U.S. Mint exploring alternative metal options
- Published: Feb 6, 2012, 7 PM
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 dollar coins.
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. ¦
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