Aerospace and Defense

U.S. Mint Weighs New Metals, Processes For Coins

Research and development report outlines possible changes to the way U.S. coinage is manufactured.

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The U.S. Mint has releases a research and development report outlining possible changes to the way U.S. coinage is manufactured. The cost saving measures may have a significant impact on industries which use machines to handle coins, such as the vending machine and parking meter operators.

Making money is expensive

The study, a legally-mandated biennial report to Congress since 2012, outlines recommended cost-reduction measures. It’s surprisingly expensive to make money: despite ongoing cost reductions, the U.S. Treasury still loses money minting pennies and nickels. Through Fiscal 2014, the production cost of the penny has decreased 31.1 percent to $0.0166 from $0.0241; the cost of the nickel has decreased 27.6 percent to $0.0809 from $0.1118 while the dime‘s cost decreased 30.8 percent to $0.0391 from $0.0565. The production cost of the quarter decreased 19.7 percent to $0.0895 from $0.1114

A major part of future cost savings will come from the substitution of lower cost metal alloys and layered designs, but the Mint has identified major concerns from  coin stakeholders that new coins with alternative metal compositions may have properties that are different from current circulating coins. The circulation of same denomination coins with different metal compositions creates unique challenges for stakeholders, specifically, any change to the weight, shape, and most importantly the electro–magnetic signature (EMS) used to validate current coins in coin acceptors would require equipment changes. The cost to affected industries could be  between $2.5 billion and $6 billion. In addition, many industry stakeholders are especially sensitive to changes to the quarter because of its extensive use in many industries such as vending, laundry, amusement and parking. The cost to industry could greatly exceed potential savings of $5-57 million annually with an alternative metal composition.

New alloys cost less

The Mint has conducted extensive R&D on potential alternative metal compositions for circulating coins. During initial research, the Mint tested twenty–nine different metal formulations. Of these, the Mint focused efforts on six metal compositions that show potential to duplicate the existing weights and EMS of current United States coinage.

One of the six compositions, the 80 percent copper and 20 percent nickel (80/20) alloy offers
nearly identical weights and EMS as the current nickel, eliminating the impact on coin industry stakeholders. The Mint will conduct further testing of the 80/20 alloy before confirming the use of the material as the outside layer for the clad metal composition of dime and quarter coins.
However, the 80/20 alloy results in only modest material savings of approximately three percent
($5.0 million annually using 2014 production volumes). 
Other compositions that may match the weight and EMS of current coinage, but provide additional
savings beyond the 80/20 alloy, are currently undergoing testing that should conclude in 2015.
The other five alternative metals compositions are nickel-plated steel (NPS), multi–ply plated steel
(MPPS), stainless steel, copper–plated zinc (CPZ), and tin–plated copper–plated zinc (TPCPZ). Of these, only the steel–based coins demonstrated acceptable wear characteristics. These steel–based alternatives offer savings of 15–20 percent (approximately $57 million annually) compared to 2014 costs. However, these steel–based alternatives require the coin stakeholder industry to make changes to recognize both new and existing coin characteristics because the two types of coins would
co–circulate.
Significantly, the EMS range for these steel–based compositions introduces the potential use
of low –value steel coins from other countries in coin acceptance machines, particularly the
quarter.

New blanking tech shows promise

In addition, the Mint has investigated two alternative methodologies to produce blanks for coinage operations. The first alternative involved the use of laser blanking technology. Although lasers potentially could create coin blanks, none of the analyses showed a strongly favorable economic outcome for laser blanking. A second initiative identified a die–blanking with a push–back system, which could eliminate the expense of on–site annealing.

The push–back system is very similar mechanically to the Mint’s current die–blanking system
and would is expected to have a low capital investment. The Mint plans to study the push–back die blanking system and to evaluate the equipment changes needed in 2015.  
Written by

James Anderton

Jim Anderton is the Director of Content for ENGINEERING.com. Mr. Anderton was formerly editor of Canadian Metalworking Magazine and has contributed to a wide range of print and on-line publications, including Design Engineering, Canadian Plastics, Service Station and Garage Management, Autovision, and the National Post. He also brings prior industry experience in quality and part design for a Tier One automotive supplier.