Thursday, 19 January 2012

WHAT A STEEL - NEW METAL FOR 5p AND 10p COINS


The Royal Mint is starting production of new steel 5p and 10p coins. Currently 5p and 10p coins are made of 75% copper and 25% nickel (called cupro-nickel).

These new coins will be the same diameter as the old ones (24.5mm and 18mm) but will be 11% thicker to make sure they weigh the same (6.5g and 3.25g) because steel is lighter per unit of volume than cupro-nickel. Keeping the same weight is important for banks which want to be able to weigh bags of 5p and 10p without worrying if they are steel or cupro-nickel.

However, the extra thickness will cause problems for machines which estimate the value of coins by measuring the height of the stack - 100 mixed old and new 5p and 10p will not have a constant height.

The thicker coins will also be rejected by the existing mechanisms in coin-operated machines. The industry has been very busy upgrading but it is not certain that all machines will take the new coins when they start appearing in volume around Easter.

The Association of Vending Agents (which make the machines that sell us snacks and drinks) says its members have been working hard to adapt their 462,000 machine and 'vast majority' will work with new coins. Not much comfort if the machine in your country railway station refuses your 10p and leaves you without a chocolate bar at 11pm!

Payphones - there are about 20,000 that accept coins - and parking machines - 85,000 of those - are also being adapted but some older models may never work. Bus and train fare machines and machines at toilet barriers may also have problems.

The Treasury estimates that changing all coin operated machines will cost the industry £80 million, But the savings in metal costs will be very modest at £7.5 million a year. Each current 10p piece contains about 4.5p worth of copper and nickel. Steel is much cheaper and  new 10p coin will contain about 1/5th of a pennyworth of metal - around 1/20th as expensive.

The new coins are being churned out of the Royal Mint's new nickel-plating machines at Llantrisant. Royal Mint expects to issue the coins in bulk in April when the new year demand for 5p and 10p coins begins. In 2010 the Royal Mint produced 25 million 5p (the lowest ever) and 180 million 10p coins.

Apart from being 11% thicker the new coins will be dated 2012 and, being made of steel, can be picked up by a magnet. The effect can already be seen with 1p and 2p coins - those before 1992 are made mainly of copper but after that steel was used. So you can sort new from old with a magnet.

There are no plans to extend the use of steel to 20p and 50p pieces because of fears that nickel plated steel is easier to forge than cupro-nickel. But the Treasury does not consider that making 5p or 10p coins will be worth a forger's time.

19 January 2012

1 comment:

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