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U.S. Mint Experimenting With New Metals to Make Coins Cheaper

Dec. 20, 2012 3:37pm Becket Adams

U.S. Mint Testing New Metals to Make Coins Cheaper

The director of the U.S. Mint, Edmund Moy, right, unveiling a series of one-dollar coins that is to portray every deceased president, Nov. 20, 2006 (Getty Images)

PHILADELPHIA (TheBlaze/AP) — When it comes to making coins, the Mint isn’t getting its two cents worth. In some cases, it doesn’t even get half of that.

A penny costs more than two cents and a nickel costs more than 11 cents to make and distribute. The quandary is how to make coins more cheaply without sparing our change’s quality and durability, or altering its size and appearance.

A 400-page report presented last week to Congress outlines nearly two years of trials conducted at the Mint in Philadelphia, where a variety of metal recipes were put through their paces in the massive facility’s high-speed coin-making machinery.

Evaluations of 29 different alloys concluded that none met the ideal list of attributes. The Treasury Department concluded that additional study was needed before it could endorse any changes.

(Getty Images)

“We want to let the data take us where it takes us,” Dick Peterson, the Mint’s acting director, said Wednesday. More test runs with different alloys are likely in the coming year, he said.

The government has been looking for ways to shave the millions it spends every year to make bills and coins. Congressional auditors recently suggested doing away with dollar bills entirely and replacing them with dollar coins, which they concluded could save taxpayers some $4.4 billion over three decades.

To test possible new metal combinations, the U.S. Mint struck penny-, nickel-, and quarter-sized coins with “nonsense dies” — images that don’t exist on legal tender (a bonneted Martha Washington is a favorite subject) but are similar in depth and design to real currency.

Twenty-five-dollar rolls of the new presidential one-dollar coin with the image of Abraham Lincoln are displayed for people to exchange after an introduction event at President Lincoln’s Cottage at the Soldiers’ Home November 19, 2010 in Washington, DC. The United States Mint introduced the coin on the 147th anniversary of Lincoln’s Gettysburg Address. (Photo by Chip Somodevilla/Getty Images)

Test stampings were examined for color, finish, resistance to wear and corrosion, hardness and magnetic properties. That last item might be the trickiest, as coin-operated equipment such as vending machines and parking meters detect counterfeits not just by size and weight but by each coin’s specific magnetic signature.

Except for pennies, all current U.S. circulating coins have the electromagnetic properties of copper, the report said.

A slight reduction in the nickel content of our quarters, dimes, and nickels would bring some cost savings while keeping the magnetic characteristics the same. Making more substantial changes, like switching to steel or other alloys with different magnetic properties, could mean big savings to the government but at a big cost to coin-op businesses, Peterson said.

The vending industry estimates it would cost between $700 million and $3.5 billion to recalibrate machines to recognize coins with an additional magnetic signature. The Mint’s researchers reached a lower but still pricey estimate of $380 million to $630 million.

The U.S. Mint is suspending production of dollar coins as the government looks to nickel and dime its way to smaller budget deficits. David Wessel has details on The News Hub. December 14, 2011. (Getty)

Another challenge for the Mint is the rising cost of copper (used in all U.S. coins) and nickel (used in all except pennies).

Only four of the 80 metals on the periodic table – aluminum, iron (used to make steel), zinc and lead – cost less than copper and nickel, the report stated. Lead isn’t an option because of its potential health hazards.

“Pricing of steel, aluminum and zinc are pretty close to each other … there are promising alternatives for the nickel, dime and quarter,” Peterson said. “There wouldn’t be any advantage to shift the composition of the penny, so we offset that cost with (savings from) other denominations.”

Recently struck James Madison Presidential one dollar coins drop into a bin at the U.S. Mint in Philadelphia, Pennsylvania on Wednesday, Aug. 8, 2007. (Photographer: Stephen Hilger/Bloomberg News)

Pennies may not be cost-efficient, but they won’t be getting pinched as long as they’re in demand.

“We produce 6 billion pennies a year,” Peterson said. “Our customers want them.”

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Featured image courtesy the AP.

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Comments (81)

UNALIEN
Posted on December 20, 2012 at 4:29pm
a video with Kyle Bass explaining the Keynesian endpoint, when all GOv revenues go to pay debt..

