Hoarding Pennies

By Paul van Eeden
May 8, 2006

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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