ZAR vs. Mandela vs. Kruger Rands

If you’re new to coin collecting, either for investment purposes or as a hobby, you’ll know that there

are 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 information

available, you might not know which of these coins would best suit your investment needs. Even if

you are only pursuing it as a hobby, you want coins that are going to add definite value to your

collection over time.

Over the past decade, gold coins and rare coins in particular have become increasingly popular with

investors and collectors. They are tax free when sold, their mintage is lower than modern coins, and

the ability to find them in a good or even reasonable condition has become much harder, which in

turn adds to their rarity value. In fact, over the past nine years rare coin values have increased

between 23-68% per annum, proving that they are gaining increasing credibility in the investment

community.

With this in mind, we look at the differences between three South African coin types that are most

popular amongst collectors and investors: ZAR coins, Mandela Coins and Kruger Rands.

ZAR COINS

Also known as Kruger coins, these are the first real coins of South African and were minted between

1892 and 1902. The 1892 series are considered to be one of the most popular series, due to the fact

that the coins were printed with two glaring errors that effectively insulted the heritage and history

of 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, a

Continental wagon, which had a double shaft and front and rear wheels of similar size, was stamped

on the coins. A South African ox-wagon traditionally had only a single shaft, and its rear wheels were

larger than the front wheels. The second error came about when the designer Otto Shultz stamped

his initials ‘OS’ on the obverse of the coin on President Kruger’s bust. Whilst this in itself is a

customary procedure, the word OS is the Dutch word for ox and this was seen as a great insult to the

government 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, but

the errors on the coins resulted in them gaining immediate value and not all of them were handed

over. As many of these coins were hoarded soon after mintage, it’s possible to find them in very

good 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 capital

gains tax when sold, making them a hugely attractive investment asset.

KRUGERRANDS

The first South African Krugerrand gold coin was manufactured in 1967 and was the first gold bullion

of its kind in the world. Today, there are more Krugerrands in circulation worldwide than all other

gold 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 any

currency 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 based

purely on the intrinsic value of the metal that it’s manufactured from, therefore if the price of gold

increases or decreases so does the value of the coin. Interestingly, although Krugerrands have been

minted since 1967, the importation of the coin into the US was banned in 1984 by Congress, due to

South Africa’s infamous Apartheid status. This boycott was subsequently lifted in 1994; the same

year that South Africa held its first Democratic elections.

While Krugerrands are undoubtedly valuable and hold strong historical significance, they are

unfortunately eligible for capital gains tax when sold, which can be as much as 20% in some cases.

MANDELA COINS

Uncirculated Mandela coins have been known to fetch hundreds of thousands and even millions of

rands when sold privately and through auction. These versions are of course incredibly hard to

source and their low mintage figures and the fact that they are struck using precious metal add to

their exceptional value. Undoubtedly, if are in a position to purchase one of these coins, it would be

a 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 reason

they are not considered to be rare. Their value lies in people’s understandable appreciation and

respect for Nelson Mandela and in time his legacy will help these coins gain value. Currently

however, there is a high supply of circulated Mandela coins and a relatively low demand. Added to

this, with modern coins there is always the chance that the mint could manufacture more, which

lowers 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 for

your collection or portfolio, visit the South Cape Coins website: http://www.southcapecoins.co.za