U.S. Treasury ends penny production to save millions
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 discontinued production. This move is expected to save £46 million annually. How so? The production cost of the pennies exceeds their value by more than three times.
As stated in a Treasury Department announcement, the order placed in May for zinc-copper blanks will provide the material for minting the final series of pennies. The department described this decision as "another example of reducing the waste of American taxpayers' money."
According to the "Wall Street Journal," the last minted coins of this series will enter circulation next year. A department representative mentioned that businesses will need to round prices to the nearest 5 cents when the previous pennies are gone. However, this change won't happen quickly, as 113 billion of these coins are currently in circulation.
Losses for the U.S. Mint
The U.S. Mint suffered a £70 million loss in the last fiscal year while minting 3.2 billion coins. Future savings from halting production are estimated at £46 million annually. This year's report noted that the cost of producing one penny is approximately 3.69 cents.
The minting of five-cent coins, commonly known as nickels, has also incurred losses for 19 consecutive years, costing approximately 14 cents. This is attributed to the rising prices of metals. Pennies consist of 96% zinc and 4% copper, while nickels are made from an alloy of 75% copper and 25% nickel. Nonetheless, there are currently no plans to withdraw these latter coins.
In February, President Donald Trump advocated for stopping the production of pennies, citing the cost of the coins. This idea isn't new, as Treasury Secretary Jack Lew discussed it publicly 2015 during the Obama administration.
