Collectors and investors will soon learn whether the U.S. Mint’s
production and issuance of a 1-ounce .9995 fine palladium American
Eagle $25 bullion coin could be accomplished at no net cost to taxpayers.
CPM Group, based in New York City, is conducting, under contract
with the Mint, a palladium market study required under provisions of
the American Eagle Palladium Bullion Coin Act of 2010. The firm is
scheduled to complete its research July 3.
The independent, third-party marketing study required under Public
Law 111-303 is aimed at determining if there is “adequate” marketing
demand for a palladium investment coin.
According to U.S. Mint spokesman Michael White June 12, CPM Group
was awarded the $99,000 contract to conduct the marketing research
between April 4 and July 3. The company is a commodities market
research, consulting, asset management and investment-banking firm.
CPM Group received the contract under a second solicitation
earlier this year seeking vendors to conduct the marketing study. A
$49,000 contract awarded Sept. 30, 2011, to the British-based Thomson
Reuters’ GFMS to conduct the same marketing study was rescinded by the
U.S. Mint in December after Mint officials learned of a problem
encountered as a result of the contract procurement process.
Thomson Reuters’ GFMS is one of the world’s leading economics
consultancies in precious metals, specializing in research into the
global gold, silver, platinum and palladium markets.
“The statute requires the United States Mint to obtain the study
services from ‘a reputable, independent third party,’ ” according to a
statement released Jan. 13 by White. “After we awarded the [original]
contract, the United States Mint realized that the vendor had accepted
palladium industry sponsorship for prior surveys and reports.
“This was by no means the fault of the vendor, which we
nonetheless believe to meet the requirement for a reputable firm.
However, we believed that the vendor’s acceptance of palladium
industry sponsorship would not be viewed as meeting the requirement
for an ‘independent third party.’
“Accordingly, we decided to terminate the contract for the
convenience of the government and resolicit the work with an
appropriate conflict of interest provision.”
Legislation for the American Eagle Palladium Bullion Coin Act of
2010 was introduced by Rep. Denny Rehberg, R-Mont. The act requires
that the Treasury secretary mint and issue 1-ounce .9995 fine
palladium bullion coins with a $25 face value not more than one year
after the submission of the study to the Treasury secretary and to Congress.
Public Law 111-303 grants the Treasury secretary authority to
issue both Proof and Uncirculated versions of the palladium coins for
collector sales in addition to the bullion coins. The Proof and
Uncirculated coins would both be considered numismatic products to be
directly sold to the public. The bullion coins would be sold through a
network of authorized distributors.
The authorizing act also permits the finish of the Proof and
Uncirculated versions to be changed annually following the inaugural release.
The act mandates the American Eagle palladium coins to have an
obverse that is a high-relief rendition of the obverse of the Winged
Liberty Head dime (1916 to 1945), and a reverse with a high-relief
rendering of the reverse of the American Institute of Architects gold
medal, introduced in 1907. Both the original coin and medal designs
are the work of American sculptor Adolph A. Weinman.
Under Public Law 111-303, the Proof palladium version could be
struck only at the West Point Mint in New York. Proof American Eagles
struck at the West Point Mint bear the production facility’s W Mint mark.
According to Public Law 111-303, “should the Secretary determine
that it is appropriate to issue proof or uncirculated versions of such
coin, the Secretary shall, to the greatest extent possible, ensure
that the surface treatment of each year’s proof or uncirculated
version differs in some material way from that of the preceding year.”
An Uncirculated version of a palladium American Eagle could be
produced at any of the remaining three Mint production facilities —
Philadelphia, San Francisco and Denver.
The metal to be procured for the contracted production of
planchets for the palladium coins would be purchased from “palladium
mined from natural deposits in the United States, or in a territory or
possession of the United States. ...”
Currently, the United States has only one primary palladium
producer, the Stillwater Mining Co., which operates two mines in
U.S. Mint officials met face-to-face in Philadelphia in November
with the Mint’s authorized purchasers to outline the provisions for a
palladium bullion coin and receive feedback about the possibility of
resurrecting production of platinum American Eagles, likely beginning
no earlier than 2013. Palladium and platinum are among the platinum
American Eagle platinum bullion coins were last struck and sold by
the Mint to authorized purchasers in November 2008, when sales of 800
half-ounce fractional coins were recorded.
At the November meeting in Philadelphia, representatives of the
authorized purchasers identified demand for the 1-ounce platinum
version, but recommended the Mint not produce fractional sizes, Mint
officials said. ■