A Penny Saved: Copper

We Americans call them "pennies" but they are "cents." Cents from before 1982 have about 1.5 cents of copper in them at current prices. So, if you want to encourage your children to save -- or if you want to do it yourself -- there is hardly an investment with a lower downside risk or a cheaper entry point. Find one coin from before 1982, set it aside, and you are in the game!

The US cent was made of "French bronze" (95% copper and 5% zinc and tin alloy) from 1864 to 1982 -- with the exception of 1943 steel zinc and 1944 brass coins.

In the middle of 1982, the U.S. government switched to the present composition, a nearly-pure zinc core with a thin plating of pure copper. Old coins weigh 3.11 grams; new one 2.5 grams. Zinc cents are noticeably lighter.

Unlike other monetary metals, copper is a latecomer and actually has uses. Gold and silver were nearly useless in ancient times. Bronze was the primary industrial metal for thousands of years. While preferable in many ways, iron is harder to work, requires greater heat, etc. Copper has a low melting point -- as does tin, which when combined with copper forms bronze, nearly as good as iron for most industrial needs in an agricultural society. The first coins date from about 625 BC, but the first copper "coins" appeared only about 300 BC, as one-pound slabs featuring elephants and pigs. Smaller coins came soon, as fiduciary media, primarily in Sicily, but spreading throughout the world as rising prosperity required smaller and smaller units of money for daily transactions.

Among the many kinds of aesthetically and philosophically attractive copper coins are the "Conder tokens" of England, circa 1790, struck by the free market Birmingham Mint of James Watt and Matthew Boulton. Created for merchants, such as ironmaster John Wilkinson, these mememtos of early industrialism celebrated a plethora of bougerois virtues. (See http://www.conderclub.homestead.com/)

Admittedly convenient as minor coinage, copper's true value has always been as an industrial commodity -- and that remains true today. Our electric world would be impossible without it. Athough aluminum wire is allowed by some building codes, aluminum wire is inferior. And you cannot ring a bell with glass. In other words, fiber optics can carry a signal, but no current. Therefore, electromagnetic work can only be performed by copper wire in motors and generators, and in coils and relays.

Get the fact at www.copper.org and read the romance at
http://en.wikipedia.org/wiki/Anaconda_(mine)

(Edited by Michael E. Marotta on 5/04, 9:35am)

Post 1

Saturday, February 3, 2007 - 6:39pm

Pennies, Nickels Worth More Melted Down
POSTED: 11:44 am EST December 14, 2006
WASHINGTON -- Given rising metal prices, the pennies and nickels in
your pocket are worth more melted down than their face value. That has
the government worried.
U.S. Mint officials said Wednesday they were putting into place rules
prohibiting the melting down of 1-cent and 5-cent coins. The rules
also limit the number of coins that can be shipped out of the country.

DEPARTMENT OF THE TREASURY
Monetary Offices
31 CFR Part 82
Prohibition on the Exportation, Melting, or Treatment of 5-Cent and
One-Cent Coins
__________________________________________________
AGENCY: United States Mint, Treasury.
ACTION: Interim rule with request for comments.
SUMMARY: To protect the coinage of the United States, this interim rule
prohibits the exportation, melting, and treatment of 5-cent and one-cent
coins. This interim rule is issued pursuant to 31 U.S.C. 5111(d), which
authorizes the Secretary of the Treasury to prohibit or limit the
exportation, melting, or treatment of United States coins when the
Secretary decides the prohibition or limitation is necessary to protect
the coinage of the United States. This interim rule is effective until
April 14, 2007. The public is invited to comment until January 14,
2007. Thereafter, but prior to April 14, 2007, the Department of the
Treasury will reevaluate the need for the rule in light of the public
comments, and other relevant factors. Upon consideration of the public
comments and other relevant factors, the Department of the Treasury may
issue a final rule extending or modifying the provisions of this interim
rule, or may allow the interim rule to expire without extension.
DATES: Effective Date: This interim rule is effective December 15,
2006.
Expiration Date: Unless extended by a further rulemaking document
published in the Federal Register, this interim rule expires April 14,
2007.

