The US Treasury ends penny production to save millions annually
On Thursday, the United States Treasury Department announced that it has ordered the last batch of one-cent coins to be minted. After this, it will no longer produce them. This decision is expected to save $56 million annually, as the production cost of the penny is more than three times its face value.
According to a Treasury Department announcement, the order placed in May for zinc-copper blanks will be used to mint the final series of pennies. The department stated this move is "another example of reducing the waste of American taxpayers' money."
The "Wall Street Journal" reports that the last minted coins in this series will enter circulation next year. A department representative said that businesses will have to round prices to the nearest 5 cents when the previous pennies run out. However, this change won't happen overnight, as there are currently 113 billion coins in circulation.
Losses for the U.S. Mint
The U.S. Mint reported a loss of $85.3 million in the last fiscal year from minting 3.2 billion coins. Future savings from stopping production are estimated at $56 million annually. This year's report indicated that the cost of producing one penny is 3.69 cents.
The minting of five-cent coins, nickels, has also resulted in losses for 19 consecutive years, costing 13.78 cents each. This is due to rising metal prices. Pennies are 96% zinc and 4% copper, while nickels are composed of an alloy of 75% copper and 25% nickel. However, there are currently no plans to discontinue these latter coins.
In February, President Donald Trump called for the stoppage of the production of pennies, highlighting their cost. The idea is not new, as Treasury Secretary Jack Lew publicly discussed it in 2015 during the Obama administration.
