Weekend Argus (Saturday Edition)
Krugerrand turns 50 this week
Rand Refinery workers produce thousands of coins to meet demand
EMPLOYEES at the Rand Refinery in Germiston are working endlessly to meet their targets.
Before the end of the day they must ensure 9 000 blank gold Krugerrands are produced before they are transported to the South African mint for minting.
“Krugerrands are made on demand but there is always a high demand for these coins, so we are producing thousands each day,” an employee on the refinery floor remarks.
This week the employees at Rand Refinery have been especially busy. They have been inundated with orders for Krugerrands, as this week marks the 50th anniversary since the launch of the highly sought after coin. Limited edition coins are being made available.
“We’re producing around 4 500 Krugerrands during each work shift, and this is all based on demand, so we are very pleased,” said the Rand Refineries employee, who could not be named.
Since the launch of the Krugerrand in 1967, more than 53 million ounces of gold (more than 60 million pieces) have been sold in the form of Krugerrands, more than its closest competitors, the Canadian Maple Leaf and the US Eagle.
The Krugerrand, containing one ounce of gold, has become an iconic symbol of South Africa.
Rather more crucially, it has been a pretty sharp investment. In 1967, a Krugerrand would have cost you R32. Today, it costs R17 000 – a compound growth rate of just over 14% a year.
It seems unimaginable now, but back in 1967 when the Chamber of Mines, SA Reserve Bank and Rand Refinery joined forces to launch the Krugerrand, nothing like it existed.
“The intent was to create a gold product that the ‘man in the street’ anywhere in the world could legally own,” says Praveen Baijnath, the chief executive of Rand Refinery.
Baijnath adds that the purpose of introducing the Krugerrand was to add value to South Africa’s gold production, which averaged 75% of the total global output between the 1960s and early 1970s.
“It was the earliest form of beneficiation of South African gold.”
The first 22 carat gold Krugerrand was manufactured on July 3, 1967, making this year its 50th birthday.
To commemorate the golden jubilee year, the SA Mint has launched limited edi- tion, collectible Krugerrands, and the flagship offering in the anniversary range is the giant 50 ounce gold coin, 50 times as big as the standard 1oz gold Krugerrand. Only 55 coins are available for purchase.
There will also be once-off limited edition collectible Krugerrands that are being offered in platinum and silver. “The 50th anniversary is quite significant because it’s the first modern bullion coin to reach that milestone,” says Richard Collocott, the executive head of marketing. This year, adds Collocott, will be the biggest year since the 1980s, that they have seen an increase in demand for Krugerrands.
“The year hasn’t finished but sales are already 15% to 20% higher compared to last year.
“We’ve seen an increase in demand for gold in SA, as well as on the international side, taking some market share from our competitors.”
Will Krugerrands ever go out of fashion? “We think about this every day, but so far it hasn’t happened.”
“As long as there is a demand for physical gold, the Krugerrand will always do well, because of its investment value, and its tradability, it remains a significant player in that part of the gold market.”