"We are taking this action because the Nation needs its coinage for commerce," said Director Ed Moy. "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 taxpayers."
http://www.usmint.gov/pressroom/index.cfm?flash=yes&action=press_release&id=724

Nickel prices touched an all time high of 38,950 usd a tonne last Friday.
Metals - Nickel recovers as traders again focus on critically low stocks
Friday, February 2, 2007 2:58:36 PM
http://www.afxpress.com

Copper futures for March delivery fell 11.3 cents, or 4.5 percent, to $2.4175 a pound at 12:15 p.m. on the Comex division of the New York Mercantile Exchange. A close at that price would be the biggest one-day percentage drop since Jan. 3. Earlier, copper touched $2.385, the lowest since March 23.
http://www.bloomberg.com/apps/news?pid=20601012&sid=a.Xy_t43.TN8&refer=commodities

A U.S. 5-cent nickel coin weighs 5 grams and is 25% nickel 75"% copper.
It takes 151 pre-1982 Lincoln cents to make a pound.

Post 2

Sunday, February 4, 2007 - 5:26pm

That's pretty hilarious. I guess we won't be seeing many of the older coins in a few years or so. What percentage of the current 1 cent and 5 cent pieces are from the pre 1982 era?

Post 3

Sunday, February 4, 2007 - 5:49pm

Ummm... nickels are nickels (except the War Nicks, which are 1/3 silver...) ...
[From mid 1942 to 1945, so-called "Wartime" composition nickels were created. These coins are 56% copper, 35% silver and 9% manganese. --wikipedia. .35 * 5.00 = 1.75 grams silver; 1.75/31.1 = .05627 ounces silver; .05627 * $13.38 per ounce = 75 cents each for 1942-1945 US 5-cent coins.]

However, sorting out Canadian nickels is an option. Here is a machine (don't you love the market for capital goods?):

The first product is a machine capable of sorting over 300 coins per minute. It is a single denomination coin sorter/counter called the Coin Artist. Single denomination means it will only sort one kind of coin at a time. At this point you ask what is there to sort if they are the same denomination coin? Over the years as metal prices fluctuate, the mints of the world have changed the composition of their coins but they often leave the size and color of the coin the same so they can easily circulate together without causing confusion to users.

The best current example of this is the US 1 cent Lincoln coin, or penny. Some time in 1982 the US Mint changed the composition of the coin from 95%copper and 5% zinc weighing 3.11 grams, to a zinc planchette coated with copper. This new composition is pure copper plating over zinc. Zinc content is about 99.2%   and copper plating makes up the rest at about 0.8% this coin weighs 2.5 grams. The Coin Artist will be configured to sort these two types of pennies that circulate together side by side From my samplings of over 150,000 coins, I have found that the percentage of copper content coins in my area runs about 29.5%. This may vary within any geographic area, and will continue downward as they are removed.

Also available, is the Coin Artist for nickels.   The US nickel is really not in play, but the Canadian nickels have been changed numerous times and there are almost pure NI content nickels circulating side by side. With the nickel price so high, it makes sense to remove these from circulation and store them for a long term numismatic play. For Canadian customers it will make sense to get set up for the nickels as well as the copper pennies. This will be accomplished by purchasing either a separate sorting unit just for nickels, or a retrofit kit to switch over to them intermittently. As things develop on my end I will add more content explaining other uses of the Coin Artist
http://www.ryedalecoin.com/Products.html

It costs $600...

Short of that, there is the labor-intensive alternative of sorting them by hand... or hiring CHILDREN to do that for you! Yes!! Child labor for pennies!!! Ahh, capitalism!

