U.S. Treasury halts penny production to save $56 million
On Thursday, the United States Treasury Department announced that it had ordered the last batch of one-cent coins to be minted, after which it would no longer order them. This is expected to save $56 million annually. How? The production cost of the pennies exceeds their value by more than three times.
According to a Treasury Department statement, the order placed in May for zinc-copper blanks will be used to mint the last series of pennies. The department stated this is "another example of reducing the waste of American taxpayers' money."
As reported by the "Wall Street Journal," the last minted coins of this series will enter circulation next year. A department representative mentioned that businesses will have to round prices to the nearest nickel when the previous pennies run out. This transition won't happen quickly, as 113 billion of these coins are currently in circulation.
Losses for the U.S. Mint
The U.S. Mint lost $85.3 million last fiscal year from minting 3.2 billion coins. Future savings from ceasing production are estimated at $56 million annually. The report from this year noted that the cost of producing one penny is 3.69 cents.
The minting of five-cent coins, commonly known as nickels, has also resulted in losses for 19 consecutive years, costing 13.78 cents each. This is due to the rising prices of metals. Pennies comprise 96% zinc and 4% copper, while nickels are made from an alloy of 75% copper and 25% nickel. However, there are currently no plans to withdraw nickels.
In February, President Donald Trump called for stopping the production of pennies, highlighting the cost of the coins. The idea is not new, as Treasury Secretary Jack Lew discussed it publicly 2015 during the Obama administration.
