The 15th February 2011 will be the fortieth anniversary when our circulating currency changed over to the decimal system which swept aside centuries of heritage and tradition .
However, not everything has been swept away completely as there is one problem that has returned which causes a great deal of concern to the Royal Mint and it is something that has caused problem for national treasuries for centuries. The problem being , when the metal content in a coin is worth more than the actual face value of the legal tender coin itself.
The coin in question happens to be the one penny and its larger sibling the two penny. Over the past few years the price of copper has risen to such a point that people are doing almost anything to possess it with the intention of selling it for scrap. Copper and Bronze thefts have risen dramatically and nothing is sacred, even some of the cannons at Quex have been stolen.
At the time of writing this post the price of copper is valued at $10,060.00 a tonne so calculating to the exchange rate of £ = $1.6124 a tonne of copper is worth £6,239.14 or £6.23 a kilo or .6 p a gramme. A one penny weighs 3.56 grammes and 97% of that is pure copper making the copper content of a penny 3.45 grammes. Times this by the value per gramme and the copper value in a penny is 2 pence. This may not seem a great deal but a £100 of bronze pennies actually contains £200 in copper in value in the pure pure form. Removing refining costs and middle men, the scrap value must be around £140 to £150 for a £100 worth of bronze pennies weighing 34.5 kilo.
The Royal Mint however have been in this game a long long time and in September 1992 due to the steady increase in copper they changed the metal content in a penny and two penny to steel with a copper coating. The advantage with steel is that it is cheap and and being magnetic it is easy to separate the ferrous steel from the non ferrous copper should the value of the copper content exceed the face value of the coin. Between the dates 1971 to Sept 1992 the Royal Mint produced something in the region of 7.9 billion decimal pennies for circulation which in these times of austerity could reap a fair dividend if they were removed gradually from circulation and off set with the production of new steel copper coated coins. Considering I haven't given figures for the two pence this does represent a lot of copper and a huge return if carried out on a industrial scale.
Since 2007 I have been checking the amount of bronze coins in circulation and the percentage of bronze coins in change samples is now dropping which could suggest coins are now being removed from circulation.
Statistically it does appear that it could be prudent to hoard bronze coins just to see what happens and considering that the price of copper is rising above inflation and earns more than interest there is no fear of loss from hoarding substanstial amounts. Melting down legal tender coins is illegal but trading coins for their metal content is not and I am sure somewhere in this country this has been worked out on a grand scale and probably there may be a French Connection or Italian Job going on or the Royal Mint being one step ahead.