(Edited by Michael E. Marotta on 2/04, 7:52pm)

Post 4

Monday, February 5, 2007 - 7:56am

My credit union has a machine that will count your change for you. It's self-service. It gives you a slip which you take to a teller in exchange for more money.

Do you think banks will be imposing service charges for this as well? I can imagine this:

PERSON: I have 500 pennies. I would like a $5 bill instead.
TELLER: That's perfect. It will cover the five-dollar service charge.

Post 5

Monday, February 5, 2007 - 1:10pm

CoinStar has counting machines in supermarkets. I believe they take a 10% fee for counting. CoinStar is one of the lobbyists fighting for the continuation of the cent.

My credit union also has a counting machine for change, and, like yours, there is no charge. You take the slip to the cashier. I always deposit mine to savings. When it comes to money I am a Scrooge. I don't have much -- there is that interesection between Zen Buddhism and Howard Roark in blue jeans and sandals; as an Objectivist don't "care" about money because I am always confident that I can earn it -- but what I have, I take darned good care of because I honor and respect its source!

New thread: Credit Unions versus Banks.

Post 6

Wednesday, January 2, 2008 - 7:10pm

The Copper Development Association offers charts, graphs, and other data.

At about $3.00 a pound right now ($3.02,$3.04)[1], there is just less than 2cents in every pre-1982 US bronze cent. In 1982, the composition changed to its current debased alloy. Before that, the cent was 95% copper and 5% tin and zinc, an alloy called "French bronze."

There are machines that will sort cents by weight, old from new. Otherwise, you have to do this by hand. Also, as noted above, actually melting the coins or selling them for export are both illegal acts. However, if, like me, you have a jar of cents, a cold, dark winter night is a fine time for spending time with these little tributes to Francisco d'Anconia. Who knows, you might find a doubled die or other error, making that cent a 25-cent or one dollar item.

[1] Copper must be 99% pure for the commodities market. Some refiners make money taking 90% pure anodes from the mines and extracting the silver and gold to sell the 99% pure anodes. Recycled copper sells for less.. Grades of #2 and #1 depend as much on the guage of the wire.

Post 7

Sunday, April 26, 2009 - 9:00am

As of today, copper Lincoln cents 1909-1982 are at 1.35 cents each.
A great site for this is www.Coinflation.com which gives the melt value of current coins.
(At 3.5 cents for a dollar coin, how low do you think the dollar can go... ultimately ...?)

Kitco -- see www.kitco.com for precious metals -- has a Base Metals page set
at www.kitcometals.com
Copper is at $2.04 per lb as of this post.

Click the Education tab on the Copper Development Organization homepage (cited earlier above) for more information.

Copper, of course, meets the primary demands of our electrical civilization because you can't lift an elevator with a beam of light (yet).

We usually hedge against inflation with gold and silver, of course, and it would take an inconvenient amount of scrap copper to save $100. However, in the mid-19th century, the UK struck one-third and one-half farthings for Ceylon and Malta. (See the informative pages of retired physicist Tony Clayton here. Back up and browse the site. He's outstanding.) Ultimately deemed too small for convenience, the experiment hints at the extreme abundance of unregulated capitalism that coins as small as an eighth and twelfth of a penny might have been considered necessary. In the 1790s, British merchants bought specialty tokens from the privately owned Birmingham Mint whose steam presses revolutionized coinage. Those penny and half-penny tokens were necessary because food and lodging had fallen in price below the cost of a silver penny (1 pennyweight = 1.55 grams or 24th of a troy ounce).

So, in the event that you might be spending gold and silver coins on the street, you might want copper coins as well. You don't need them right away. About 10 or 15 years ago, I got a deal on a bag of UK Pennies and Half Pennies, got a couple hundred for a few cents each.

(Copper is element 29 with Atomic Weight 63.546, a tag that will help me find this thread again.)

(Edited by Michael E. Marotta on 4/26, 9:14am)

Post 8

Friday, June 11, 2010 - 5:02pm

Worldwide recession continues ...

