Increase in Metal Values
In the first decade of the 21st century, commodity prices for copper and nickel, which make up the five-cent coin, rose dramatically, pushing the cost of manufacturing a nickel from 3.46 cents in fiscal year 2003 to 11.18 cents in fiscal year 2011. In an attempt to avoid losing large quantities of circulating nickels to melting, the United States Mint introduced new interim rules on December 14, 2006, that criminalized the melting and export of cents (which as of 2011 cost 2.41 cents to produce) and nickels. Violators of these rules can be punished with a fine of up to $10,000, five years imprisonment, or both. The rules were finalized on April 17, 2007. The melt value of a nickel for some time was more than five cents, including nearing double its face value in May 2007. Metal prices have since stabilized, and the melt value fell back below face value in October 2012.
Mint Director Henrietta Fore in 2004 asked Congress to fund research into lower-cost alternatives to present coinage metals. Although the initiative lapsed when she left office in 2005, in 2010, Congress passed the Coin Modernization, Oversight, and Continuity Act, directing the Mint to explore alternatives to the present compositions of the six denominations, from cent to dollar. In 2011, the Mint awarded a contract to study the issue to Concurrent Technologies Corporation of Johnstown, Pennsylvania. Although the contract does not expire until 2013, under the legislation, the Mint is to provide a detailed report to Congress and to the Treasury Secretary by December 14, 2012. The Mint expects demand for nickels in commerce to increase from 840 million needed in Fiscal Year 2011 to 1.08 billion in 2015.
Read more about this topic: Nickel (United States Coin), Jefferson Nickel (1938–present)
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