​Penny & Nickel Production Costs Mint $104m Per Year​​

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March 5, 2021

A review of the penny and nickel production by the White House offers some alternatives to a problem. It costs 1.8 cents to make a penny, according to the U.S. Mint, but they are studying a change to the mix of metals.

The price of producing a penny and nickel is expensive, costing the federal government about $104.5 million last year. The new metals could be used to make quarters, dimes and nickels, a study Congress mandated in 2010 to examine ways to save money. Materials could be altered for the first time in half a century or more, potentially changing the color and diminishing the weight of coins.

The budget goes bigger, directing the U.S. Treasury to “assess the future of currency,” noting that production and circulation of coins and paper money have changed little in recent decades despite the growth in use of credit cards, online payments and other electronic transactions.

For now, Treasury is only looking at possibilities.

“These studies will analyze alternative metals, the United States Mint facilities, and consumer behavior and pref­erences, and will result in the development of alternative options for the penny and the nickel,” the budget says.

So far, Mint research indicates that the nickel can be produced for about, well, five cents. But no matter what it does, the penny will likely cost more to make than its face value.

Could that mean the end of the penny? The budget doesn’t say.

Other countries have decided to do away with it, including Britain, Australia and Israel. Most recently, Canada stopped distribution of the coin in 2013.

The latest documents sidestepped the heated topic of replacing dollar bills with dollar coins.