.
silberinfo:
The first Lunar series is very popular in Germany. The production was stopped – will there definitely no more restrike mints?
Perth Mint:
I can confirm that The Perth Mint has no plans to restrike any coins from the Australian Lunar Silver Bullion Coin Series I.
silberinfo:
Are you convinced that the Lunar series II can repeat the success of the first series?
Perth Mint:
Yes. We launched the Australian Lunar Bullion Coin Series II in 2008 after consultation with major clients. The first release, with designs celebrating the Year of the Mouse, has achieved success, particularly in Asia where the theme is very popular, and also in North America and Europe.
The 99.9% pure silver Australian legal tender program offers appealing new reverse artistry. The coins also continue The Perth Mint’s unique market strategy of offering bullion coins with restricted mintages, which creates the potential for even greater investment return in the form of a numismatic premium.
silberinfo:
There are Silver Lunar Coins with 10kg weight. Are those coins handcrafted for a big part, respectively how many of this kind of coins can be produced with an according demand?
Perth Mint:
Previously, 10kg Silver Lunar coins, which are quite tricky to make, were produced on coin engraving machines. We have recently taken delivery of and commissioned a new 1,600 tonnes press, which gives us greater manufacturing capacity with zero loss of quality.
The capital investment was made under our flexible manufacturing strategy, which is designed to allow us to allocate machinery easily to the products in greatest demand. We are now in an even better position to switch production resources at short notice.
silberinfo:
Normally, collectors are upset if coin series are not complete. For example the ½ ounce Lunar Silver Coins, which were available only for certain years, ort he 2 ounce Gold Lunars, which have been introduced only in the year 2000. What is the reason for this somewhat inconsistent release policy?
Perth Mint:
There is nothing sinister happening here. Rather, it represents our response to demand for particular designs and denominations from large clients, particularly in Asia.
silberinfo:
Since 2007, the koala is also minted in Silver. Which thoughts lead to its release?
Perth Mint:
The launch of the Silver Koala in parallel with the Silver Kookaburra was prompted by North American investors who do not see the kookaburra as symbolic of Australia. The truth is, many in the US say the kookaburra looks like a kingfisher – indeed the birds are part of the same family. The koala, on the other hand, is unmistakably Australian. The decision has proved to be inspired, with investors all over the world reacting very positively to the Silver Koala design theme.
silberinfo:
Until a short time a go, the koala was the symbol fort he Platinum series of the Perth Mint, like the nugget fort he Gold coin series ort he Kookaburra fort he Silver Coin Series. Isn’t it problematic to suddenly change this policy now with the Koala?
Perth Mint:
Not at all, because we have moved out of the platinum investor coin market. We still wanted to use the iconic koala design theme, so it made sense to employ it on a new silver program, particularly in the light of the kookaburra/kingfisher confusion in the United States.
silberinfo:
What is the reason for the production stop of the Platinum-Koala and the Palladium Emu?
Perth Mint:
We saw decreasing customer demand for these programs in response to the fluctuation in the price of platinum and palladium. We also had to take into account the economics of producing small quantities of these coins.
silberinfo:
Last year, suddenly Emus from 98 showed up in Germany, and after some confusion, it was found out, that it was a backdated restrike of this Palladium coin by the Perth Mint. 1998, the minting limit was not achieved. What is the reason for the decision to finally mint the coin, and why doesn’t the Perth Mint release a new Palladium Bullion Coin? It seems, that the Canadian Mint is quite successful with their new Palladium Maple Leaf…
Perth Mint:
We were asked to test the market when the price of palladium began to settle, but the level of demand for our re-strikes still meant we were unable to justify re-launching the program. However, we will certainly review this area when market conditions once again become more favourable.
silberinfo:
The Kookaburra is a success story. Can we assume that it will be minted for many years to come?
Perth Mint:
Undoubtedly. The Silver Kookaburra has a strong pedigree since 1990 and a loyal following from investors in Australia and many other parts the world.
silberinfo:
There is a big demand for the „bullion coin“/bar „Cook Islands“ with a face value of AUD 30 in Germany, because of the low value added tax. When the Perth Mint released it, did they target specifically the German market? And where came the idea from?
