6 South African Krugerrands found short on gold

By DONNA BRYSON, The Associated Press
Posted April 24, 2012, at 9:58 p.m.

JOHANNESBURG — A handful of iconic collectible Krugerrands have been found to be up to 5 percent short on gold, South Africa’s central bank said Tuesday following an investigation that led to the suspension of two mint managers.

The South African Reserve Bank had said in a brief statement late last year that it was launching the probe and suspending the mint’s managing director and its general manager for numismatic coins after becoming “aware of certain technical issues within the operations of the SA Mint Company.”

In a statement e-mailed to The Associated Press Tuesday, South African Reserve Bank spokesman Hlengani Mathebula said the investigation focused on production between April and May last year, when 1,539 “proof Krugerrands,” the coin produced in small batches for collectors, were minted in various sizes. Of those, 548 were sold.

Local and international dealers were contacted and they returned 90 coins, Mathebula said. Of those, six were found to contain up to 5 percent less gold than specifications require, he said.

Mathebula said that for security reasons he could not elaborate on the technical problems. He did not say whether the investigation had found evidence of criminal activity or negligence.

“We are confident that the deficiencies have been addressed and appropriate steps taken to avoid a reoccurrence,” he said, adding that the two managers remained suspended.

Tom Hallenbeck, president of the American Numismatic Association, described Krugerrands as “the standard,” available for sale around the world.

“There’s never been a question about the integrity of the Krugerrand,” he said.

He said that he understood the problems announced by the mint to be minor, and that manufacturing problems are not unexpected given the quantities of coins produced.

Glenn Schoeman, chairman of the South African Association of Numismatic Dealers, said the South African mint had discovered “a very minuscule, tiny little problem.”

Mints around the world often don’t even make such problems public, said Thomas Hockenhull, the British Museum’s curator of modern money.

Gold typically has impurities, and, because it is so dense, even slight variations in the casting process can mean variations in weight.

“If they withdrew them, it could add collector value to them,” Hockenhull said of the imperfect Krugerrands. “Which could be slightly ironic.”

http://bangordailynews.com/2012/04/24/news/world-news/6-south-african-krugerrands-found-short-on-gold/ printed on November 20, 2014