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With the rising price of copper there has
been a buzz lately that the time may be ripe for hoarding
copper pennies. To wit, the price of copper has risen from
$0.60 to $3.50 (almost 500%) in less than five years and
from $1.50 to $3.50 (133%) in barely more than one year.
It is understandable that people are starting to think about
hoarding pennies; but it is also complete folly.
The problem is that there is very little copper
in a US penny. Since 1982 the US penny is made of copper
plated zinc; its composition is 97.5% zinc and 2.5% copper.
A modern penny weighs 2.5 grams, which means it contains
2.4375 grams of zinc and 0.0625 grams of copper. At current
metal prices of $3.50 per pound of copper and $1.55 per
pound of zinc, the US penny contains 0.0482 pennies’
worth of copper and 0.806 pennies’ worth of zinc for
a total contained metal value of $0.008542. As you can see,
the metal value of a penny is still less than a penny. You
didn’t really think the government would mint coins
at a loss, did you?
Now, the situation is very different for pre
1982 pennies. Pennies minted between 1793 and 1837 were
made of pure copper. In 1837 the penny was debased and for
the next twenty years was made of bronze (95% copper and
5% tin and zinc). In 1857 it was debased again to 88% copper
and 12% nickel, giving it a whitish appearance; and then
from 1864 to 1962 it was once again made of 95% copper and
5% tin and zinc. The exception was 1943 when the penny was
made of zinc-coated steel due to the critical use of copper
for the War Effort. In 1962 the small amount of tin was
removed from the penny and its composition -- until 1982
-- was 95% copper and 5% zinc. So if you can lay your hands
on pennies minted between 1864 and 1982, you could make
a penny.
Pennies minted during those years -- with
the exception of the 1943 steel penny -- contained 95% copper
and weighed 3.1 grams. Thus, each of those pennies contained
2.945 grams of copper. At $3.50 per pound, each penny therefore
contained $0.0227 worth of copper; more than twice the face
value of the coin. Assuming you can get a smelter to pay
you 90% of the metal value of the copper in a penny, it
means you can get two pennies worth of copper out of each
pre-1982 penny.
So, if each pre-1982 penny contains two pennies
worth of copper you could make a penny profit for each penny
you smelted. But how practical is that? To make $10,000
in profit you would need to smelt one million pennies, and
one million pennies weigh 3.1 metric tonnes, or 3.4 US tons.
To store and transport that many pennies to a smelter would
most likely cost you more than $10,000; and that is assuming
you could lay your hands on a million pre-1982 pennies.
The average lifespan of a coin is about thirty
years, so by now most of the pre-1982 pennies have long
since been reused by the US Mint to make new copper-plated
zinc pennies. If you can find a pre-1982 penny it would
make a neat conversation piece but I am afraid that as a
money-making scheme, trying to hoard pennies is about as
lame as hoarding paper dollars.
Paul van Eeden
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