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GAO sees coin composition savings shrink

The potential amount of money to be saved by changing the composition of U.S. coinage is shrinking according to a December 2015 report by the Government Accountability Office.

Both the Mint and GAO ruled out a change in the cent's composition, which currently costs around 41 percent of the cent's face value, according to www.coinflation.com.

Both the Mint and GAO ruled out a change in the cent’s composition, which currently costs around 41 percent of the cent’s face value, according to www.coinflation.com.

Ruled out was any significant change to the quarter because the Mint believes low-value foreign coins will be used as slugs in vending machines. This cuts in half the potential cost savings from $83 million to $39 million each year.

Also ruled out by the Mint and concurred with by GAO was any change to the cent. No cheaper composition could be found that would serve as well as the current copper-coated zinc.

Left on the table was the future of the nickel and the dime.

The GAO noted that there are four potential compositions: a variation of the current cupronickel alloy, nickel-plated steel, multi-ply plated steel and stainless steel.

The three steel compositions are problematic for the vending industry, but GAO notes that the industry has overestimated the number of machines affected. Where the industry says 7 million machines would need changing, GAO finds only 4.5 million existing in the country.

Change to the cupronickel alloy would  allow old and new alloy coins to circulate side by side without modification needed to vending machine mechanisms.

However the cost savings would be just $8 million a year.

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This is because the amount of copper would be increased slightly from 75 percent to 77 percent, nickel would be reduced from 25 percent to 20 percent and the 3 percent balance would be made up with manganese.

GAO notes that the Mint has not made any specific recommendations to Congress. Its next report is due in December 2016 when such recommendations might be made.

In part of the report the GAO took exception to how the Mint estimated cost savings.

This article was originally printed in Numismatic News.
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