From the archive, originally posted by: [ spectre ]
New rules outlaw melting pennies, nickels for profit
By Haraz N. Ghanbari, AP – 12/14/2006
The value of the metal in a nickel is now 6.99 cents, while the penny’s
metal is worth 1.12 cents, according to the U.S. Mint
By Barbara Hagenbaugh, USA TODAY
WASHINGTON – People who melt pennies or nickels to profit from the
jump in metals prices could face jail time and pay thousands of dollars
in fines, according to new rules out Thursday.
Soaring metals prices mean that the value of the metal in pennies and
nickels exceeds the face value of the coins. Based on current metals
prices, the value of the metal in a nickel is now 6.99 cents, while the
penny’s metal is worth 1.12 cents, according to the U.S. Mint.
That has piqued concern among government officials that people will
melt the coins to sell the metal, leading to potential shortages of
pennies and nickels.
“The nation needs its coinage for commerce,” U.S. Mint director Ed Moy
said in a statement. “We don’t want to see our pennies and nickels
melted down so a few individuals can take advantage of the American
taxpayer. Replacing these coins would be an enormous cost to
There have been no specific reports of people melting coins for the
metal, Mint spokeswoman Becky Bailey says. But the agency has received
a number of questions in recent months from the public about the
legality of melting the coins, and officials have heard some anecdotal
reports of companies considering selling the metal from pennies and
nickels, she says.
Under the new rules, it is illegal to melt pennies and nickels. It is
also illegal to export the coins for melting. Travelers may legally
carry up to $5 in 1- and 5-cent coins out of the USA or ship $100 of
the coins abroad “for legitimate coinage and numismatic purposes.”
Violators could spend up to five years in prison and pay as much as
$10,000 in fines. Plus, the government will confiscate any coins or
metal used in melting schemes.
The rules are similar to those enacted in the 1960s and 1970s, when
metals prices also rose, the Mint said. Ongoing regulations make it
illegal to alter coins with an intent to commit fraud. Before today’s
new regulations, it was not illegal to melt coins.
Metals prices have skyrocketed worldwide in recent years in response to
rising demand, particularly in rapidly growing China and India. Prices
for zinc, which accounts for nearly all of the metal in the penny, have
risen 134% this year, according to the London Metal Exchange. Even
accounting for a recent decline, the price of copper is up 50% since
the start of 2006. Nickels are produced from 75% copper and 25% nickel.
Although the Mint’s new rules are immediately going into effect, the
Mint will take comments from the public for a month.
The government has changed the composition of coins in response to
rising metal prices. The penny, which was pure copper when it was
introduced in 1793, was last changed in 1982.