|MadSci Network: Other|
I wouldn't start melting down my pennies, looking to get into the Zinc market yet if I were you. Modern pennies (known as Lincolin pennies at the US mint) are 97.5% Zinc, and 2.5% Copper, mostly copper plate. We have some links and information about the manufacture of Lincoln pennies in our archives (answer 1102446275.Ot). These should provide some good background on the composition and history of the penny.
The best source for information on the cost of making a penny is the US Mint. In fact, I went there and took a look at the mint's Annual Reports for 1998-2004 to see how much it cost to make a penny. Here's what I found:
|Distribution to FRB||0.0001||0.0001||0.0002||0.0002||0.0002|
So, you can see that the cost of making a penny, in terms of raw materials and manufacturing (Production Costs), the cost of getting the penny from the mint to the Federal Reserve Bank (FRB), and the cost of administrating the production of each penny, has been close to about 1 cent for the last 6 years. It rose from about 0.82 cents in 2000 to 0.98 cents in 2003.
The annual report for 2005 hasn't come out yet, and we're still in the middle of 2006, but the US Mint recently (sometime in May 2006) indicated in a letter to the US Congress that the cost of manufacturing a penny in 2006 would be about 1.23 cents (not 3 cents. Isn't hyperbole wonderful?). Assuming that the costs of distribution to the FRB and administration are about 0.04 cents, that puts the price of production at 1.19 cents per penny. As early as April 2006, there was speculation that the price of a penny would be about 1.4 cents for 2006.
Why is this? Well, it turns out that the price of metals, in particular Zinc, has been very high lately. Currently, the price of the zinc in a penny is running at about 0.8 to 0.9 cents, which is about double of what it was last year. Thats about the total cost of production for pennies minted between 2000 and 2004. There is about 0.4 to 0.6 cents worth of additional costs that go into the production of the penny, which brings the cost of a penny up to the 1.2 to 1.4 cent range.
Keep asking questions!
US Mint Annual Reports for 2000, 2001, 2002, 2003, and 2004.
OFF THE CHARTS; A Penny for Your Thoughts, and 1.4 Cents for the Penny. By FLOYD NORRIS. New York Times, April 22, 2006, Saturday; Business/Financial Desk. Late Edition - Final, Section C, Page 3, Column 1, 543 words
Coins cost more to make than face value. By Barbara Hagenbaugh. USA Today. May 9, 2006.
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