The Obama administration is asking Congress to let it change the recipe for making pennies and nickels. It turns out the change actually costs more to produce than it's worth, CNNMoney reported.
Each penny actually costs 2.4 cents to make. Each nickel costs 11.2 cents. The Obama administration in its latest budget proposal is suggesting the US Mint trim costs by changing the composition of the coins. Such a move could save the US more than $100 million a year, Time said.
The penny is already made mostly of copper-plated zinc while the nickel is mostly copper. The penny hasn’t been made of pure copper since 1837, Dow Jones Newswires noted.
The Treasury has been exploring new metals that could be used in coin production since 2010 but hasn’t yet come up with a cheaper mix, said CNNMoney. Base metal prices have been on the rise across the board in recent years, with copper, nickel and zinc posting triple-digit percentage increases.
And using cheaper metals may not bring the price of a penny below a penny, according to CNNMoney. “Just the administrative cost of minting 4.3 billion pennies costs almost a half-cent per coin by itself, leaving precious little room to make a penny for less than a cent, no matter the raw material used,” it said.