U.S. Mint tin­ker­ing with met­als to lower cost of coin mak­ing

Austin American-Statesman - - THE SECOND FRONT - Test stamp­ings were ex­am­ined for color, fin­ish, dura­bil­ity, hard­ness and mag­netic prop­er­ties. U.S. MINT / AP Byjoann Loviglio

PHILADEL­PHIA — 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.”

U.S. MINT / AP

Eval­u­a­tions of 29 al­loys con­cluded that none met Mint stan­dards. More tests are likely next year.

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