South Africa is blessed with gold deposits which lend themselves to industrial mining. This geographical treasure trove, called “Witwatersrand,” was discovered in the mid 1880’s, and understandably led to heightened interest in the area.
Mining companies in this region eventually established the Rand Refinery, which has become the biggest single site refinery operation in the world. The Rand Refinery produces the blanks which become Krugerrands.
This coin was first dreamed up in 1964. This coin–legal tender, and yet simultaneously bullion coin–would carry a set amount of gold. The concept was that private citizens could, in this way, own gold bullion.
This would enable the South African gold industry to sell more product. American citizens, for example, were banned by law from privately owning gold bullion. However, foreign coins were excluded from this law.
An American buying a Krugerrand knew how much gold in weight was being purchased, because this weight was stamped on the coin. Image of Springbok on Gold Krugerrand
Face of Paul Kruger on Gold Krugerrand
Americans could legally own a Krugerrand. But until apartheid was abolished in the mid 90’s, economic sanctions forbade the importation of the Krugerrand.
The first Krugerrands were minted on July 3, 1967 at the South African Mint. And, rather than stamping a value on the coin, this currency’s value was derived from the current price of gold. Imagine this: by the early 1980’s, the Krugerrand had captured almost a 90 percent share of the gold coin market. The Krugerrand’s success story saw other nations jump on board with the same concept: in 1979, the world was introduced to the Canadian Maple Leaf; in 1986, the US Gold Eagle coin was launched.
Since the 1-ounce gold Krugerrand proved so successful, the South African Mint started to produce gold Krugerrands in fractional amounts in 1980. At denominations of 1/2-ounce, 1/4-ounce and 1/10-ounce, these coins facilitate the bartering process and also allow a variety of smaller investors to enter the market.
The term “Krugerrand” is named both for Paul Kruger, who was president of the South African Republic during the era of gold’s discovery in the Transvaal; and the rand, which is South Africa’s unit of currency. Paul Kruger, long-time statesman for the Boer settlers and leader during the Boer War, was known affectionately as “Oom Paul,” Afrikaans for “Uncle Paul.” His profile is featured on the obverse of the Krugerrand; and a springbok, national symbol of South Africa, is featured on the reverse. Both Afrikaans and English phrases are written on the coin: “South Africa” and “fine gold.” Both images were created by South African sculptor Coert Steynberg.
The Krugerrand is struck in a copper alloy, which enables it to weather the rigors of circulation. Measuring 2.74 mm thick and 32.6 mm in diameter, the Krugerrand weighs 1.0909 troy ounces.
– History of the British Gold Sovereign