Of the current top three contenders for a change in composition for the copper-nickel Jefferson 5-cent coin, two exhibit a yellowish hue and the third is golden in color, according to a report to Congress submitted Dec. 13 by the United States Mint.
One of those three alternatives — multi-ply-plated steel — is produced by a process patented by the Royal Canadian Mint. Its use would likely require the U.S. Mint pay a licensing fee.
The report also indicates that the top alternative composition for the copper-plated zinc Lincoln cent — copper-plated steel — offers no overall cost savings over copper-plated zinc.
The report to Congress was prepared by Concurrent Technologies Corp., Johnstown, Pa., on behalf of the U.S. Mint. The 400-page report represents the Mint’s first biennial report authorized under the Coin Modernization, Oversight, and Continuity Act of 2010 (Public Law 11-302) concerning alternative metals for U.S. coins.
Although CTC presented conclusions and made recommendations based on the research findings, U.S. Mint officials made no definitive recommendations to Congress, arguing more research and validation of results is necessary before any compositional changes can be recommended.
“More development, testing and evaluation must be completed prior to finalizing a detailed specification for future coinage materials that would include ‘appropriate changes to the metallic content of circulating coins in such a form that the recommendations could be enacted into law as appropriate’ [section 3(b) of Public Law 111-302],” according to the report.
CTC’s public outreach determined the general public would “readily accept” a color change for the 5-cent denomination.
The research and development conducted jointly at the Philadelphia Mint by the U.S. Mint and Concurrent Technologies Corp. was triggered by overall costs of the cent and 5-cent coin registering more than double face value. In addition, the 18-month study, concluded in August 2012, also considered alternatives for the dime, quarter dollar, half dollar and dollar coins.
The half dollar and dollar coins are still struck in circulation quality, but only for sale at numismatic premiums above face value.
The quarter dollar is considered the work-horse of current circulating coinage, and any change in composition would cause a major disruption to vending companies and other concerns that use the coins in automated transactions if equipment would need retrofitting because of the change, according to the report.
The current copper-nickel clad composition for the quarter dollar is also used for the dime and half dollar. The dollar coin is composed of manganese-brass clad.
The report indicates it would take three to four years from the selection of any alternative compositions for them to be introduced into circulation.
CTC’s findings recommended that in the event of changes in the composition of more than one denomination, that they be introduced into circulation on or about the same date to ensure a seamless transition.
The U.S. Mint’s research and development concentrated on testing of coinage strip, raw blanks and planchets (finished blanks with an upset, or raised rim, ready for striking) that were supplied by current and potential vendors.
The three current suppliers to the U.S. Mint provided samples for testing: Jarden Zinc Products, Greeneville, Tenn., finished cent planchets; and the two suppliers of coinage strip for punching blanks for the 5 cent through dollar denominations, Olin Brass Products in East Alton, Ill., and PMX Industries in Cedar Rapids, Iowa, also provided samples for testing.
In addition to those three firms, potential suppliers who contributed to the U.S. Mint’s Research and Development efforts included:
➤ Royal Canadian Mint, Winnipeg, Manitoba.
➤ Royal Mint, Great Britain.
➤ Carpenter Technology, Wyomissing, Pa.
➤ CVMR Corp., Toronto.
➤ Vale Inco Ltd., Toronto.
➤ Ryerson Inc., Chicago.
According to the United States Mint, upon starting research, it reduced the potential alternative metals options to 32 available industrial metals selected from the periodic table of 80 metallic elements.
Of the 32 metals tested, three — aluminum, zinc and iron (steel) —were considered as potential long-term alternative metals, in addition to copper and nickel, which are the primary metals used in current U.S. coinage.
From the three, plus the two incumbent metals, nine alloy groups, comprising 29 potential alloy combinations, were identified for consideration and testing.
➤ Aluminum — A commercially available grade 5052 was identified by CTC for test and evaluation. The CTC report recommends against the use of aluminum or aluminum alloys.
➤ Aluminized steel — Composition is available as steel sheet coated with aluminum. As the sheet is surface coated, coins made of the composition would have an unprotected exposed edge after blanking.
The exposed edge would rust.
➤ Copper-plated zinc — The current Lincoln cent composition. If used for denominations other than the 1-cent coin, its different EMS would result in increased conversion costs and its color (brownish) would create some short-term confusion.
➤ Multi-ply plated steel — Multi-Ply-plated steel is made by a patented process developed by the RCM in which a flash nickel layer is plated onto low-carbon steel, followed by a (noncyanide) plated copper layer and a second nickel layer. Used as circulating coin material in Canada and other countries.
