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., 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.