ZAR vs. Mandela vs. Kruger RandsIf you’re new to coin collecting, either for investment purposes or as a hobby, you’ll know that thereare many different types and series of rare coins that you could choose to start collecting.Sometimes, it’s confusing to know just where to begin. Added to this, without the right informationavailable, you might not know which of these coins would best suit your investment needs. Even ifyou are only pursuing it as a hobby, you want coins that are going to add definite value to yourcollection over time.Over the past decade, gold coins and rare coins in particular have become increasingly popular withinvestors and collectors. They are tax free when sold, their mintage is lower than modern coins, andthe ability to find them in a good or even reasonable condition has become much harder, which inturn adds to their rarity value. In fact, over the past nine years rare coin values have increasedbetween 23-68% per annum, proving that they are gaining increasing credibility in the investmentcommunity.With this in mind, we look at the differences between three South African coin types that are mostpopular amongst collectors and investors: ZAR coins, Mandela Coins and Kruger Rands.
ZAR COINSAlso known as Kruger coins, these are the first real coins of South African and were minted between1892 and 1902. The 1892 series are considered to be one of the most popular series, due to the factthat the coins were printed with two glaring errors that effectively insulted the heritage and historyof South Africa as well as the reputation of President Kruger.The first error was the incorrect depiction of a South African Voortrekker ox-wagon. Instead, aContinental wagon, which had a double shaft and front and rear wheels of similar size, was stampedon the coins. A South African ox-wagon traditionally had only a single shaft, and its rear wheels werelarger than the front wheels. The second error came about when the designer Otto Shultz stampedhis initials ‘OS’ on the obverse of the coin on President Kruger’s bust. Whilst this in itself is acustomary procedure, the word OS is the Dutch word for ox and this was seen as a great insult to thegovernment and president, who was preparing to campaign for a second election.The coins were immediately recalled and President Kruger went on to narrowly win his election, butthe errors on the coins resulted in them gaining immediate value and not all of them were handedover. As many of these coins were hoarded soon after mintage, it’s possible to find them in verygood condition, although it’s not often that these specimens come onto the market.Today, rare coins such as the ZAR coins are considered collectibles and are not eligible for capitalgains tax when sold, making them a hugely attractive investment asset.
KRUGERRANDSThe first South African Krugerrand gold coin was manufactured in 1967 and was the first gold bullionof its kind in the world. Today, there are more Krugerrands in circulation worldwide than all othergold coins combined, with some estimates putting this number at over 54 million coins. Other well-known gold coins include the Canadian Maple Leaf and the American Eagle.In South Africa the Krugerrand is considered legal tender and although the coins don’t bear anycurrency denomination, they are stamped with the amount of gold that it contains. For this reason,the Krugerrand can be found in four sizes, 1oz, 1/10oz, 1/4 oz and 1/2oz. The coin’s value is basedpurely on the intrinsic value of the metal that it’s manufactured from, therefore if the price of goldincreases or decreases so does the value of the coin. Interestingly, although Krugerrands have beenminted since 1967, the importation of the coin into the US was banned in 1984 by Congress, due toSouth Africa’s infamous Apartheid status. This boycott was subsequently lifted in 1994; the sameyear that South Africa held its first Democratic elections.While Krugerrands are undoubtedly valuable and hold strong historical significance, they areunfortunately eligible for capital gains tax when sold, which can be as much as 20% in some cases.
MANDELA COINSUncirculated Mandela coins have been known to fetch hundreds of thousands and even millions ofrands when sold privately and through auction. These versions are of course incredibly hard tosource and their low mintage figures and the fact that they are struck using precious metal add totheir exceptional value. Undoubtedly, if are in a position to purchase one of these coins, it would bea sound investment as their value is set to increase even more in time.Circulated versions however are plentiful, as millions of them have been minted and for this reasonthey are not considered to be rare. Their value lies in people’s understandable appreciation andrespect for Nelson Mandela and in time his legacy will help these coins gain value. Currentlyhowever, there is a high supply of circulated Mandela coins and a relatively low demand. Added tothis, with modern coins there is always the chance that the mint could manufacture more, whichlowers the value of the coin and further dilutes the market.For more information on rare South African coins, or to source you’re the ideal investment coin foryour collection or portfolio, visit the South Cape Coins website: http://www.southcapecoins.co.za