Japan will hit first and US not far behind, hyper inflationary monetary collapse as Central Banks are trapped into printing.. excellent explanation for those that understand this stuff… Marxists and Progressives will get a big wakeup call..

http://www.youtube.com/watch?v=JUc8-GUC1hY

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Shoot2Stop
Posted on December 20, 2012 at 4:24pm
For decades nickels have been far cheaper than the special non-corrosive washers used behind concrete nails holding the plumbing to the walls of many Silicon Valley chip fab lines, and nickels are exactly the same dimensions.

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- neidermeyer
  Posted on December 20, 2012 at 5:51pm
  The article didn’t touch on it but a bigger part of the coin op industries problem with reformulated coins is that the better mechanisms use “noise discriminators” … certain coins sound differently when passing through a mechanism…
  
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- Eastinfection
  Posted on December 20, 2012 at 6:24pm
  We used to comb through houses that were being built near me when i was a kid looking for slugs from electrical boxes that we could use to fool soda pop machines.
  
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- aproudinfidel
  Posted on December 20, 2012 at 6:37pm
  As if the coins they mint today aren’t cheesy enough looking.
  
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- resme
  Posted on December 21, 2012 at 1:16am
  @east, Felon….
  
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- WATER-THE-TREE
  Posted on December 21, 2012 at 1:50am
  The coins should be made of gold and silver and the dollar brought back to what the founders intended, I heard that gold and silver were to be the only things used for currency according to the constitution.
  
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sbenard
Posted on December 20, 2012 at 4:24pm
Following directly in the path of the Roman Empire! They debased their currency also, leading to inflation and collapse. Self-immolation appears to be our destiny!

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- Advection
  Posted on December 20, 2012 at 6:58pm
  You’re correct about the decline and fall of the Roman Empire, and the parallels to the US. However, there is a more important story underlying this.
  
  Geithner informed congress that the switch to junk metals would save a little money, while he asked congress to give Obama permission to print as much money as he wanted. Does a Vegas high-roller really care about the cost of a pack of matches? No.
  
  If you dig a little deeper, you will find that Geithner loves digital transactions. You will also find that they want to ditch coins below the quarter altogether, and soon. So this is just a baby step on the way to digital currency.
  
  The Federal Government is moving towards a system where every single transaction depends upon you connecting to their server, and they obviously then own you.
  
  Report this comment
GuruMeditation
Posted on December 20, 2012 at 4:17pm
They are probably doing this because you may be able to melt down and sell the molten mass at the scrapyard and get back more $$ for them than what they are worth (face value).

None of this makes sense. Why make something that costs more to make and distribute than what it’s worth in it’s final form?

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- Cavallo
  Posted on December 20, 2012 at 4:35pm
  Union Jobs.
  
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- GuruMeditation
  Posted on December 20, 2012 at 5:27pm
  I believe that. I’ve always voted unions out and screwed w/ them whenever I had the opportunity ;->
  
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DZ-015
Posted on December 20, 2012 at 4:14pm
The problem is that rising metals prices are symptomatic of a weakness in the dollar. It is already time to do away with the penny for general circulation. On a trip to Alaska, I found that pennies are not used at all; everything is priced in five cent increments. A new five cent coin could be made out of cheaper metal, such as zinc plated steel, similar to the composition of the 1943 wartime cents. They lasted only one year because people confused them with dimes, but they held up rather well. Of course, pennies and nickels could still be produced in their original copper and nickel alloys for proof sets where the price could be set high enough to cover their actual production costs. Also, do away with the dollar bill. Use coins instead and use the empty dollar bill slots in cash drawers for our new lowest printed denomination, the $2 bill.

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- Dismayed Veteran
  Posted on December 20, 2012 at 4:45pm
  I went to Mexico in 1986 for vacation. Lots of coins in a very short time. Carrying them in my pocket sucked.
  
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- circleDwagons
  Posted on December 20, 2012 at 5:25pm
  Yes, do away with pennies. But No to dollar coins. How much did this study cost? And close the post office on saturdays. But we would really save if we just paid obama to golf.
  
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- DadRocked
  Posted on December 20, 2012 at 9:47pm
  THEY’RE BLOWING SMOKE UP YOUR BACKSIDE FOLKS
  As a numistmatist, they DO make money (no pun) making money.
  
