The Cost of Minting Money

For the first time in U.S. history, it costs the Treasury more to mint and issue pennies and nickels than the coins are worth.  A penny now costs 1.7 cents to make, and the nickel costs 10 cents.   This is due to steep increases in recent years in the prices of the copper, zinc and nickel the coins are composed of.  Copper is used for wiring and pipes, zinc for anti-rust purposes, and nickel for stainless steel.  Demand for these metals by developing Asian countries has driven up the costs by 300 to 450 percent since 2003.In 2007, it cost $124 million dollars to produce $74 million worth of pennies.

The Treasury is considering changing the composition of the coins. New alloys must be strong enough for the coins to last, and work in vending and coin-counting machines and meters.  It is possible that pennies could be made of steel treated to keep the copper color.  The copper content of nickels, now 75%, would be reduced or eliminated.  Although the coins are more costly than their face value, some people say that this is offset by the fact that each coin circulates thousands of times before wearing out.