Final report

Annual and Instantaneous Coin Demand
 
(i.e. Annualized FRB Monthly Orders)
 
Instantaneous Demand
 
Annual Demand
 
Figure 5-3. 
Monthly production targets compared with annual demand. 
The demand for circulating coinage follows a regular annual pattern, with one high-demand 
period at the beginning of summer and a second in the fall of each year.  Neither facility has a 
sufficient storage capacity to permit a more consistent week-by-week production rate throughout 
the year that would allow for building up coin inventories in anticipation of the peak coin 
demand periods. 
Further complicating the management of coin production, orders from the Cash Product Office 
of the Federal Reserve are estimated one month in advance, but the actual quantity of coins 
ordered can still vary by as much as 30%.  The actual number of coins required is not defined by 
the FRB until the finalization of the order as production actually begins.  These shifting, short-
term changes in coin demand impact the required installed machine capacity in addition to 
having an effect on staffing and the supply chain.  The current coin production management 
requires excess production capacity, excess staff and excess raw material inventory so that each 
facility can quickly respond to the rapidly changing demand for circulating coins. 
Greater finished coin storage capacity, controlled by the United States Mint, would be needed to 
level load production from month to month and allow more efficient planning, staffing and 
production capacity.  The associated operating approach would yield a more consistent 
production pace and lower production costs with the coin storage accommodating short-term 
volatility in demand. 
5.3.2.5  Lost Production 
Some United States Mint production is lost as condemned product.  This material includes 
anything that fails to meet in-process quality controls during production.  Quality checks are 
performed after blanking, annealing, cleaning, upsetting and striking operations.  If any errors 
are detected during any of these quality checks, entire batches of production may be condemned, 
and sent to recycling, even though only a small number of actual defects may be present.  The 
304  

costs of examining each potentially affected piece may be too high to justify sorting to pull out 
occasional defects.  In some cases the impact of even one (1) off-quality coin getting into 
circulation creates too great a potentially negative impact to support sorting, which does not have 
a 100% success rate.  Condemned scrap rates vary from year to year for each denomination.  
Based on production figures for the past five years, the mean condemned scrap rates of total 
production (excluding web scrap) vary from 1.3% for the one-cent coin, 8.6% for the 5-cent 
coin, 6.6% for the dime coin, 8.2% for the quarter dollar coin and 10.1% for the dollar coin; this 
condemned scrap was diverted to the recycling stream (see Appendix 5-A for Yearly 
Production/Scrap Rate Tables for each denomination).  Scrap rates for one-cent coins are 
typically lower than for other denominations, largely because fewer operations are performed by 
the United States Mint.  Blanking, cleaning and upsetting are performed at the planchet vendor 
and any scrap associated with these operations is not included in the one-cent total at the United 
States Mint. 
Both the Philadelphia and Denver facilities have started to gather data for a detailed report on 
condemned pieces.  From observations, there are very few rejects from the blanking operation. 
Condemned blanks mostly occur as a result of issues with annealing, burnishing or upsetting. 
Condemned struck pieces result most often from die-related problems such as piece out
140 
and 
die crack defects.  In several instances failures have caused one die to rotate during production 
resulting in misalignment of the images on the obverse and reverse of 5-cent coins; a large 
amount of material is condemned as a result of this situation.  The rotation of dies produces a 
large amount of condemned material because 1) a misaligned coin is considered a major error 
coin, 2) these misaligned coins are co-mingled with otherwise acceptable coins produced on 
neighboring presses and 3) as explained below, sorting equipment is not 100% effective in 
removing these pieces.  Once a defective coin is discovered, multiple bags and process hoppers 
are potentially contaminated.  The detailed analysis of condemned pieces is expected to assist in 
identifying those processes that would benefit from instituting improved process controls. 
One method for improving efficiency is to sift out and condemn defective pieces while 
reclaiming high-quality pieces from production lots known to contain some unacceptable pieces.  
A high-speed, automated inspection process would be needed to do this cost effectively.  At the 
current technical maturity level, commercially available equipment to automatically complete 
such inspections on-line does not appear to be available.  Considerable research may be needed 
to determine whether a cost-effective inspection technique could be developed and implemented 
for culling out defective pieces. 
Another approach to reducing the amount of condemned production would be to loosen the 
quality criteria for acceptable circulating coinage.  Currently any visible defect, such as possible 
staining from improper cleaning or a mark from a small crack in the die or misalignment of the 
obverse and reverse dies, is cause for rejection of all potentially affected batches of coins at any 
point in the production process.  Given the difficulty in detecting such defects, and given the 
difficulty of tracking the exact time that any given piece completed a suspect process, detection 
of a defective piece typically impacts a substantial number of otherwise acceptable coins.  
Allowing small numbers of occasional mistakes to be released would enable a considerable 
140 
A piece out defect occurs when a small piece of the die breaks off (typically do to a local fatigue failure) and 
alters the local shape of the struck image. 
305  

