NEW YORK (Scrap Monster): The United States government has decided to trim the costs of producing U.S. coins by making cheaper nickels (a five-cent coin) and pennies.
The US fiscal year 2013 budget proposes legislation to reduce the cost of producing nickels and pennies by changing the composition of the coins to less expensive materials.
According to LME data, the base metal prices advanced sharply over the year. Nickel price advanced by 244% to $20,600 a ton in last ten years while copper increased by 416% to $8,400 a ton. Zinc also gained by 160% to $2, 050 a ton in the same period.
According to the FY 2013 budget, the current cost of making the penny is 2.4 cents and the nickel is 11.2 cents.
According to the U.S. Mint, the nickel coins is now one quarter nickel and the rest is copper and the penny hasn't been pure copper since 1837. The composition has changed over the years and is now copper plated zinc, which means 97.5% of zinc and 2.5% of copper.
According to the FY 2013 budget, the Treasury Department would take "additional actions to improve the efficiency of the coin and currency production efforts, including more than $75 million in savings proposed in the 2013 Budget."
Under a section called “Modernizes U.S. Currency,” the Department in December
it “suspended production of circulating Presidential $1 coins in light of the Federal Reserve Banks’ inventories of 1.4 billion in $1 coins,”claiming credit for an idea Rep. Jackie Speier, D-Calif., promoted.
VP Joe Biden and Treasury Secretary Tim Geitner have adopted San Mateo Democratic Rep. Jackie Speier’s idea to stop minting dollar coins except a few for collectors. They said it would save the government $50 million a year.