South African coins add to a diverse and valuable coin portfolio. We look at the difference between investing in ZAR coins, Mandela Coins and Kruger Rands.

1. 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.

2.  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.

3.  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.

4.  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