  Here’s the numbers from for coinage supplied by U.S. Mint as of 2011 Report – http://www.usmint.gov/faqs/circulating_coins/index.cfm?flash=yes&action=faq_circulating_coin
  
  Mfr Cost Value
  Cent 0.0241 0.01
  Nickel 0.1118 0.05
  Dime 0.0565 0.10
  Quarter 0.1114 0.25
  Dollar 0.1803 1.00
  Total 0.4841 1.41
  Profit 0.9259
  
  Currency figures from the Federal Reserve 30MAR2012 http://www.federalreserve.gov/faqs/currency_12771.htm
  
  Mfr Cost Value
  $1 Note 0.052 1.00
  $2 0.052 2.00
  $5 0.085 5.00
  $10 0.085 10.00
  $20 0.092 20.00
  $50 0.092 50.00
  $100 0.077 100.00
  Total 0.535 188.00
  Profit 187.47
  
  Their blowing smoke up your behind folks… ALL OF THAT IS PROFIT
  
  FOLLOW THE MONEY… The materials come from somewhere… Who’s back are the promoters/politicians of this issue are they scratching.
  
  On 14DEC2010, Public Law 111-303, American Eagle Palladium Bullion Coin Act of 2010, was enacted on 14DEC2010, providing the authorization for the U.S. Mint to produce and issue palladium bullion and collector coins. was introduced by Rep. Denny Rehberg of Montana.
  
  By law, the mint can only gain the natural resources for coinage from U.S. mining. The only state that has palladium is… You guessed it, Montana.
  
  Not to say that it’s wrong to bring the bacon home to your constituents but the change isn’t the cost, because as indicated… The numbers above don
  
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- DadRocked
  Posted on December 20, 2012 at 10:30pm
  -cont’d
  The numbers above dont lie… They make money making money…
  After posting, I see that this did not format the way I had it so…
  1¢ cost 2.41¢ value 1¢
  5¢ cost 11.18¢ value 5¢
  10¢ cost 5.65¢ value 10¢
  25¢ cost 11.14¢ value 25¢
  $1 cost 18.03¢ value 1.00
  Total cost 48.41¢ value 1.41
  Profit 92.59¢
  
  Currency
  $1 cost 5.2¢ value $1.00
  $2 cost 5.2¢ value $2.00
  $5 cost 8.5¢ value $5.00
  $10 cost 8.5¢ value $10.00
  $20 cost 9.2¢ value $20.00
  $50 cost 9.2¢ value $50.00
  $100 cost 7.7¢ value $100.00
  Total cost 53.5¢ value $188.00
  Profit $187.47
  
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- carlschulz
  Posted on December 21, 2012 at 4:12am
  if we do away with dollar bills, strippers would have to carry buckets on stage for tips.
  
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- chewfatlip
  Posted on December 21, 2012 at 8:42am
  @dadrocked – assuming they make the same number of each, that’s true. But you know they make a lot more pennies and nickels than other denominations. I don’t see a problem with trying to reduce costs on an item.
  
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ArmedAndReallyPissed
Posted on December 20, 2012 at 4:13pm
I can see it now…….The NEW OBAMA Coin or they’ll put that Communists ugly F-ing face on the Dollar Bill. I just know with his F-ing EGO, he will want to have his Treasonous MF-ing face on something HUGE for all time.
My hatred is so immense, i can’t find the words ( or use them for fear of Prison ).

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- steelpanther
  Posted on December 20, 2012 at 4:34pm
  He’d have to change current laws, as I know you can’t put living people are legal tender. Not that ignoring laws is a problem for him.
  
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- ArmedAndReallyPissed
  Posted on December 20, 2012 at 5:01pm
  STEEL : Your right on all counts. This Commie Pig doesn’t know what Law is and damn sure isn’t held to them. I think it would be no problem at all for him to make and pass a Law so he can be “forever admired” as the Greatest Leader the World has ever known ( obviously in his mind, not mine ). He does what he wants, when he wants and he doesn’t need anyone’s approval.
  Maybe he will get his Pig face carved into Mt. Rushmore ?
  
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- TheBurningTruth
  Posted on December 20, 2012 at 7:31pm
  Then we should start a “write-in” campaign. On every dollar with the Marxist’s face, neatly print something like, “I”m a c*cks*cker” or “I’m a n-word”. Use them at ATMs or other automated pay stations anonymously, and when getting one in return, either refuse it as unacceptable or exchange it at the bank for the same reason. As millions of these “corrected” dollar bills start getting returned to the govt, the message will get across.
  
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LameLiberals
Posted on December 20, 2012 at 4:12pm
The Roman Empire did this also before it died. I bet the EX British “EMPIRE” did this also before they became 2nd class country. Both Rome EMPIRE and the British EMPIRE spent a fortune on endless worthless wars and parking soldiers in every corner of the Earth – which broke their backs financially just as it is breaking the USA EMPIRE’s financial back.

