The first batch of 1oz Big Five platinum coins, featuring an elephant, will be launched in two weeks. Picture: SUPPLIED
The first batch of 1oz Big Five platinum coins, featuring an elephant, will be launched in two weeks. Picture: SUPPLIED

A long-awaited platinum coin from SA will go on sale in coming weeks, ending years of pushing from the country’s mining companies for the legal-tender coin to supplement demand for the metal.

The push has been under way for at least six years. The plan is for the coin to capture a fifth of the global platinum coin market. SA is the world’s largest source of platinum, accounting for 4.4-million oz of 6-million oz of production, making it the logical place to mint and sell platinum coins.

Unlike its sister platinum group metals, platinum is used in jewellery and has value in coins, which are minted elsewhere in the world and are a collectable investment.

SA’s mining companies have held extensive talks with the SA Reserve Bank to launch an official Mandela platinum coin as well as making platinum a reserve product, which would then rank with gold, for example, which central banks around the world hold as a store of value.

In a long-anticipated breakthrough, the coin will soon be in circulation, competing against coins such as the Britannia one ounce coin launched in January 2018, and platinum coins from the US, Canada, China and Australia. The first coin in a series called Big Five is being minted and will go on sale in two weeks, bearing the image of an elephant.

“Prestige Bullion’s initial target is to acquire 20% market share. The global demand now sits at about 100,000 oz of platinum. So, effectively we are looking at selling 20,000 oz in the form of coins. There is no production target — we will produce as much as the market demands,” said Richard Collocott, MD of Prestige Bullion.

“This is the long-awaited platinum coin the industry had hoped for to boost demand for the precious metal,” he said. Investment demand for platinum hit 1.13-million oz in 2019, up from 67,000oz the year before and 361,000oz in 2017.

‘Investment asset’

“There is sound logic in improving the economic value of platinum by the way of beneficiation and converting it into an investment asset,” said Minerals Council SA CEO Roger Baxter.

Prestige Bullion is mandated to manage the legal-tender bullion range for SA, and this coin, along with the famous Krugerrand, is issued under the authority of the Bank. Prestige is a joint venture between the SA Mint and Rand Refinery, a precious-metals smelter and refinery business owned by SA’s gold mining companies.

While the Bank will only buy the coin back at its face value of R20, Prestige will provide liquidity to ensure the coins have a secondary market aligned to the spot platinum price, Collocott said.

Asked why the coin did not carry the Mandela name as the platinum companies had long spoken about, referring to Nelson Mandela, SA’s iconic president and its first democratically elected head in 1994, Collocott said it was not a point of discussion among those designing the coins.

“It was a considered decision of the Mint and Prestige Bullion to issue the coins using the big five. The talk of Mandela coins did not come from experts within the industry, but rather parties not involved in the coin development or approval processes,” he said in response to Business Day.

seccombea@businesslive.co.za

Would you like to comment on this article or view other readers' comments?
Register (it’s quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.