US Mint Releases 2018 Biennial Report

The United States Mint has released is Biennial report for 2018 to Congress and to the public. The report is the fourth such report released under the Coin Modernization, Oversight, and Continuity Act of 2010, Public Law 111-302, which authorizes the Secretary of the Treasury to conduct R&D on alternative metallic materials for all circulating coins, with the goal of reducing production costs. That same Act also requires the Secretary of the Treasury to provide the report to congress.

As the report is public record, you can find it at this link on the US Mint site.

The big news coming out of this report is the rise of production cost for coinage that is in circulation. Overall a Cent costs 2.06 cents to produce while Nickels cost 7.53 cents to produce. Both of these coins costs of production are over their respective face values for the thirteenth consecutive fiscal year.

Fiscal year (FY) 2018 unit costs are higher than those reported in our 2016 Biennial report. The unit costs for FY 2018 are: pennies (2.06 cents), nickels (7.53 cents), dimes (3.73 cents), and quarters (8.87 cents). The unit cost for both pennies and nickels remained above face value for the thirteenth consecutive fiscal year. While Federal Reserve orders for new coin decreased in FY 2017, orders decreased further in FY 2018. FY 2017 circulating coin shipments to the FRB decreased by 2.2 billion units (13.7 percent) to a total 14.1 billion coins compared to FY 2016. FY 2018 circulating coin shipments to the FRB of 13.7 billion units decreased by 400 million units (2.8 percent) compared to FY 2017.

US Mint Biennial Report to Congress

As part of the Act, the Mint is required to test alternative metals for coins in an effort to reduce production costs as well as enhance durability. Currently there are four alternatives in consideration.

  • 80/20: A variation on the present cupronickel (75% copper (Cu)/25% nickel (Ni)), with more Cu, less Ni, and some manganese (Mn). Nominal composition of 77% Cu, 20% Ni, and 3% Mn.
  • C99750T-M: A leaner potentially seamless alloy developed jointly with the National Institute of Standards and Technology (NIST), which contains less Cu and Ni and substitutes zinc (Zn) and Mn. Nominal composition 50.75% Cu, 14% Ni, 33% Zn, and 2.1% Mn. This alloy represents what we believe to be the leanest or lowest material cost possible. It also maintains the key seamless characteristics of electromagnetic signature (EMS) and color.
  • Nickel Steel: A monolithic alloy developed by the Mint, which is austenitic (not attracted to magnets) and a less expensive co-circulate alternative to stainless steel. Nickel content is 25%, with the balance being lower cost iron and some manganese.
  • Nickel Plated Silicon Steel: An alternative to the commonly used nickel or multi-ply plated steels in the world. This option could provide a co-circulate alternative with a distinguishable EMS and therefore more security than other commonly available plated steel coins.

Of the alternative materials above, the first two are considered seamless meaning that no modification to coin accepting equipment would be required. The other materials are considered co-circulating meaning that they could coexist with current coins in circulation but modifications to coin handling equipment could potentially be required. That said, those materials offer the Mint the greatest cost savings overall.

While the report is somewhat lengthy and technical in places, it is a fantastic insight into how the Mint uses its R&D budget but also the costs involved in producing the coins in your pocket.

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