## U.S. Mint Faces Manufacturing Crisis as Coin Production Costs Soar Beyond Face Value

The United States Mint is grappling with an escalating financial problem: the expense of manufacturing coins has skyrocketed to levels where production costs now exceed the monetary worth of the coins themselves. This paradox has prompted federal officials to pursue significant reforms in how coins are produced.

**The Scale of the Problem**

The situation has deteriorated rapidly in recent years. A nickel now costs over 10 cents to produce—specifically 10.4 cents in the most recent reporting year—representing a staggering 40.2% jump from just 7.4 cents in 2020. This means the U.S. Mint loses money on every nickel it manufactures.

While quarters and dimes maintain a positive margin between production cost and face value, their profitability has narrowed considerably. The cost to produce a quarter climbed from 8.6 cents to 11.1 cents between 2020 and 2022—a concerning 28.7% increase. Dimes experienced similar pressure, rising from 3.7 cents to 5 cents to make, marking a 34.9% increase. Understanding how much does it cost to produce a quarter becomes increasingly relevant as these production expenses continue climbing.

**A Metal Composition Solution on the Horizon**

In response to mounting financial pressures, the U.S. Mint has developed a practical solution centered on altering the metal composition used in manufacturing. Currently, these coins feature a nickel-copper coating over a copper core. The Mint's proposal involves adjusting the ratio to 80% copper and 20% nickel, down from the existing 75/25 split—a change that could deliver approximately $12 million in annual savings based on current production volumes.

This modification would require approximately one year to implement following Congressional approval. Testing has already concluded, with officials confirming minimal disruption to circulation. Vending machines would continue functioning normally with coins produced under the new formula.

**Exploring Alternative Materials**

Beyond the nickel-copper adjustment, research efforts are underway to examine other "alternative metal" possibilities for future coin production. One avenue under investigation involves copper-plated steel pennies, though preliminary findings suggest this approach may ultimately prove more expensive than current production methods, which cost 2.7 cents per penny in 2022.

**Legislative Movement Forward**

Congressional action is advancing on this issue. A bipartisan legislative proposal has been reintroduced in the Senate, championed by Senator Margaret Hassan (D-New Hampshire) and Senator Joni Ernst (R-Iowa). This bill would grant the U.S. Mint explicit authority to implement cost-saving changes to coin metal composition.

This represents a second attempt at securing such authority. An earlier version gained overwhelming bipartisan support in the House in December 2020 but subsequently stalled in the Senate. Senator Ernst underscored the absurdity of the current situation, stating that "only Washington could lose money making money," particularly given how much does it cost to produce a quarter and other denominations.

The combination of escalating material costs, congressional support, and tested solutions suggests the U.S. Mint may finally achieve the operational flexibility needed to address this manufacturing economics crisis.