U.S. Halts Penny Production, Saving $56 Million: A Move That Could Reshape Coinage in Canada
On Thursday, the U.S. Treasury Department revealed that it had placed an order for the final shipment of one-cent coins, following which they will cease placing further orders. It’s anticipated that this move could result in annual savings of $56 million. Why? Because manufacturing each penny costs over triple its face value.
As per a Treasury Department announcement, the order issued in May for zinc-copper blanks will be utilized to produce the final batch of pennies. The department noted this move as “an additional measure to cut down on the wastage of funds belonging to American taxpayers.”
According to the “Wall Street Journal,” the final coins from this series will be released into circulation in the coming year. A spokesperson for the department stated that once the current pennies are depleted, companies will need to adjust prices to the closest nickel.
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This change won’t occur rapidly, considering that 113 billion of these coins are presently in circulation.
losses for the United States Mint
Last fiscal year, the U.S. Mint incurred a loss of $85.3 million from producing 3.2 billion coins. It is anticipated that halting production could yield annual savings of approximately $56 million. This year’s report highlighted that
The expense of manufacturing a single penny amounts to 3.69 cents.
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The production of five-cent coins, often referred to as nickels, has led to financial losses over 19 successive years, with each coin costing 13.78 cents to produce. This issue stems from increasing metal costs. The composition of pennies includes 96% zinc and 4% copper, whereas nickels consist of an alloy containing 75% copper and 25% nickel.
Nevertheless, there are presently no intentions to discontinue the use of nickels.
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In February, President Donald Trump advocated for halting the production of pennies, citing their high costs. This concept isn’t novel since Treasury Secretary Jack Lew also addressed this issue openly back in 2015 during the Obama administration.
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