Perth Mint:
The program you refer to was a custom minting project we undertook for a large German distributor. In that respect, the program was struck specifically for the German market. The Perth Mint’s proprietary Kilo silver coins are also very successful in Germany.
silberinfo:
Do you plan to mint Silver Coins with new themes like a duckbill, a crocodile or a wombat?
Perth Mint:
There are no current plans to strike silver bullion coins featuring designs other than those already in existence.
silberinfo:
Australia has rich silver deposits. How is the sentiment of Australians regarding investments in Silver?
Perth Mint:
It is undeniable that Australians have enjoyed the tremenedous run that silver has experienced during the past few years. Sentiment remains positive, but Australia’s mineral wealth, including gold, diamonds and other precious resources, provide many investment opportunities that are vying for their attention.
silberinfo:
Our readers are interested, how big the export ratio of the Perth Mint is, and which countries top the statistics?
Perth Mint:
Up to 80% of The Perth Mint’s precious metal coin and blank production is exported. Europe, Asia and America are our major overseas markets. During the past financial year, we sold in excess of 3 million ounces of silver bullion in Europe, more than doubling the amount exported in the previous 12 months.
silberinfo:
Which product of the Perth Mint has been the fastest seller in the last 3 years?
Perth Mint:
The Australian Koala Silver Bullion Coin Series.
silberinfo:
Some weeks ago, we conducted an interview with the United States Mint; they mentioned a huge demand, which lead to a shortage in the delivery of Silver rounds. Could problems of this kind be imaginable at the Perth Mint too, if the demand stays that way or grows bigger?
Perth Mint:
It is more straightforward for The Perth Mint because we manufacture our own precious metal blanks, as well as blanks for several other leading mints. You could say that our destiny is in our own hands on this issue.
silberinfo:
We assume that the demand for bullion products as an investment will grow substantially. How is the capacity for the production of the bullion coins? Regarding the present high demand, the question arises, if it can be extended?
Perth Mint:
Yes, it is a fundamental challenge faced by every manufacturing business. I have addressed this issue in a previous question by mentioning the introduction of our latest 1,600 tonnes press and alluding to our flexible manufacturing policy. Let me assure your readers that The Perth Mint is highly attuned to the question of capacity in a booming market and we have developed strategies that allow us to re-assign resources quickly to prevent production bottlenecks.
silberinfo:
The volatility of the Silver price is big by way of comparison. How do you feel that in the buying pattern?
Perth Mint:
As the price of silver increases, we generally see greater demand for silver bullion coins, particularly when there is expectation that the price has some way to run. The opposite is true when prices are falling. However, silver will always remain important to investors as a way of spreading risk in uncertain times. Our coins are universally recognised as a cost-effective means of purchasing silver bullion in the form of official legal tender. In our experience, these factors tend to smooth the demand line.
silberinfo:
It is known of the US Mint that they must cover their Silver demand from domestic sources only. Where does the Perth Mint obtain their precious metals from?
Perth Mint:
The Perth Mint’s strategic objective is to add value to Australian precious metals for export. It is part of our mandate, therefore, to prioritise the use of Australian gold and silver – the vast majority of which is mined in our home State – Western Australia. We are a partner in AGR Matthey, so we acquire Australian precious metal from what is effectively our own refinery here in Perth. However, when business conditions make it necessary, we are prepared to purchase precious metals in the market to ensure continuity of product supply.
silberinfo:
Do you mind buying the Silver that it is produced in mines which adhere to high environmental and social standards? What is the position of the Perth Mint regarding a certification system that warrants this?
Perth Mint:
As one of the world’s leading resources countries, Australia has stringent environment and safety protection legislation for mining at both Federal and State levels. Consequently, we are content that the mining of gold and silver in Australia fully satisfies the standards you mention.
silberinfo:
There are rumours about a possible shortage in the wholesale trade. Do you want to comment on them? Do you presently see difficulties to cover your demand?
Perth Mint:
It is helpful to understand that it satisfies the needs of speculators to feed such rumours. The Perth Mint does not believe that there is any real shortage of supply in the wholesale trade.
silberinfo:
Mr. Currie, we thank you for your kind answers and wish you and the Perth Mint all the best for the future.
When was the first Koala 1-kilo silver coin minted?? 2007? 2008?
Robert, the silver Koala was introduced in 2007.