06/11/2010
COPPER FUTURE (USd/lb.) $2.90400
Change +4.150
%change 1.45
http://www.bloomberg.com/markets/commodities/cfutures.html

FINANCIAL TIMES (UK)
Investor caution urged as metals slide
By Matthew Vincent
Published: June 11 2010 19:00 | Last updated: June 11 2010 19:00
Private investors are being advised to avoid funds exposed to industrial metals in the short term, as the prices of copper, nickel and zinc become increasingly volatile.
This week, copper hit an 8-month low of $6,124.75 a tonne on London Metal Exchange � a fall of 24 per cent from its 12-month high on April 5. But Zinc has fallen even further, down 38 per cent over the same two-month period, while nickel is down 34 per cent. Prices for all three metals had recovered strongly from their collapse in 2008, when copper fell from an all-time high of $8,730 a tonne to a low of $2,845 inside six months. At the high, some UK copper coins became worth more than their face value: pre-1992 two pence pieces, which were 97 per cent copper, had a �scrap� value of 3p.
�It is likely to have been exacerbated by the Chinese government�s attempts to slow the property/construction market,� says Mick Gilligain of broker Killik & Co. �China is the world�s biggest consumer of copper.� However, John Kelly of Chelsea Financial Services sees greater uncertainties closer to home. �Currently, Europe consumes 20 per cent of global copper output and 15 per cent to 25 per cent of aluminum, zinc, nickel and lead production. Until fears can be assuaged regarding those nations in critical conditions, all of these base metals are going to struggle.�
http://www.ft.com/cms/s/2/2f96d2d8-7583-11df-86c4-00144feabdc0.html

Post 9

Sunday, April 28, 2013 - 9:38am

Delivered at just over $7000 per metric tonne, Spot copper is about $3.17 per pound.

Last night, I watched Hunting the Elements, a PBS Nova presentation from 2009. It was so-so; I am not a big fan of hams and David Pogue does more acting than presenting. Be that as it may, though, discussing copper, he went to the Copper Pit at Comex New York, where he was told that they call it "Dr. Copper because copper has a Ph.D. in economics." They regard it as the most reliable indicator of where the general economy is heading.

From Kitco here:
Market Nuggets: Deutsche Bank: Copper Underperforming Other Base Metals
Friday April 26, 2013 9:57 AM
Copper has underperformed many of the other base metals over the last month and this trend may well continue, says Deutsche Bank. The copper/aluminum ratio � which reflects how many metric tons of aluminum it takes to buy a ton of copper � has fallen to 4.00 from 3.65. "We believe that this de-rating trend on the part of copper is one which is likely to remain a consistent theme over the next year," Deutsche Bank says. "Over this time frame, we expect that copper availability is quite likely to increase meaningfully." The bank suggests copper may dip as far as $6,500 a metric ton at some point over the next two quarters. There is potential for some short covering in base metals from Chinese merchants and speculators ahead of holidays starting in the middle of next week, plus "exhaustion" of selling by Western funds. "Post this period of short covering, we expect that the market may once again soften, particularly as seasonal strength is expected to dissipate as re-stocking ahead of building/construction season and spring buying by consumers ends," Deutsche Bank says.

Houston Chronicle: Landslide to cut Kennecott copper output by half
By PAUL FOY, Associated Press | April 24, 2013 | Updated: April 24, 2013 3:30pm
SALT LAKE CITY (AP) � A landslide expected to cut production by half inside a major U.S. copper mine this year will set back the Utah economy, an expert said Wednesday.

Post 10

Sunday, April 28, 2013 - 7:32pm

Canada stopped minting pennies this year and for people paying cash their transactions will be rounded up or down to the nearest 5 cent increment.