Funny how history repeats itself. In a way, it will be a mercy when the USA dies and breaks up. The USSR died and broke up and Russia is coming back and without all its debt. Russia is still communist but the “former states” are free of Russia because they split. So good things can come out of the USA breaking up. Nothing lasts forever and neither will the USA.

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- Cavallo
  Posted on December 20, 2012 at 4:25pm
  I’ve have thought for a long time now that the USA needs to be broken into three separate countries. NorthEast, Central South, and Western Americas. That way there are three different countries that could live their lives how they see fit. I think immigration should be easy but not open. Maybe a NAFTA type of trade agreement between the three.
  
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HMNSC
Posted on December 20, 2012 at 4:10pm
How much are they spending on this multi year study? I wouldn’t be surprised in the least to find out we spend 10 billion to figure out how to “save” 4.4 billion.

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- just my opinion maybe not yours
  Posted on December 20, 2012 at 5:50pm
  I was wondering if someone else thought the same as I did reading this! If they wouldn’t have done the study we may have in the end saved money even if we are paying more for the metals but the GOVERNMENT KNOWS BEST! Sarcasim of course!!
  
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THX-1138
Posted on December 20, 2012 at 4:06pm
We could make them out of lead. At least then we could melt them down and send them back….

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- Strasser
  Posted on December 20, 2012 at 10:39pm
  Well in that case I’ll take the steel and lead variety….
  
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- Strasser
  Posted on December 20, 2012 at 10:40pm
  Oops, I meant steel and copper. They’re much more “durable”….
  
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ArmedAndReallyPissed
Posted on December 20, 2012 at 4:06pm
A 400-page report presented last week to Congress outlines nearly two years of trials conducted at the Mint in Philadelphia, where a variety of metal recipes were put through their paces in the massive facility’s high-speed coin-making machinery.

Evaluations of 29 different alloys concluded that none met the ideal list of attributes. The Treasury Department concluded that additional study was needed before it could endorse any changes…………………………AND HOW MANY MILLIONS did these two years of trials cost US TAXPAYERS and HOW MANY MILLIONS will these additional studies cost US TAXPAYERS ? What a crock of crap. And only Morons want to have the Penny continued being produced.

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HKS
Posted on December 20, 2012 at 4:05pm
When money cost to much to make, you know you’re screwed.

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THX-1138
Posted on December 20, 2012 at 4:03pm
Oh the Irony (Iron-ie?).

Here’s a crazy idea, peg the value of the penny to a precious metal, say, I dunno, Gold maybe. The only downside is that our wealth couldn’t be stolen by the government by printing more worthless paper.

America, the new Chicago.

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- LameLiberals
  Posted on December 20, 2012 at 4:22pm
  Blame REPUBLICAN President NIxon for ending the gold standard.
  
  Blame Bill Clinton for releasing the investment banks upon us by letting them play fast and lose by getting rid of the 1933 Glass-Steagall Act That act was put in place AFTER the Great Depression to stop banks from causing another depression but DEMOCRAT Bill Clinton trashed it.
  
  Blame Jimmy Carter for enacting the Community Reinvestment Act and blmae George Bush II AND Bill Clinton for expanding it into a huge housing disaster it became. The government should NOT be in the housing business – NOT constitutional.
  
  Blame George Bush and Obama for giving us a police state with the enactment of Homeland Defense, and Patriot Act and in Obama’s case NDAA and putting the other two on Nazi fast tracks.
  
  REPUBLICANS AND DEMOCRATS are trashing are dollar. Only Rand Paul and Ted Cruz and MIke Lee are TRUE constitutionalists. The rest of them are RINOs and demorats. Some RINOs are worse than others with Graham, McCain, Murkowski, ANY elected official from Alaska from either party, Collins, Snowe, the list is endless for RINOs who are destroying our Constitution (for our “safety” right along with the liberals. BEN FRANKLIN “THOSE WHO GIVE UP FREEDOM FOR SECURITY – DESERVE NEITHER.
  
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nelan72
Posted on December 20, 2012 at 4:03pm
When can we start paying bills with lock washers and wood screws.

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jimmymac1
Posted on December 20, 2012 at 3:59pm
Our money isn’t worth anything now isn’t that cheap enough

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- tunnelboy
  Posted on December 20, 2012 at 4:09pm
  Lmao
  
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flatbroke
Posted on December 20, 2012 at 3:57pm
At the rate the US is going, why not just settle for wooden nickels, pennies.

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- Cavallo
  Posted on December 20, 2012 at 4:03pm
  Nope, we’re going cashless baby! Makes it that much easier for The State to take your money from you, track what you are spending on, etc.
  