➤ Copper-plated steel — This composition is a plated product utilized interchangeably with copper-plated zinc by the RCM. In considering this option for the United States, cost estimates did not demonstrate a cost savings, since a heavier copper plating would be required than used on the current copper-plated zinc cent.
➤ Copper-plated steel sheet — This is steel sheet plated with copper. Cost modeled, but not tested.
➤ Nickel-plated steel — This is a nickel-plated steel alternative developed by the Royal Mint, with the name aRMour. It is composed of nickel plated on a low carbon steel. Coating is much thicker than the RCM multi-ply composition.
➤ Stainless steel — Two distinct grades of stainless steel were considered, one magnetic and one nonmagnetic.
➤ Tin- and copper-plated zinc — The proprietary name of this composition is Dura-White. Dura-White is the name of a patent-pending process developed by Jarden Zinc Products. A zinc planchet is first plated with copper and then with tin. The tin coating provides a color similar to the current coin compositions.
➤ Leaner copper-based alloys — Modified copper-based alloys leaner than the current coin composition of 75 percent copper and 25 percent nickel (used for the 5-cent coin, and the outer layers of dime, quarter dollar and half dollar). The alloys were identified as 669z (PMX); G6 Mod (Olin Brass Products); and 31157 (Jarden Zinc Products).
Using the metals prices defined on the London Metal Exchange, Concurrent Technologies Corp. identified iron (and steels), zinc and aluminum alloys as the leading alternative candidates that could potentially reduce the cost of coinage by replacing copper and nickel to varying degrees.
Under the joint CTC-U.S. Mint research conducted under U.S. Mint oversight, two rounds of progressive trial strikes were executed at multiple striking pressures on the coinage presses, according to the report. Twenty-five unique material-denomination combinations were tested among the two striking trials.
Also, four materials were corrosion tested only for alternative compositions for the Presidential and Native American dollars, both of which are struck in circulation quality only for numismatic products intended for collectors.
Nonsense dies used
All of the experimental trial strikes were produced with obverse nonsense dies depicting different portraits of Martha Washington for the cent, 5-cent and quarter dollar test pieces, each with scrambled lettering. The reverse designs on the test pieces, also with scrambled letters, were intended to replicate the detailed images common to current circulating coins.
The reverse cent nonsense die design resembles the Lincoln, Shield cent reverse. The reverse design for the 5-cent test pieces features a different rendition of Monticello than that which appears on the current Jefferson 5-cent coin.
The quarter dollar nonsense die reverse incorporates elements of the current America the Beautiful quarters.
Test pieces produced from these striking trials were struck to test potential alternative material candidates for the cent, 5-cent coin, dime, quarter dollar and half dollar.
Consistent with current U.S. coinage, the project team assumed that the dime, quarter dollar and half dollar coins would continue to be constructed of like materials in the same relative weight proportions as their assigned monetary value. Of these three denominations, only quarter dollar nonsense pieces were struck, according to the report.
Nonsense pieces struck during the two trial strike periods were submitted by the U.S. Mint to three coin-acceptance equipment manufacturers to determine which of the material/denomination combinations could be introduced into circulation without significant modifications to existing coin-processing equipment.
The three coin acceptance equipment manufacturers to which nonsense cents, 5-cent coins and quarter dollars were distributed are Coinco, headquartered in St. Louis; MEI, headquartered in Malvern, Pa.; and SCANCOIN, headquartered in Malmo, Sweden.
Richard A. Peterson, deputy director of the U.S. Mint, said all of the struck nonsense pieces sent to Coinco, MEI and SCANCOIN were subsequently retrieved after field testing so none could end up in the hands of collectors. As the U.S. Mint continues its research and development and expands its alloy candidates and the dissemination of struck nonsense pieces for additional testing by more potential end users, the Mint plans to keep track of the location of each of the nonsense pieces distributed so none wind up in numismatic channels, Peterson said.
The CTC-prepared report recommended, “Each of these nonsense pieces need to be well controlled since such nonsense pieces would be highly prized by numismatists.”
The report presents the following findings, conclusions and recommendations, based on the research and development conducted thus far:
➤ Maintaining the existing coin dimensions, i.e., diameter, thickness, for all future coin regardless of the composition, since conversion costs to coin-processing equipment if dimensions were changed would be cost prohibitive.
➤ Ferromagnetic materials should not be considered for circulating U.S. coins, except potentially for the cent.
