The R5 coins with the face of former president Nelson Mandela have a special nostalgic appeal, and the most recently issued one was to celebrate his 90th birthday in 2008.
But would you believe it if you were told that one of these 90th birthday coins sold for R2.5 million? Others sell for anything between R50 000 and a couple of thousand rands.
These, remember, are simply R5 coins. There is nothing special or rare about them – more than 22 million were issued by the South African Mint.
When the coins return to South Africa, each is encapsulated in a Perspex slab that shows which company graded it and what grading it was given. This process is also called “slabbing”.
The sellers are able to market any coins that come back with a grading between MS70 (perfect) and MS60 (a coin that only just qualifies as uncirculated and has visible scratches). MS refers to “mint state” (see “How the grading system works” on the previous page for a basic explanation of grading).
Now the R5 brigade can start working their sales channels, phoning clients or putting the coins on an auction website such as Bid or Buy.
The coin sold for R5 501 on October 9, 2011.
Wilson says prices have got to “ludicrous” levels.
What can be more ludicrous than one of these coins selling for R2.5 million?
The website of a Gauteng company, SA Coin, says that’s the price achieved for an uncirculated MS69-graded Mandela R5.
That is another distinction Marx points out between the R2.5-million sale and the Bid or Buy price of just over R50 000: online sales are to the general public, whereas when a client of SA Coin wants to sell a coin, the coin is listed and the customer base made aware, which helps keep prices intact.
Marx says SA Coin has done R100 million in turnover over the past five years, primarily in sales of R5 Mandela coins.
“SA Coins started out mainly dealing in ZAR coins (coins from the Boer republic and Kruger era), then incorporated the Mandela coins,” he says.
“We are leaders in especially the R5 market.”
In June 2010, the following prices on NGC-graded R5 Mandela coins were realised on Bid or Buy:
Prices have come down to earth from those heady days. In October 2011, the average price realised for an MS61 was about R900, while MS62-graded coins sold for between R100 and R145.
HOW THE GRADING SYSTEM WORKS
In the Sheldon scale system used in the United States to grade coins, the prefix MS means “mint state” and refers to a coin that is regarded as uncirculated. The number of imperfections that an MS coin has is shown by its score on a scale from 70 to 60. For example, an MS70 is a perfect uncirculated coin (obviously, this is rare), an MS65 has minor imperfections and an MS60 has fairly abundant scratches that can be seen by the naked eye.
Numismatic Guaranty Corporation (NGC) is the most popular company in the US used for grading the Mandela R5 90th birthday coins.
The rarity (or otherwise) of a coin in a particular grade can be determined by checking the population reports for a particular coin.
These population reports are available from the grading companies. For example, a member of he NGC Collectors’ Society can log on to the NGC website and find out how many R5 Mandela 90th birthday coins have been awarded a particular grade by the NGC.