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- dublinthewagons
  Posted on December 20, 2012 at 5:10pm
  Plastic ( debit & credit cards) its coming anyway.
  
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ArmedAndReallyPissed
Posted on December 20, 2012 at 3:57pm
Awesome idea !!! Save money by making Coins cheaper and by cutting Social Security “Entitlement” Payments………………….But don’t dare stop or cut Foreign Aid, especially to Kountries of our Enemies. Brilliant plan. “Forward” we go. ( straight to hell )

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Cavallo
Posted on December 20, 2012 at 3:57pm
Hah, so.. the government has devalued the dollar to the point that it isn’t worth minting? Hi-lar-ious! (and really frick’n sad). I wonder if this is one of the excuses they will use to try and force us into a completely cashless society? I wonder what the underground currency will look like then?

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jfriedri
Posted on December 20, 2012 at 3:55pm
Why not just enforce a “rounding law” for business to round up or down to the nearest nickel or dime and do away with nickels and pennies altogether.

Or allow business to round up and give the proceeds to charity (Round Up for Charity)

Saves the weight and the cost of making them

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ginger100
Posted on December 20, 2012 at 3:55pm
They could experiment with wood coins and monopoly bills, I am experimenting with glass beads, blankets, shells for trade

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- taxpro4u03
  Posted on December 20, 2012 at 4:41pm
  I know your post was meant in jest however – Hale v Henkel 201 U.S. 43 @ 89 {1906} suggests in the substantive one has the RIGHT to contract any way they see fit — now — ‘business’ of ALL kinds seeks to ‘reduce costs’ thereby increasing ‘profit’ for their shareholders — ‘least that is my ‘general;’ understanding of how a ‘capitalist system works – Corp USA is a ‘business.’ YOU, may or may NOT be a ‘commodity’ in which they engage in that ‘business.’ YOU’ll have to figger it out, since due diligence is non-delegable. Same as ones RIGHTS. The very term ‘barter’ is relevant – in that ‘their’ own corporation attempts to place ‘federal reserve note value’ ON that transaction (the major issue decided in Erie RR v Thompkins, 1938) — the constitution of the republic restricts GOVERNMENT, not Human Beings!! – And, if you and your customers choose to trade in glass beads — it would be LOGICAL that, that transaction falls under the ruling above…. simply ‘reducing costs’ isn’t unlawful, so LONG as there is no allegation of TRESPASS against the State – trespass has been defined OUTSIDE the State Statutory Admiralty jurisdiction to mean crime involving PROPERTY of ‘persons’ or property – the very term property is worth investigation in BOTH jurisdictions — words ‘appear’ to have meaning at law… Learn the language :-)
  
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- ginger100
  Posted on December 20, 2012 at 6:46pm
  What law? Laws seem to have no meaning to the bunch in washington, we are a 3rd world nation run by a crime ring
  
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CWPrequired
Posted on December 20, 2012 at 3:55pm
Maybe Obuma will be on a coin soon. Pretty much the only thing he hasn’t been awarded… yet.

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- Cavallo
  Posted on December 20, 2012 at 4:04pm
  If that happens, it will be a State Crime to deface such currency. … or more appropriately a Crime of Blasphemy.
  
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- Rothbardian_in_the_Cleve
  Posted on December 20, 2012 at 4:13pm
  I’d rather see Obama on a milk carton than a coin. He can go on vacation and just stay there as far as I’m concerned.
  
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- aproudinfidel
  Posted on December 20, 2012 at 6:41pm
  @roth: LMAO at the thought of the milk carton…it would have to be non-fat of course.
  
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SCREW-WINDOWS
Posted on December 20, 2012 at 3:50pm
As any other company if it’s to costly to do it here send it over sea’s.

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sgtstubbs
Posted on December 20, 2012 at 3:46pm
The extra weight would cause old people to walk off balance and break their hips…..lol

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stopprintn
Posted on December 20, 2012 at 3:43pm
Gubment always costs more to do anything, So whats new?

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MrButcher
Posted on December 20, 2012 at 3:43pm
…as the lumbering top-heavy giant is about to fall…..

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- Snowleopard {gallery of cat folks}
  Posted on December 20, 2012 at 4:08pm
  Absolutely, and the fall will take all of us with it.
  
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schroeder123
Posted on December 20, 2012 at 3:42pm
Leave it up to the US Government to to not only **** up the dollar value but the coins to boot.

Buncha damn Idiots.

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