What Value Has A Mandela Collectible Coin?

I just found this interesting article written by Erin and Isabel. They speak about the values of Mandela gold coins and how not every Coin with Mandela on will make you rich...

What Value Has A Mandela Collectible Coin?
By: Erin-And-Isabel
Friday, 8 February 2008
As I was leaving the recently renamed Oliver Tambo airport in Johannesburg last month, I couldn t help noticing an advert for a new gold coin. Now
we re familiar with South Africa s gold Krugerrand. Allegedly it is one of the top 300 brands in the world. Krugerrands were the first 1oz gold coin to
be produced - but that was back in 1967. Of course, the Krugerrand has the head of President Paul Kruger on one side, and a leaping springbok on the
other.
But this coin, which was advertised all over the airport I might add, was not a Krugerrand.
A lot has happened in South Africa since 1967, not least the release of Nelson Mandela from prison in 1990. Now some would say Mr Mandela s
release was down to the vision of South Africa s then white Afrikaans president, FW de Klerk. Others would disagree, arguing that Mr De Klerk s
actions were not visionary but necessary. Personal opinions aside, the two men were jointly awarded the Nobel Peace Prize in 1993 for their
contribution to democracy in South Africa.
Mandela coins certainly generate interest
This brings me to the shiny gold coin advertised at OT airport. It is called the Mandela/De Klerk medallion and is a oz 24 carat gold coin that is part of
the Nobel Peace prize commemorative medallion programme.
Needless to say, one side sports the head of the iconic Nelson Rohlilala Mandela with the inscription "A long walk to Freedom." The other depicts
that of Frederik Willem De Klerk and is inscribed with the words "To bring justice to everybody". The good news is the coin, which was minted in
Norway, has been given the nod of approval by the Nobel Institute and the Nelson Mandela Foundation.
This 1oz gold coin and variations on the Mandela theme are now actively marketed by the South African Gold Coin Exchange. There are other
Mandela coin productions too, in varying weights, but no pure De Klerk medallions! Just for the record, the Exchange is currently South Africa s
biggest distributor of gold investment, bullion and collectable coins. And its current chairman Alan Demby has strong views on coin collecting.
Well, surprise surprise, the cynics ( Erin included!) among you might say. "Be careful with coins," Erin says. "Many of them are a rip-off, bearing little
relationship to gold, and have large spreads in the buy/sell price so that getting in and getting out is not that profitable!"
But Mr Demby claims to have a close eye on who is buying gold coins. In his view smart investors have 10 to 20% of their investment portfolio in
coins. Around 70% of that should be in Krugerrands or sovereigns, the remaining 30% in collectible coins (coins that are of interest to collectors
rather than gold bugs). Mr Demby also says that there has been huge interest from around the world in the 1oz Mandela commemorative coins. They
currently sell for around $2,500 (edit jb)
It goes without saying that this is not the first time that Mandela s head has appeared on a coin. The Presidential Inauguration Medallion was minted
in South Africa in May 1994 and has become pretty sought after by coin collectors, according to Mr Demby.
But not one is a winner...
So does a Mandela image on a coin always equate with financial rewards? The seemingly obvious answer is that all coins sporting a Mandela bust will
become increasingly valuable with time. After all this is an iconic man revered as one of history s most extraordinary men. Right?
Well, one South African coin dealer had a fine old time spinning this yarn. It put out a statement claiming that "all legal tender coins with a Mandela
theme have shown the highest rates of financial performance in the shortest period of time". Back in 2006 this dealer started a marketing campaign for
the Mandela ZAR inauguration coins. An advertisement on its website claimed that one of these coins had sold for a staggering R100,000 ($15,000)!
That equates with a1.9m percentage rise in value in just six years!
What the advert didn t say was that this happened to be a proof coin rather than a coin you might find in your purse. A proof coin is an early sample
of a coin issue - this used to be done to check things like dyes but now more are struck for the purposes of coin collectors (otherwise known as
numismatists). You will never find a proof coin in circulation.
Predictably this dealer was rapped over the knuckles for a misleading advertising. The man on the street might be led to believe that any old coin with
Mandela s smiling face on it might sell for ZAR 100,000. And that is simply not true.
According to figures from the SA Mint in 2000 5.2 million Mandela ZAR5 coins were issued. At the end of 2003, due to a shortage of the coins, a
further 1.024 million Mandela coins were struck. But only a few thousand were sold as "proofs"
If the law that rarity makes a coin a "collectible" applies, then the circulating Mandela coins have no great intrinsic value. But that hasn t stopped
many people hanging on to them.
There is a simple rule to apply when buying collectible coins. The fewer there are, the rarer they are - and the more likely they are to appreciate. Add to
that the face of one of the world s most iconic men and there is a chance of a winning formula.
If this floats your boat, the limited edition Nobel Prestige Set with two 1oz gold coins and one 1oz silver coin may be for you. Only 1500 have been
minted around the world, so these are considered to be scarce Mandela coins. This set is currently selling for 42,000 (+/-$4,300)(edit jb).
Happy collecting,
Erin and Isabel