Friday, April 14, 2006

Not a penny more, nor a penny less...

In the near future, it is posible that the scrap value of the penny (1 cent) coin could exceed its actual value of 1 cent ! What happens in that case ? So, basically, it costs more than 1 cent per coin to produce it.

Some excerpts...
The soaring prices of zinc and copper have prompted fears in the US over the future of its one cent coin.
...
In the US, the issue is the steeply-rising cost of zinc. Cent coins were once almost entirely made from copper - but the increasing copper price meant that in 1982 they switched to being made from 97.6% zinc and only 2.4% copper. The changeover to cheaper metals brought annual savings to the US Treasury of around $25m (£14m). If zinc becomes unaffordable, expect further changes.
So, what is the solution ?
The same as it has been for hundreds of years, says Mr Chard. Reduce the proportion of the expensive metal, switch entirely to a cheaper metal or withdraw the coin.

1 comment:

Meeta Yadav Vouk said...

It is crazy. I remember in Zambia it used to cost the zambian govenrment 40 kwachas to make 1 kwacha coin. But they never changed it or withdrew it.