In the wake of rising copper, nickel and zinc prices, and a United States melting ban on cents and nickels, is a change in the composition of U.S. coins in the works?
Doug Andrews, a collector and mint consultant from Winnipeg, said the Royal Canadian Mint?s agreement with a U.S. company last year could point to changes in the way the U.S. makes coins.
Canada started replacing its cupronickel planchets for the five-cent coin with plated steel in 1999.
As a result, Canada has one of the lowest material costs in the world among major mints. The move was in anticipation of rising base-metal prices, which has caused the U.S. Mint to spend more producing cents and nickels than their face values.
The RCM signed a licensing agreement in April 2006 with Jarden Zinc Products Inc., of Greenville, Tenn., for Jarden to produce a billion multi-ply plated coin blanks for ?potential customers in the Americas? using technology that the RCM patented. The U.S. Mint already orders about 7 billion copper-coated zinc blanks from Jarden annually. The RCM has also provided planchets to the U.S. for Sacagawea dollars.
Andrews said the RCM has also taken another step to address coin production costs.
?They are doing the opposite of the U.S. ? instead of banning melting, they are doing it themselves, culling all the nickel- and high-copper-content coins and returning them to the mint,? he said. ?They realized that if they didn?t do it, everyone else would, so they are actively participating in a mass melt of their own coins.?
U.S. Mint Director Ed Moy issued a temporary ban on the melting of cents and nickels Dec. 14, and also placed restrictions on their export. He said the steps were necessary to prevent melting in the wake of base-metal prices outpacing the face value of the coins.
Andrews said the RCM has contracted with a company that places machines in stores that, for a small discount, accepts coins in exchange for notes or credit at a bank.
He said this has been occurring for about the last 12-18 months, with the result that almost all the circulating coins now found in Canada in circulation are dated 2000 and after.
?So the government is taking high-nickel and high-copper content coins out of circulation, and replacing them with low-metal-value coins. Do you realize what that does to its seignorage?? Andrews asked.