S A COIN

FROM THE PUBLISHERS OF THE STANDARD CATALOG OF WORLD COINSVol. 36, No. 2 U.S. $3.95/Canada $5.95

February 2009

Mandela continues to be profitable coin subjectBy Chris Wolterman

www.sacoin.co.za or info@sacoin.co.zaS A COIN BUILDING, 13 POLO CRESCENT, WOODMEAD OFFICE PARK,

VAN REENEN AVENUE, WOODMEAD 2157.

Tel: (011) 808-0300 Fax: (011) 808-0400R

The Mandela 90th birthday R5 is exciting in itself, regardless of the potential to profit from it.It honours a statesman whose reputation is unsurpassed by those of his contemporaries around the globe.

The South African Mint’s 2008 5 rand coin commemorates the 90th birthday of NelsonMandela. Its fine details makes MS-68 examples, valued at $10,000, hard to come by.

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How did it happen that unpretentiousbusiness strikes of a common coin, onewith a mintage of 5 million pieces,became $10,000 numismatic superstarsless than five months after the coinbegan circulating? This is not a trickquestion, nor does its answer involvemint errors or rare die variations.

The coin is South Africa’s 2008 5rand commemorating former presidentNelson Mandela’s 90th birthday. Re-leased into circulation on July 18, 2008,many of the coins soon appeared in theoffices of Professional Coin GradingService and Numismatic Guaranty Cor-poration, two graders favoured by SouthAfrican collectors.

As I write in mid-December, only sixexamples have been graded as high asMS-68, all by PCGS. Three of theserecently sold for R100,000, or aboutUS$10,000, per coin.

A partial explanation for this pricelevel lies in the coin’s theme. EverySouth African Mint product associatedwith Mandela enjoys extraordinary pop-ularity in South Africa and, to agrowing extent, around the world.

The 90th birthday issue joins a familyof similar coins, namely, the 1994Mandela presidential inauguration R5and his post-presidential 2000 R5,whose rates of appreciation in thenumismatic market make them topperformers globally. Of all coins everminted anywhere, the 2000 R5 has thesteepest curve of increasing prices. Noother coin comes close.

South Africans have been hoardingthe new R5 since July 18. Anticipatingthis behaviour, the South African gov-ernment tried to forestall it. ReserveBank Governor Tito Mboweni andFinance Minister Trevor Manuel practi-cally begged the public to keep the coin

in circulation. Of course, South Afri-cans didn’t comply.

The resulting hoards have an impor-tant bearing on the value of MS-68 ex-amples. High percentages of the totalnumber of coins minted remain uncircu-lated or almost uncirculated. Thispermits numismatic experts to discernthe extreme rarity of superb businessstrikes.

An inordinately small proportion ofsuperlative pieces emerged from themint. We arrive at the root cause of the$10,000 price tag for MS-68 specimenswhen we understand why the SouthAfrican Mint, whose technical prowessis world class, didn’t produce a greaterquantity of nearly perfect coins.

The coin’s planned intricacies and thetechniques required to execute themwere challenging. Like mints in the U.S.and Canada, the South African Mintproved unable to devote the resourcesnecessary to master these challengesand produce consistently excellent‘‘mere’’ business strikes. To have doneso would have been prohibitively expen-sive.

A bimetallic coin, the Mandela 90thbirthday R5 entailed more difficultstrikings than would have been the caseif planchets of uniform alloy had beenused. The South Africans resorted tothe bi-metallic planchets – brass-platedsteel centres with nickel-plated copperrings – that they had introduced for theirR5 in 2004. Moreover, and in contrastto the 1994 and 2000 Mandela R5s, the2008 coin was designed with a quantumleap of finer detail.

This is especially evident on thecoin’s reverse (what American’s wouldcall its obverse) where Mandela’s bustdominates the centre. In the ring andradiating from the centre on bothMandela’s right and his left are incred-ibly minute renditions of the letters‘‘SARB’’, standing for the SouthAfrican Reserve Bank. Mint employeessurely suffered fits trying to keep thistiny lettering sharp.

Fine detail also appears on the ob-verse where the South African coat ofarms is markedly more elaborate thanthe wildebeest design of 2000.

To my mind, the coin’s most demand-ing feature is its reeded edge with asecurity groove bifurcating the reeding.

Inside the security groove appear re-peated incuse runs of the letters ‘‘SARBR5’’, denoting the reserve bank and thecoin’s denomination.

Getting all of this right and mintingreasonably attractive business strikesmakes the paucity of MS-68 pieces un-surprising. Collectors should feel grate-ful that there are any such examples.

Price differentials attest to the scarcityof the MS-68s. Whereas three of thesehave fetched R100,000 apiece, the rela-tively common MS-65 routinely retailsfor R750, about $75.

The Mandela 90th birthday R5 is ex-citing in itself, regardless of the poten-tial to profit from it. It honours astatesman whose reputation is unsur-passed by those of his contemporariesaround the globe. His coins will con-tinue to be coveted collectibles.

Perhaps the 90th birthday coin willprove more popular than the famed2000 Mandela R5. I entertain this suspi-cion because of a consideration thatmost South Africans probably take forgranted and non-South Africans areprone to ignore.

Study carefully both sides of the coin.Notice the absence of the words‘‘SOUTH AFRICA.’’ The English-language name of the country isn’tpresent on all of its coins. South Africahas 11 official languages, and the mintrotates their use on coins.

Two minority languages grace Man-dela’s 2008 R5. There’s ‘‘AFRIKABORWA’’ in Sepedi / Sesotho and‘‘SUID-AFRIKA’’, in Afrikaans. Thelatter language is the preferred tongue ofthe majority of South African whites.Although they had feared the end ofapartheid, they’ve lauded Mandela’smagnanimity in transcending its legacy.The prominence of their language on his90th birthday coin is fitting and equallyironic.