Melting Down Money

The rise of prices in base metals has caused possessiveness and even theft of various common items made of these now more valuable metals. This theft and vandalism, what some call the “Red Gold” Rush, has been hurting basic functions of society. In Italy copper has been ripped off of bridges, train equipment, and tombs. In some cases, like at South Africa construction sites, the crime is organized.

The value of the metal has gotten to the point where it is worth more than the coins it is used to make. This excerpt in from the Wall Street Journal:

U.S. Mint officials said they were putting into place rules prohibiting the melting down of one-cent and five-cent coins. The rules also limit the number of coins that can be shipped out of the country. Officials said they had received a number of inquiries from the public in recent months concerning the value of the metal in the coins and whether it was legal to melt them.

Because of the prevailing prices of copper, zinc and nickel, the cost of producing pennies and nickels exceeds the face value of the coins.

A nickel is 25% nickel and 75% copper. The metal in one nickel costs 6.99 cents. When the Mint’s cost of producing the coins is added, the total cost for each nickel is 8.34 cents.

Modern pennies have 2.5% copper content with zinc making up the rest of the coin. The copper and zinc in a penny are worth 1.12 cents.