➤ Maintaining the current copper-plated zinc composition for the Lincoln cent, even though current production costs total more than double face value. The current composition for ready-to-strike planchets supplied by Jarden Zinc Products is a 99.2 percent zinc, 0.8 percent copper planchet plated with pure copper. The top alternative composition — copper-plated steel planchets from the Royal Mint — offer no cost savings, according to CTC. Other potentially low cost alloys failed to meet one or more of the other provisions of the 2010 legislation, according to CTC. “Aluminum alloys jam or destroy some types of coin-acceptance or coin-handling equipment, which would require costly upgrades to enable this equipment to process aluminum-based coins,” according to CTC’s findings. “The surface-modifying technologies (to reduce tarnish and/or corrosion of single-alloy coins) evaluated in this study lacked application maturity. Other alternatives did not offer sufficient corrosion and/or wear resistance.
➤ Continue development of copper-based alloys for the 5-cent denomination, two of which result in a yellow hue and a third a slightly golden appearance. All three alternatives would weigh less than the current 5 grams for the Jefferson 5-cent coin composed of a homogenous alloy of 75 percent copper and 25 percent nickel, and therefore would require retrofitting of vending and other coin-acceptance equipment to accommodate the lighter weight. The reduction in weight is based on the diameter remaining at the current 21.21 millimeters, but the thickness likely changing. Savings by using one of the top alternatives would be generated through decreased annealing and ancillary energy costs, not metal costs.
➤ For the dime, quarter dollar and half dollar, consider replacing the current clad composition of two outer layers of 75 percent copper and 25 percent nickel bonded to a core of pure copper with a copper-based alloy, 669z, clad to C110 copper alloy.
“Based upon validation testing completed in this study, quarter dollar nonsense test pieces of this construction showed evidence of being a seamless alternative to the incumbent quarter dollar coin,” according to CTC. CTC’s recommended alternative would also cast a yellow hue, which could cause some confusion with the dollar coins.
CTC recommended that the current composition for the dollar coins, manganese brass clad — outer layers of 77 percent copper, 12 percent zinc, 7 percent manganese and 4 percent nickel bonded to a core of pure copper — be maintained. The research and development testing only examined alloy alternatives for the dollar coin based on steam corrosion tests. None of the four alternatives steam-tested offer any cost improvements.
Should any changes in circulating coin compositions be made, all denominations whose composition is changed should be introduced approximately at the same time to minimize conversion costs to coin-acceptance equipment.
The report also recommended the Mint continue long-range research on surface engineering of zinc or low-carbon steel for the cent, which may uncover a useful technology that would permit the elimination of the copper plating and its associated costs. CTC offered as suggestions inexpensive paints or colored particles on bare zinc covered with a wear-resistant coating
For lower denomination coins, CTC recommends continued pursuit of stainless steels; for higher denomination coins, the report recommends continued study of stainless steel alloys clad to C110 copper alloy for the dime, quarter dollar and half dollar, with the electromagnetic signatures to replicate the current compositions (which would negate the need to upgrade coin-processing equipment for the dime and quarter).
Plated alloys for denominations higher than the quarter dollar were not recommended by CTC because they pose security and fraud issues. “Plated-steel coins require substantially broader acceptance limits in automated coin-processing equipment, with significant impacts to coin sorting and counting, and would lead to less secure coin identification standards,” according to CTC.
It was recommended the Mint maintain its current suppliers for materials used to produce circulating coins.
Use of steel, stainless steel and/or aluminum would likely require expanding the pool of alternative metals suppliers.
The December report suggests that validation testing must be completed for proposed changes to the materials of construction for circulating coins to quantify:
➤ The variability of material properties from multiple lots of proposed coin materials; and
➤ The variability in finished coins through completion of simulated coin production runs each of at least 1 million test pieces.
“Coins of any given denomination should be made at different times and under a variety of common production conditions,” according to the report. “Samples of coins from each of these test conditions should then be tested to establish more robust standard deviations in the characteristics to be expected from volume production of these coins.
“These tests must also assess the impact of temperature and humidity; coin scratches, gouges, tarnish, corrosion, wear and slight bends; and other stakeholder-defined test conditions.”
Complicating the management of coin production, according to the report, orders from the Cash Product Office of the Federal Reserve are estimated one month in advance, but the actual quantity of coins ordered can still vary by as much as 30 percent.
“The actual number of coins required is not defined by the Federal Reserve Banks until the finalization of the order as production actually begins,” according to the report. “These shifting, short-term changes in coin demand impact the required installed machine capacity in addition to having an effect on staffing and the supply chain.”
The 400-page report can be found online at www.usmint.gov/about_the_mint/PDFs/Current_Technologies_Corporation_Report_Alternative_Metals_Study_August_31_2012.pdf. ■