U.S. Mint Moves to Ban Penny Melting
Soaring Prices for Copper Make Pennies Worth More Melted Than in Your Pocket
By QUIANA BURNS
Dec 14, 2006
Find a penny, pick it up, and all day you'll have good luck.
Find a penny, melt it, and you could get locked up.
Effective today, the U.S. Mint has implemented an interim rule that makes it illegal to melt nickels and pennies, or to export them in mass quantities.
With the soaring price of copper, a melted-down penny or nickel is now worth more than it would be in its regular state at face value.
Officials at the Mint say in recent months they have received numerous inquiries into whether or not it is illegal to melt coins.
"We are taking this action because the Nation needs its coinage for commerce," said U.S. Mint Director Edmund Moy in a statement. "Replacing these coins would be an enormous cost to taxpayers."
How big a cost? Moy told ABC News that if just 1 percent of all the nickels and pennies that are in circulation were melted down, taxpayers would have to foot a $43 million bill.
To avoid this costly coin shortage, the new regulations prohibit the melting or treatment of all 1- and 5-cent U.S. coins.
The rules also prohibit the unlicensed exportation of these coins, except that travelers may take up to $5 in pennies and nickels out of the country, and individuals may ship up to $100 in these coins.
Violators of these new regulations face up to a $10,000 fine, imprisonment of up to five years, or both.
This is not the first time the government has tried to put a stop to coin melting.
The Department of the Treasury implemented similar regulations prohibiting the exportation, melting or treatment of silver coins between 1967 and 1969, and 1-cent coins between 1974 and 1978.
"I'd be terribly surprised if there was melting going on right now," said coin expert and author David L. Ganz.
"Now, if you told me people were exporting [coins for melting] to China to make washers that wouldn't surprise me at all," Ganz said.
Rapid industrial growth in countries like China and India has dramatically driven up the price of scrap metal.
In fact, copper prices are up more than 180 percent since mid-2003, selling for just more than $3 a pound.
That means the modern penny (made after 1982) is worth 1.73 cents with production costs included. The nickel, which is made of copper and nickel, is actually worth 8.34 cents when production costs are included.
In the United States, theft of copper material, like pipes from constructions sites, has been on the rise for several years as copper prices have skyrocketed.
Still, experts like Ganz say the slight profit is not worth all the trouble.
"It's very labor intensive, and the price is really not high enough at the present time," Ganz said.
Whether or not melting nickels and pennies is lucrative, the interim rule is in place.
The public can offer comments to the U.S. Mint on the regulations for the next 30 days. Moy will take those comments into consideration and then issue the final rule within 120 days.
"The message is clear," Moy said. "Don't even think about it [melting coins] because penalties are severe. It's just not worth the effort."