A Solid Year for Royal Australian Mint, Despite Challenges

The Royal Australian Mint (RAM) recently published its annual report for 2022.

In the year, 110 million circulating coins were supplied to banks, a decrease of 19 million from the 119 million supplied in 2021-2022. Demand was stronger in the first half year, with higher denominations predominating. The sales value of circulating coins for the year was $64 million, a 10% increase over 2021-2022.

RAM continued to meet the circulating coin needs of Australia’s Pacific neighbours, producing more than 29.4 million circulation coins for Papua New Guinea, 3.5 million for Tonga and 2.9 million for Vanuatu.

There was a modest increase of $2 million in seigniorage in the year, from $25 million in 2021-2022 to £27 million, reflecting increased costs in areas such as interest compensation payments to the banks and the cost of underutilised resources.

RAM noted that variations in metal prices can impact the profitability of individual coin denominations, and that the continued realisation of a positive seigniorage for the circulating coin programme overall, demonstrates that circulating coins for the Australian economy is a service the Mint can sustain for the immediate future ((it does not receive an appropriation from the Australian government but is self-funded through the sale of coins).

The death of Queen Elizabeth II in September 2022 increased public interest in collectible and investment coins, leading to more speculators entering the market. This overwhelmed RAM’s e-commerce and call centre and resulted in queues outside the building on release days.

Capacity was stretched in some areas and the relationship between RAM and its more traditional collectors became strained, increasing stress levels for staff in the call centre, the RAM shop, IT, and the communications centre.

The increased demand for numismatic coins led to RAM experiencing some constraints on production capacity, the workforce, storage space and the ability of the upstream supply chain to provide inputs to the collectible and investment programme. These constraints resulted in an adjustment to commercial plans, with some collectible and investment programmes deferred or cancelled.

Despite these changes, the programmes still achieved sales of $122 million for the financial year, 2% below budget and just $1 million less than the $123 million achieved in 2021-2022.

RAM’s numismatic programmes consist of three streams - commercial partnerships that introduce mass programmes of commemorative coins to Australians; numismatic programmes that target more traditional coin collectors; and investment programmes that leverage the value of gold or silver precious metal as a store of wealth.

52 numismatic coin products were released across 22 coin programs in 2023, the themes of which covered Australian life, identity, history and culture. They included charitable anniversaries such as the Centenary of Centenary of the Wallal Expedition (which helped prove one of Einstein’s major theories), the 90th Anniversary of the ABC, and the centenary of the iconic savoury spread Vegemite, to name a few. Other programs marked

Chinese Lunar New Year and the FIFA Women’s World Cup Australia & New Zealand 2023™ .

RAM also produced one commemorative circulating coin – the 75th Anniversary for Peacekeeping coin – marking the significant contributions of Australian peacekeepers and peacemakers over the last 75 years.

Its gallery and shop were noted as key facets of public engagement. The number of visitors in the year was nearly 332,000 - compared with the 130,500 visitors in 2021-2022 which was affected by the pandemic. RAM is in the process of a Visitor Experience Enhancement Project to refurbish public spaces in 2023-24, during which time it is planning to relocate to alternative premises in Canberra.

RAM returned $55 million to the Commonwealth Office Public account for its 2021-2022 activities and is currently finalising the payment to be made for 2022-2023, but noted that its circulating coin, collectibles and investment business lines achieved a revenue of £185 million and a surplus of $14 million after tax, a 32% return on net assets (RONA).

Forecast for 2023-2024

Budgeted revenue is forecast to be $188 million, a surplus of $24 million and a RONA in excess of 30% based on circulation coin revenue of $53 million (versus $64 million for 2022- 23), seigniorage including gallery funding of $13 million ($27 million for 2022/23), and collectible and investment coin revenue of $137 million ($122 million for 2022/23).

The Royal Australian Mint was opened in 1965 to support Australia’s transition to decimal currency in 1966. Since then, it has evolved to meet the changing requirements of the Australian public and government, and now creates public value through manufacturing and sale of circulating coins to commercial banks for the Australian economy; manufacturing and selling foreign circulating coins; manufacturing and selling collectible and investment coins, medals and medallions, and other minted products to customers around the world.

It also maintains and curates the National Coin Collection as a record of the history of cash in currency in Australia, and the history of the Mint, engaging the public through the Mint’s gallery, retail shop, outreach programs and online.