Post 11

Monday, April 29, 2013 - 8:22am

Like the Banque du Canada, la Monnaie Royale Canadiene is a Crown corporation, and not a "government agency" per se. For almost 20 years now at least, the Royal Canadian Mint has been fully conscious of its business role in a competitive world market. They pioneered "five nines fine" (.99999 fine) gold coins. The Winnepeg branch mint first innovated with steel-core copper-coevered cents. "We have produced more than 52 billion coins for dozens of countries. Our longest continuous contract for producing foreign coins is with Barbados � more than 30 years." They have a storage service for precious metals. They assay and refine for a business.

Historically, Canada has enjoyed a plethora of private copper tokens. The Bank of Upper Canada pennies and half pennies, produced by the Heaton Mint in the UK are consistently over-graded by Americans because of their deep, medallic strikes for the stunning art work. Other tokens from other places said "Speed the Plow / Navigation" ... "More Trade / Fewer Taxes" ... "Copper Preferable to Paper"... And because Americans mostly collect American coins and because Canada has one-tenth the population of the USA, these coins are ridiculously cheap as such things go.

The "stuiver" was a small Dutch silver coin, but in the 18th century settled into copper. The word became a sailor's name for any large copper coin for which he could get a dram of rum almost anywhere in the world. Such coins circulated widely in the American colonies, states, and Republic. In fact, counterfeit George III and similar British coppers circulated as money in the Appalachians into the 1830s. In Canada, they had "blacksmith's tokens." A local shop would use one coin as a die and strike off their own small change for local use. Those, too, circulated farther from home.

Easily the queen of copper coins were the huge dollar-sized issues of Catherine the Great of Russia. (Swedish plate money, huge sheets of copper, were not so useful.)

(Edited by Michael E. Marotta on 4/29, 8:26am)

Post 12

Sunday, May 5, 2013 - 11:44am

Michael:

In all of your research into coins, have you ever run into any analysis of the use of coins as weapons in history?

Two examples come to mind(one from fiction):

1] James Bronson in 'Death Wish' rolling up a sock full of quarters.

2] Coins as cannon shot. Maybe not related-- sounds more like a hiding spot but see this: http://www.tcpalm.com/news/2010/jul/20/treasure-within-treasure-bronze-cannon-found-off/

Bronson came across as pretty lethal with his sock full of quarters. An inexpensive weapon of self defense. (What weapon, in the Bronson hypothetical, could he obtain for the same amount of money that would be as effective as the coinage itself, bound in a sock?)

Mass times velocity. I know I would not want to be smacked up the side of the head with a sock full of quarters. Or pennies for that matter.

Have coins ever been incorporated into armor? (For example, chainmail made from coins bound together. Holes drilled in coins, then wired up.)

When I was a kid, we used to set up coins as targets; when hit, even by a .22, they deform in interesting ways. They were cheap targets. (The biggest denomination I ever used was a nickel; nobody wanted much to shoot at quarters.) Half the fun was trying to find the coin after it had been shot. We'd wedge it into a telephone pole backstop at the range, then try to hit it, then go find them.

Ike's MIC has moved onto a more modern variant of throwing money at defense; I wonder if there are other more literal examples from history?

I wonder if you've ever looked into this aspect of coinage.

regards,
Fred

Post 13

Sunday, May 5, 2013 - 11:58am

I know this sounds silly, but imagine you owned a mortar or cannon of some type.

You charge it with gunpowder.

One choice you have is to load it with twenty dollars worth of pennies. 5 kg of shot. 11 lbm of shot. Two thousand pennies. Pretty lethal short range anti-personnel shot.

What else can you purchase for $20 that would be as lethal?

Maybe $20 worth of nails, nuts and bolts. But at some point, pennies are an economic choice, as well as benign and usable for other purposes. For example, nobody is going to be suspicious of a stockpile of pennies; our closets all have boxes of them waiting for us to finally take them to some coin counter station...

Post 14

Thursday, May 9, 2013 - 12:32pm