reclamation of mostly good production without impacting the commercial utility of circulating 
coinage while also reducing production costs at the United States Mint. 
5.4 
CONCLUSIONS 
̄ CHAPTER 5 
̄ 
CTC reviewed innovative production methods such as investment casting, MIM, semi-solid 
metalworking and others for possible use in the production of coins.  The production methods 
used by other world mints (such as the RM, RCM, Paris Mint and others) were evaluated to 
determine if alternative methods of producing coins would further reduce the costs to produce 
circulating coins.  No low-cost production methods were found that would allow circulating 
coinage to be produced in the volumes and quality specifications needed by the United States 
Mint.  Therefore, current production techniques used by the United States Mint are quite 
efficient.  The process for producing metal coins is substantially the same as it has been for 
years, but has undergone continuous improvement.  Although some newer processes for 
producing volumes of small parts in other industries have been developed, such as plastic 
injection molding, no best practices and proven methods for forming metal were identified that 
could economically replace the highly evolved conventional processes used to produce high 
volumes of circulating coins.  All other mints around the world use variants of the same process 
as those currently in use at the United States Mint. 
From the standpoint of alternative material candidates, it is clear that a replacement for the 5-cent 
cupronickel alloy would benefit production efficiency.  Reducing the annealing temperature 
needed to soften blanks for striking would both reduce energy usage and prolong the life of 
annealing furnace components.  For all denominations, choosing materials that are readily coined 
at striking loads that are no greater than incumbent coin requirements is expected to maintain or 
improve die life from current levels. 
A better understanding of the role of design and its impact on material flow during striking 
would be valuable in updating rules in the “Engraver’s Handbook.”  This information could then 
be used to create images that improve die life relative to fatigue failure.  The United States Mint 
has programs underway that will build a better understanding of this complex issue; the results 
from the Design for Manufacturability and Design Failure Mode and Effects Analysis studies 
should help develop optimal guidelines and procedures.  Finally, either better inspection 
techniques or a greater tolerance for minor errors could reduce wastage due to condemnation. 
While there may be many small changes that could and will be made to improve efficiency, CTC 
does not foresee any forthcoming means of markedly improving the production process of 
making coins.  The same basic steps of blanking, annealing, upsetting, cleaning, drying and 
striking (along with the burnishing step for the dollar coin) should remain; however, the impact 
of using alternative metals for coinage could have significant effects on production efficiency. 
Should the 5-cent coin material be changed to one that can be annealed at lower temperatures, 
such as the copper-based alloys in the candidate list, there will be an immediate gain in 
production efficiency.  Conversely, should an inherently hard material with high flow stress, 
such as stainless steel, be selected, reduced die life could be expected with an accompanying 
reduction in production efficiency. 
306  

5.5 
REFERENCES 
̄ CHAPTER 5 
1.  
http://www.sohomint.info/mantimeline.html
, “Soho Mint – A World First!,” May 2, 
2012. 
2.  
http://kmoddl.org/machinesandmechanisms/index.php/Diedrich_Uhlhorn
, “Diedrich 
Uhlhorn,” May 2, 2012. 
307  
̄

