US Mint Testing New Metals to Make Coins Cheaper

US Mint testing new metalsBy Joann Loviglio

PHILADELPHIA (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.

"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. Canada is dropping its penny as part of an austerity budget.

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.

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.

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."

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."

Concurrent Technologies Corp. (CNC), a Pennsylvania-based scientific research and development company, is working with the Mint on the alternative materials study under a $1.5 million contract awarded in 2011.

The Philadelphia mint, established in 1792, is the country's oldest and largest. Circulating coins are made there and in Denver.

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gogebic2

Just read in another article that the US sold its stock in GM for a loss of 12 BILLION dollars and that the total cost to the TAXPAYERS for "saving GM" (according to our Vice Prez) was over 45 BILLION dollars. We also ABANDONED between eight and ten BILLION dollars worth of military equipment in Iraq, but we can't afford to provide the taxpayers with pennies. Since when do the Mint and the Postal Service have to break even? Nothing else the government does comes close. Printing and minting and delivering mail are a SERVICE the Government provides for the people who pay for it. Some people say our Congress is "Second to None", "None" being the better choice.

December 23 2012 at 9:26 AM Report abuse rate up rate down Reply
fire6889

...And how much money is it costing tax payers for this "study"?

December 23 2012 at 8:40 AM Report abuse rate up rate down Reply
yuccapucka

Just make coins out of transparent thermal plastic with a copper leaf coin embedded inside. The copper leaf would have the magnetic properties of the old coins. An adjustment could easily be made for weight within vending machines. Gold leaf could be used in the dollar coins. They'd be very pretty coins too as the plastic would magnify the image on the leaf.

December 23 2012 at 5:35 AM Report abuse rate up rate down Reply
stvhndyman

Europe does have 1 and 2 cent coins, but are rarely used in Holland. Here in Holland we round up or down to the nearest nickel. Nobody here wants 1 or 2 cent coins. The smallest paper bill is the 5 euro, 1 and 2 euros are coins.

December 23 2012 at 3:42 AM Report abuse +1 rate up rate down Reply
Major

Don't forget the new EBT cards with the president's picture.

December 23 2012 at 2:37 AM Report abuse +1 rate up rate down Reply
Shawn

Also end the stupid .99 cents and round to the nearest dollar for pricing.

December 23 2012 at 2:26 AM Report abuse +2 rate up rate down Reply
Shawn

All electronic no thanks! No way im taking the mark of the beast id sooner become a criminal then accept the mark.... as for currency just make 50 and 1 dollar aluminum coins and only $5 and up paper money.

December 23 2012 at 2:25 AM Report abuse rate up rate down Reply
ppaonessa190

Get rid of the $1.00 bill...put out a $2.00 bill...make a "GOOD" $1.00 coin...save millions...seems easy...but the prining Lobby group bribes Congress and so we keep wasting millions of tax dollars every year....(sort of like the gun Lobby I guess)...so, while these clowns keep fighting in DC over a budget, there are so many ways to save tons of money...BUT the Lobbyists (and Congress) don't want it to happen!

December 22 2012 at 11:58 PM Report abuse rate up rate down Reply
Kenny

Fed take note: do away with all currency, go all electronic.

December 22 2012 at 10:56 PM Report abuse -2 rate up rate down Reply
pappoed

Yak, yak, yak, test, test, test, study, study, study. Inflation has become a fact of life, like death and taxes. When is Congress going to actually approve something so the U.S. Mint and the USPS will stop the financial bleeding? These topics have been going on for YEARS! For the U.S. Mint: just stop printing dollar bills! The 'public' will adapt.....they really will. Change the denomination of the one cent coin and make it two cents...duh! Problem solved......or make it three cents! The public will adapt....they really will. Simple, quick and easy fixes: just DO IT!

December 22 2012 at 10:15 PM Report abuse rate up rate down Reply