A new pure-silver Krugerrand has been issued to commemorate the fiftieth anniversary of the first gold Krugerrands being issued in 1967. From 1967 to 1970, the Krugerrands were produced mainly for collectors, but they became so popular that, in 1970, the South African Mint started mass-producing them.
The idea of the mass production of Krugerrands in 1970 was that, at that time, it was legal for ordinary citizens to own gold bullion. Usually, people are not allowed to own gold in bullion form or in unwrought form.
So, you are not allowed to own pieces of gold, such as old gold jewellery, which has been cut up into bits. To own such bits of gold, you need to have the required licence, such as the licences that jewellers have.
But a Krugerrand is legal tender in South Africa. So, you can actually go into a shop and buy shoes or groceries with one. Although it is called a ‘rand’, it has no rand value marked on it and its legal tender value is the value of the gold price at the time that you spend it – on shoes or groceries, for example. It would be interesting to know if anyone has ever offered a Krugerrand to a shop for purchases.
A Krugerrand is guaranteed to be exactly one ounce of pure gold. The South African Mint is so respected internationally that people all over the world now hold Krugerrands with confidence. There are now 60-million in various hands all over the world, and the Krugerrand is the world’s most traded gold bullion coin.
In actual fact, a Krugerrand is 11/12 24 ct gold and 1/12 copper. The copper is necessary to ensure that the coin is not too soft to handle. Pure gold would be too soft. Nevertheless, the 11/12 of gold equals one fine ounce of gold, so the value of the coin is equal to the international gold price at any time.
The front of a Krugerrand, the obverse side, bears a picture of Paul Kruger, President of the old Transvaal Republic. This comes from the design of the first-ever circulation coins in South Africa, which were issued in 1892, bearing the image of Kruger. The die used to produce those coins was made by master diemaker Otto Schultz. When the Krugerrands were designed, the original image produced by Schultz was improved a bit and then used for the modern Krugerrand.
The image of the prancing springbok on the reverse of the Krugerrand was produced by renowned artist Coert Steynberg. It was originally designed for a commemorative five-shilling coin produced in 1947 for the British Royal Visit to South Africa. All Krugerrands carry the initials CS for Steynberg.
Interestingly, by law, only the South African Mint can produce Krugerrands and all of them have been produced there. Further, all the gold used to produce Krugerrands comes only from the Rand Refinery, which is the largest precious metals refinery in the world and has refined about one-third of all the gold ever mined in the world.
I have visited the refinery more than once and it is most interesting. When I was walking along and got a piece of metal stuck in my shoe, I looked at it; it was gold. I pulled it out and my host said: “Just throw it away, anywhere on the floor, preferably some distance away.” It felt quite odd to just throw a piece of gold away, as one would throw away a bubble gum stuck to one’s shoe. He explained that the security cameras were probably watching us, and it was best to clearly throw the gold some distance so that I did not look as if I could be dropping it into my shoe.
The silver Krugerrands are really beautiful. I handled one and took photos of it. Pure silver does not tarnish, so the coins do not come sealed in plastic boxes. You just handle them like any coin. Silver is the best electrical conductor, followed by copper and gold and then aluminium and, surprisingly, calcium, the metal needed by your teeth and bones.
Silver has a lightly bound single lonely electron, which provides for the easy electrical conductivity. But the next electron shell down is very difficult to dislodge, so silver is chemically not very reactive at all. That is why pure silver does not tarnish. A chemical like Bromine is very aggressive and will react with silver, and that was the basis of silver bromide in early photography.
Anyway, I think that the new silver Krugerrands are beautiful, and they sell for around R600, much less than the many thousands for a gold one. So, I think that they will sell really well.