The Perth Mint is one of the worlds oldest mints and still operates from its’ original premises located in central Perth. Since the start of this century the Perth mint has been a vital part of Australia's currency making. Although it has not minted circulation coins for Australia for some time, it forms a vital business in Australia as it is one of the worlds leading producers of precious metal bullion and collector coins.

The Perth Mint was originally established as a branch of the Royal Mint of London to refine gold found in the gold rush in the late 1800’s.and mint sovereigns and half sovereigns for the British Empire. Opening on 20 June 1899, it was the last of the Royal Mint’s branches to be opened after Sydney and Melbourne.

The population of Perth boomed in the late 1800’s meaning that the coinage brought over from the eastern states was not enough to exchange for goods or to pay for the gold being traded. Sir John Forrest, the then Premier of WA, asked for a branch of the Royal Mint to be established in Perth. The request was granted and the foundation stone to the building was laid in 1896.

The Perth Mint remained under British Jurisdiction until 1 July 1970, when it then became a statutory authority of the Western Australian Government.

Over the time of the Perth Mints existence it has had a duel purpose – that of refining gold and that of minting coins. In its’ first 100 years the mint refined 4500 tonnes of gold. In its’ early days the Perth Mint refined gold mined in Western Australia and converted it to 22 carat gold for use in sovereigns and half sovereigns for circulation. When the minting of gold coinage ceased some 106 million sovereigns and 735,000 half sovereigns had been produced.

The Perth Mint was also a leading producer of copper coinage within Australia. Production of pennies and halfpennies started in 1922 and continued continuously till 1964 except for the period 1931 to 1940. A small issue of silver shillings were also produced in 1946. The Perth Mint produced 1 and 2 cent pieces for the changeover to decimal currency between 1964 and 1966. Although it had a break from 1968 to 1973 in producing our bronze coinage it was a steady producer of 2 cent coins from 1974 to 1983.

Since the mid 1980’s the Perth Mint has been responsible for manufacturing Australian legal tender precious metal coins. By agreement with the Commonwealth Government the Perth Mint produces a range of bullion legal tender coins and collector coins. Because of the large range of Australian legal tender coins and the fact that it produces a number of legal tender products for other countries, the Perth Mint is within the top 30 exporters within Australia.

References

http://www.perthmint.com.au

Over recent weeks a lot of discussion has been generated on a few forums relating to flooding of the market. This has probably been because a large number of certain items have hit the Ebay market in a very short period of time. Although this can be good for a buyer in the short term, overall it can diminish the value of an item overnight and cause some disappointment for both buyers and sellers.

The law of supply and demand states that the value of an item is based on the demand of the item and the rarity of the item. If demand is low or supply is high a low price will be commanded. The reverse occurs if demand is high or supply is low.

Now if you consider an Australian coin with a mintage of say 5000. In general terms the market can easily support this sort of mintage and in reality, once sold out at the mint the market value of the item should rise as demand has out stripped supply. Mintages of 20000 on most NCLT coins are often high enough for supply to out strip demand causing price deceases even before the mint has sold out. There are some obvious flaws in these assumptions as the theme of the coin and issue price all have a bearing but the basic framework has now been placed on the table.

Now if you get a low mintage coin and a large number hit the market all at once or in a short period of time, the price of this low mintage coin will drop. This is because over the short term, supply will out strip demand. An example of this was seen recently on Ebay where a coin that was sold out at the mint  was selling for almost double issue price. Over 30 of these coins were listed in one day with a further 30 or so listed over the next two weeks, all by the one seller. The price dive bombed and now the coin is struggling to fetch issue price.

Many buyers will say this is a good thing but is it. From a sellers view point the situation is not ideal as, if a coin sells at less than issue price the dealer makes no money, ironically including the seller that flooded the market. From a buyers’ point of view, let us consider the buyers that purchased at well above issue price. Immediately, the coin they purchased has lost a considerable amount of money. If it is a new collector you may loose them from the hobby. This does nobody any good. The second problem is that many buyers will then cut their losses by selling there devalued coin, making the problem even worse. The third problem is that the market may take a long time to recover or never recover or even get worse. This is due to buyers not wanting the issue because of the perceived poor performance of the issue. This means buyers that buy at a bargain price because of flooding may not experience the growth on their investment that they sort.

In my opinion an ideal situation for both buyers and sellers is that supply meets demand and that listings on Ebay ensure that the market value of a coin is maintained. To even further add to this, ideally for both buyers and sellers, for recent issue items, listing numbers should maintain the coins market value at close to issue price. This ensures reasonable profits for sellers and reasonable prices for buyers. It also helps promotes the steady growth of the coin.

At the end of the day, I am happy for those buyers that pick up a bargain.  I do however have little time for sellers after a quick buck as this often does nobody any good in the long run.

On the 23^rd of August the RAM released a $5 silver proof coin to celebrate the 150^th anniversary of the steam train in Australia. The coin is attractively packaged and is a fair looking coin.

A similar coin was released by the Perth Mint earlier this year but it was legal tender in the Cook Islands. This coin was a very nice coin but was let down by its’ packaging. The Perth Mint coin (of 5000 mintage) sold out in a matter of days and saw prices on Ebay go over $100 until the market was flooded. The price now is around the issue price of $65.00.

The RAM version of this coin has a mintage of 15000. Although the mintage is reasonably high it should be popular. This is evidenced by the Ghan coin released earlier this year where train buffs and coin collectors fought over this coin. Ebay sales put the Ghan coin at around $140 to $150. Although the RAM’s latest issue will not reach these heights in the near future this coin should do well on the secondary market. Overall I think this coin will at least hold its’ issue price of $68.50 over the medium term with a small profit to be made over the long run.