Vending machines, toll booths and parking meters no longer require us to carry coins. 

As more Americans pay for things with plastic, they are ditching the metal currency and more of it is ending up in the trash.  One Pennsylvania company is harvesting the discarded coins that end up in the waste stream and making millions in the process.

A Pennsylvania waste management company, Reworld, harvests coins from incinerated trash. According to a recent Wall Street Journal article on the company’s process, some $68 million in coins are tossed out in the trash each year.  Reworld, a waste-to-energy company, noticed more coins in the waste stream as it was recovering other metals.  In 2017 it started its process to recover millions of dollars in coins that were headed to the landfill.  During the past seven years, it has collected at least $10 million in coins.

The Reworld process involves taking already incinerated trash and separating out the metals in various sorting machines.  The resulting coins are then washed.  At the final stage, the coins are sorted by human checkers who remove foreign currency and old metro tokens.  Because the trash was incinerated, some of the coins are damaged beyond recognition and can not be redeemed.  Of the $10 million Reworld has collected, $6 million was good enough to use.  Reworld turns the coins over to a third party to count and deposit in local banks.

Federal Government Grapples with Handling Mutilated Coins

The story about Reworld comes at a time when the federal government and waste companies are grappling with what to do about coins in the waste stream.  Earlier this month, the U.S. Mint announced in the Federal Register that it plans to close its Mutilated Coin Redemption Program, which allowed the face value exchange of bent, damaged, and partial coins.  According to Coin World, in the May 3 announcement, the Mint explained that the program operates at a loss and is too cumbersome to manage.  According to the Mint, some of the submissions have included numerous counterfeit coins, resulting in lawsuits and suspension of the program.  The Mint is seeking public comment on its announcement through July 2. 

The Mutilated Coin Redemption Program was started in 1911 with the goal of taking old coins out of circulation.  Recyclers used to return damaged coins to the Mint to be reimbursed for the face value of the coins.   Regulations were proposed in 2021 to protect against counterfeiting and fraud.  Those regulations were going to restrict recyclers from participating in the program, by making ineligible coins that were damaged by any “industrial or recycling process.”  Industry representatives were concerned the result would be more coins ending up in the landfill.  The recent announcement by the Mint withdraws this proposed 2021 rulemaking.

The Rising Cost of Making Coins

The Mint released a related study last year examining the need to adopt new alloys for coin production to save millions of dollars per year.  The rising cost of metals like copper, nickel, and zinc has increased how much it costs to make a penny, nickel, and dime. 

The Secretary of the Treasury’s biennial report on U.S. Mint coin production, released in May 2023, revealed that it cost almost three cents to make one cent:  the cost of manufacturing one penny is now 2.7 cents.  Similarly, it now costs more than ten cents to make a nickel.  The U.S. Mint sells coins to Federal Reserve Banks to raise money to help finance the national debt, but the sale of pennies and nickels is now a money-losing operation. 

Raw material costs have been going up across all commodity classes for the past several years, reports the online newsletter Supply Chain Dive.  These price increases are affecting the cost of coin production. The U.S. Mint report states this is the 17th consecutive fiscal year that the unit cost for both pennies and nickels remained above the face value of the coins. The mint compensates for the losses from selling pennies and nickels by making money on the sale of dimes and quarters.  For fiscal year 2022, it costs five cents to produce a dime and 11 cents to make a quarter.  In the wake of rising raw material costs, most manufacturers have been forced to raise their prices or reformulate their products.  The U.S. Mint, however, cannot raise the price of a penny or a nickel.  Consequently, the Mint in its report urges Congress to authorize the use of other metal alloys in coins to defray these losses.

New Metal Alloys Explored  

The Mint has been studying options for new metal alloys for years to address cost and supply chain concerns.  The most recent report states that, if approved by Congress, it could start using 80/20 Cupronickel in nickels, dimes, quarters, and half dollars within a year, saving about $12 million annually.  Another promising alloy is C99750T-M, a mix of copper, nickel, zinc, and manganese.   Moving to this alloy could save anywhere from almost $13 million to $51 million per year. 

Moving to copper-plated steel (CPS) for pennies is another change the Mint is evaluating.  Pennies are now made of copper-plated zinc (CPZ).  Pennies made from CPS may cost more than pennies made from CPZ, however, the current CPZ penny has only one supplier of planchets (the blank rounds pressed into coins) creating a supply chain concern.  Moving to CPS pennies offers the potential for multiple suppliers for a more secure pipeline, avoiding cost and supply chain problems in the future.

Last year, bipartisan legislation was reintroduced to allow the Mint to adjust the metal content of coins to save money.  “The Coin Metal Modification Authorization and Cost Savings Act” authorizes the Mint to modify the metallic composition of circulating coins if the modification will reduce costs, allow for a seamless transition into circulation, and have minimal impact on the public.  Impact on the public includes considerations such as if the coins could be accepted in current vending machines.  

Supply Chain and Raw Material Prices Peak Interest in “Change”

The opportunity to save money has some Members of Congress urging the adoption of metal modifications.  Last year, the bipartisan efforts to modify coin composition were introduced in both the U.S. House of Representatives and the U.S. Senate.  Similar legislation has been introduced in a bipartisan way in previous years but has not yet become law.   In their press release announcing their effort last month, Sen. Maggie Hassan (D-NH) said “It’s just common-cents to use every tool at our disposal.”  Sen. Joni Ernst (R-IA) added “It’s absolute non-cents… to spend ten cents to make just one nickel.”

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