The U.S. Mint’s research and development into alternative coinage
metals for six U.S. coin denominations includes consideration of
whether additional cost savings could result from the acquisition of
ready-to-strike planchets rather than coinage strip from which the
Mint would punch planchets.
Currently, only the Lincoln cent is struck on finished,
ready-to-strike planchets supplied by a lone vendor, Jarden Zinc
Products in Greeneville, Tenn. Planchets for the 5-cent coin, dime,
quarter dollar, half dollar and dollars are finished from raw blanks
the Denver and Philadelphia Mints punch from coinage strip that is
currently provided by Olin Brass in East Alton, Ill., and PMX
Industries in Cedar Rapids, Iowa.
U.S. Mint Deputy Director Richard A. Peterson told Coin
World Jan. 27 in a telephone interview that the alternative
metals study begun in 2011 and required to be completed by the end of
calendar year 2012 is the largest initiative the Mint has undertaken
in more than 40 years.
The Coin Modernization, Oversight, and Continuity Act of 2010
requires the Mint to conduct extensive research and development for
metals alternatives, and have a detailed report with the recommended
selections to the Treasury secretary and Congress by Dec. 14, 2012.
The enabling legislation was Congress’ response to the rising
costs of metal in the production of the cent and 5-cent denominations,
both which cost more than double face value during Fiscal Year 2011.
Though the measure was driven by a need to reduce the cost of
producing the two lowest denominations, the act authorizes the Mint to
explore metal alternatives for all six denominations: the
copper-plated zinc cent, copper-nickel 5-cent coin, copper-nickel clad
dime, quarter dollar and half dollar, and the manganese-brass clad
Peterson said he is not at liberty to discuss how many different
potential planchet or coinage strip vendors have been asked by
Concurrent Technologies Corp. in Johnston, Pa., to submit samples to
use for test strikes, or whether any of the current three vendors are
among those participating in the study.
Concurrent Technologies Corp. is directing the alternative metals
research and development initiative in conjunction with the Mint under
a $1.5 million contract awarded to the firm on Aug. 24, 2011. The
contract runs through June 30, 2013.
Peterson said he is also not at liberty to discuss details on how
many different metallic alternatives have been tested as possible
replacements for the current compositions.
The overall initiative is addressing coinability, durability,
possible requirements for additional production equipment, and
maintenance of each denomination’s existing electromagnetic signature
for vending machine use.
The first stage of the study has been completed, with the field of
possible alternatives for each denomination narrowed down. The first
round of test strikes were produced in December at the Philadelphia
Mint, Peterson said.
Pre-production runs will also have to be conducted to confirm cost
estimates for the compositions selected, Peterson said. Additionally,
the Mint will have to confirm it can be supplied with adequate metals,
Peterson said, regardless if it is in planchet or coinage strip form.
“If we pick this super fancy alloy, is there a supply chain out
there that can supply that reliably and consistently in the quantities
we need?” Peterson asked rhetorically. “There’s a lot of work to be
done between now and December.”
The biggest cost savings possible will likely be realized with the
quarter dollar, which contains the most metal, by weight, of the four
denominations struck for and actually released into circulations,
Peterson said. (Half dollars and dollars are not struck for
circulation; circulation-quality production is limited to quantities
needed for collector sales.)
While not required by the 2010 act, Peterson said that as part of
the study, the Mint is projecting circulating mintage levels over the
next several years.
“We have to make some assumptions,” Peterson said. “We’re
projecting between 7 billion and 10 billion coins in each of the next
several years. What if it’s higher or lower? There will be a
sensitivity analysis around that.”
Peterson noted that the FY 2010 mintage of 5.4 billion coins
climbed 37 percent to 7.4 billion coins for FY 2011. ■