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U.S. Mint tests new metal coins

BY ADAM WILMOTH Published: January 4, 2013

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 excessive cost has left the U.S. Mint looking for new metal mixes that would be cheaper to make.

But Oklahoma City businesswoman Terry Neese said it might be time to consider scrapping at least some coins altogether.

“We need to decide whether we are going to keep the penny or not,” said Neese, who in 2005 turned down a presidential appointment to lead the Mint. “Are we going to continue to pay double or over double what it takes to make the penny? It is not wise economic policy to do that. If we can't find the right material that would close the cost to print the penny and nickel, it's time to walk away from those two coins.”

Dick Peterson, the Mint's acting director, has reached a different conclusion

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

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

The Mint last month presented to Congress a 400-page report outlining nearly two years of trials, where a variety of metal recipes were tested.

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,” Peterson said.

More test runs with different alloys are likely in the coming year, he said.

For Neese, however, the evidence is already clear.

“At some point, you need to look at this like a business,” she said. “When it costs twice as much to produce an item than what you are selling it for, you can't sell it for very long.”

Neese has been an advocate of a U.S. Mint program called “History in My Pocket,” which celebrates the historical significance of the country's metal money.

“That's what coins are. They're history,” Neese said. “It's perhaps time to walk away from that history and look at how money is being spent today. Most people have debit cards. People waiting in line for others to pay for what they've just purchased get irritated when people are trying to pull out their coins and pay for what they're buying.”

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.

Neese, however, said the American public has repeatedly rejected dollar coins.

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“I think new metal options are worth looking at for the dime and the quarter, but it is getting so expensive using the current metals that in a few short years, we are going to be looking at a dime costing 15 to 20 cents and be back at where we are today for the penny and nickel.”

Terry Neese,
Oklahoma City businesswoman


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