How did it happen that unpretentious business strikes of a common coin, one with a mintage of 5 million pieces, became $10,000 numismatic superstars less than five months after the coin began circulating? This is not a trick question, nor does its answer involve mint errors or rare die variations.
The coin is South Africa’s 2008 5 rand commemorating former president Nelson Mandela’s 90th birthday. Released into circulation on July 18, 2008, many of the coins soon appeared in the offices of Professional Coin Grading Services and Numismatic Guaranty Corporation, two graders favored by South African collectors.
As I write in mid-December, only six examples have been graded as high as MS-68, all by PCGS. Three of these recently sold for R100,000, or about US$10,000, per coin.
The South African Mint’s 2008 5 rand coin commemorates the 90th birthday of Nelson Mandela. Its finr detail makes MS-68 examples, valued at $10,000, hard to come by
A partial explanation for this price level lies in the coin’s theme. Every South African Mint product associated with Mandela enjoys extraordinary popularity in South Africa and, to a growing extent, around the world.
The 90th birthday issue joins a family of similar coins, namely, the 1994 Mandela presidential inauguration R5 and his post-presidential 2000 R5, whose rates of appreciation in the numismatic market make them top performers globally. Of all coins ever minted anywhere, the 2000 R5 has the steepest curve of increasing prices. No other coin comes close.
South Africans have been hoarding the new R5 since July 18. Anticipating this behavior, the South African government tried to forestall it. Reserve Bank Governor Tito Mboweni and Finance Minister Trevor Manuel practically begged the public to keep the coin in circulation. Of course, South Africans didn’t comply.
The resulting hoards have an important bearing on the value of MS-68 examples. High percentages of the total number of coins minted remain uncirculated or almost uncirculated. This permits numismatic experts to discern the extreme rarity of superb business strikes.
An inordinately small proportion of superlative pieces emerged from the mint. We arrive at the root cause of the $10,000 price tag for MS-68 specimens when we understand why the South African Mint, whose technical prowess in world class, didn’t produce a greater quantity of nearly perfect coins.
The coin’s planned intricacies and the techniques required to execute them were challenging. Like mints in the U.S. and Canada, the South African Mint proved unable to devote the resources necessary to master these challenges and produce consistently excellent “mere” business strikes. To have done so would have been prohibitively expensive.