Golden Half-Century

The Krugerrand’s remarkable contribution to SA mining value-addition

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The gold bullion Krugerrand represents a most remarkable story from a beneficiation perspective, with more than 60-million pieces sold over the past 50 years. This equates to more than 1 660 t of local gold used in the process, and about 25% of all South African gold sold currently is in the form of Krugerrands.

This is according to precious metals smelting and refining complex Rand Refinery CEO Praveen Baijnath, who spoke to Mining Weekly during a site visit to the company’s facility, on the East Rand, in August, to mark the coin’s fiftieth anniversary.

He highlights that most of the gold used to produce the Krugerrand is mined in South Africa, where it is also locally alloyed and blanks are produced, and other related services, including marketing and distribution, are undertaken.

The gold that is used to produce the Krugerrand is sourced, refined and then manufactured by Rand Refinery, where it produces blanks of the coin. About 9 000 blanks a day are then struck by the South African Mint – a subsidiary of the South African Reserve Bank (SARB) – and the coins are then returned to Rand Refinery for final packaging, following which they are marketed and sold worldwide.

Baijnath notes that, since the first 22 ct gold Krugerrand was manufactured, on July 3, 1967, the gold bullion coin has become a sought-after item for “discerning investors”. This demand has made the Krugerrand the world’s most traded gold bullion coin of all time, beating out its closest competitors, the Canadian Maple Leaf and the US Eagle.

Increased demand for gold has supported sales of Krugerrands, with this year predicted to yield the highest sales since the 1980s on the back of an expected 15% to 20% increase on the 1.1-million ounces in coins sold in 2016.

This is according to Rand Refinery marketing executive head Richard Collocott, who also addressed the media during the visit.