The end of bronze coinage

Over the last 20-25 years, bronze coins in countries all over the world have gradually suffered the same fate as silver coinage did 50 years ago. While the end of silver coinage was relatively quick in some parts of the world, the replacement of copper coinage is happening at a much slower pace. Nonetheless, it is happening.

One of the first major world economies to replace copper in small denominated coins was the US and it was the one cent coin which lost its copper content- at least the majority of it in 1982. With copper prices a bit higher than historically normal prices at about $4.35 per pound, and taking into account the weight of the US one cent coin, only 136, or $1.36, contain enough copper to equal a pound and thus $4.35. The higher copper price is resulting in a manifestation of Gresham’s Law, which in part states that ‘good money is driven out by bad money’. In other words, people will keep the good money and circulate the bad money. This happened in the mid-sixties in the US, when the 90% silver dimes and quarters were replaced with a cupro-nickel composite.

In 1992, the UK and Ireland replaced their 1p and 2p coins, which were composed of 97% copper, with copper clad steel. The copper content dropped to just under 8%. In 1997, Canada replaced the majority of copper in their pennies with zinc and then steel in 2000. Russia replaced the copper content in their kopeck denominations with steel in 2006. Copper disappeared altogether from Mexican centavo coins in 1986. From then until the New Peso was introduced in 1993, there was no copper in any Mexican coins. Presently, the only copper can be found in the bi-metallic 1, 2, and 5 peso coins- and only in the center. The rings are steel. Most Central and South American countries have coinage that is composed of steel.

Along with the removal of copper and bronze coinage, there is a shift toward steel or clad zinc and nickel from cupro-nickel coins. The amount of copper in some of the higher-denominated coins around the world, especially the Euro coins and US coins, however, is secure since a startling jump in copper prices would need to occur before scrutiny is brought to their composition. It would take almost 100 US quarters, for example, to equal a pound of copper. This would be an intrinsic value of $4.35 vs. a face value of $25.00.

Copper composed circulation coinage has a long history in many parts of the world and holds a small part in the history of a number of countries and even cultures. The removal of copper from the worlds coins only serves to reduce the over all value of the coinage. There is no value in steel. Old silver coins were backed by their very intrinsic value. The same can be said of copper or copper alloy coins as well. The value of a 1979 one cent piece from the US is higher than a present day one cent piece. The copper content may in fact be worth more than $0.01, but at least there is value to the coin.

Present day coinage holds little value. Because of the increased population of the planet, more government are being forced to produce more coins. Higher mintage figures coupled with the reduction of precious metals in the coins of today is reducing the value of the coins to collectors. Worse still, it is greatly reducing the overall value of the currency itself.