5.6 
APPENDICES 
̄̄ CHAPTER 5 
5.6.1  Appendix 5-A:  Summar y of Total Condemned Scr ap Rates per  Denomination 
Table 5-A-1.  Total Condemned Scrap Rates per Denomination 
FY 
Denomination 
One-cent 
5-cent 
Dime 
Quarter 
Dollar 
One Dollar 
Total 
2007 
Production/Shipments 
8,080,400,000 1,305,840,000 2,341,500,000 2,798,840,000 894,480,000  15,421,060,000 
Web Scrap 
N/A 
423,857,287 747,948,011 849,261,155 292,715,540 2,313,781,994 
Condemned 
77,588,000 85,630,707 89,587,377 175,696,806 
47,640,473 476,143,363 
Subtotal 
8,157,988,000 1,815,327,994 3,179,035,388 3,823,797,961 1,234,836,014 18,210,985,357 
Subtotal without web scrap 
8,157,988,000 1,391,470,707 2,431,087,377 2,974,536,806 942,120,473  15,897,203,363 
Web (%) 
N/A 
23.3 
23.5 
22.2 
23.7 
23.0 
COND (%) 
1.0 
4.7 
2.8 
4.6 
3.9 
2.6 
Cond/subtotal without web scrap (%) 
1.0 
6.2 
3.7 
5.9 
5.1 
3.0 
2008 
Production/ 
Shipments 
5,162,800,000 630,480,000 
978,500,000  2,546,000,000 460,540,000  9,778,320,000 
Web Scrap 
N/A 
190,360,202 278,980,159 725,820,811 138,600,000 1,333,761,172 
Condemned 
56,034,000 91,655,556 81,931,217 232,855,737 
78,317,913 540,794,423 
Subtotal 
5,218,834,000 912,495,758  1,339,411,376 3,504,676,549 677,457,913  11,652,875,595 
Subtotal without web scrap 
5,218,834,000 722,135,556  1,060,431,217 2,778,855,737 538,857,913  10,319,114,423 
Web (%) 
N/A 
20.9 
20.8 
20.7 
20.5 
20.7 
COND (%) 
1.1 
10.0 
6.1 
6.6 
11.6 
4.6 
Cond/subtotal without web scrap (%) 
1.1 
12.7 
7.7 
8.4 
14.5 
5.2 
2009 
Production/ 
Shipments 
3,103,200,000 246,020,000  444,500,000  1,108,800,000 471,242,000  5,373,762,000 
Web Scrap 
N/A 
75,874,747  134,541,887 316,774,074 134,421,233 661,611,942 
Condemned 
84,674,400 48,096,566 84,935,626 109,166,314 
57,553,798 384,426,704 
Subtotal 
3,187,874,400 369,991,313  663,977,513  1,534,740,388 663,217,031  6,419,800,645 
Subtotal without web scrap 
3,187,874,400 294,116,566  529,435,626  1,217,966,314 528,795,798  5,758,188,704 
Web (%) 
20.5 
20.3 
20.6 
20.3 
20.5 
COND (%) 
2.7 
13.0 
12.8 
7.1 
8.7 
6.0 
Cond/subtotal without web scrap (%) 
2.7 
16.4 
16.0 
9.0 
10.9 
6.7 
308  

Table 5-A-1.  Total Condemned Scrap Rates per Denomination (continued) 
FY 
Denomination 
One-cent 
5-cent 
Dime 
Quarter 
Dollar 
One Dollar 
Total 
2010 
Production/Shipments 
3,512,830,000 330,240,000 855,500,000 342,600,000 416,220,000 5,457,390,000 
Web Scrap 
N/A 
100,187,879 237,753,968 107,639,506 123,542,217  569,123,570 
Condemned 
73,694,400 43,872,929 63,707,672 60,197,531 46,598,132 288,070,664 
Subtotal 
3,586,524,400 474,300,808 1,156,961,640 510,437,037  586,360,349  6,314,584,234 
Subtotal without web scrap 
3,586,524,400 374,112,929 919,207,672 402,797,531 462,818,132 5,745,460,664 
Web (%) 
N/A 
21.1 
20.5 
21.1 
21.1 
20.9 
COND (%) 
2.1 
9.3 
5.5 
11.8 
7.9 
4.6 
Cond/subtotal without web scrap (%) 
2.1 
11.7 
6.9 
14.9 
10.1 
5.0 
2011 
Production/ 
Shipments 
4,628,140,000 953,040,000 1,475,500,000 316,800,000  326,900,000  7,700,380,000 
Web Scrap 
N/A 
266,502,626 
434,126,984 99,095,414 93,579,452 893,304,477 
Condemned 
34,239,200 56,376,768 107,645,944 60,889,771 58,868,555 318,020,237 
Subtotal 
4,662,379,200 1,275,919,394 2,017,272,928  476,785,185  479,348,007  8,911,704,714 
Subtotal without web scrap 
4,662,379,200 1,009,416,768 1,583,145,944  377,689,771  385,768,555  8,018,400,237 
Web (%) 
N/A 
20.9 
21.5 
20.8 
19.5 
21.0 
COND (%) 
0.7 
4.4 
5.3 
12.8 
12.3 
3.6 
Cond/subtotal without web scrap (%) 
0.7 
5.6 
6.8 
16.1 
15.3 
4.0 
Total condemned per year/total condemned 
year + shipments per year (%) 
1.315 
8.589 
6.558 
8.241 
10.110 
4.389 
309  

6.0 
ENVIRONMENTAL ASSESSMENT 
6.1 
INTRODUCTION 
This Environmental Assessment (EA) has been prepared by Concurrent Technologies 
Corporation (CTC) for the United States Mint and the Department of the Treasury in accordance 
with the National Environmental Policy Act (NEPA) of 1969 [1] and regulations implemented 
by the Council on Environmental Quality (CEQ) (40 Code of Federal Regulations [CFR] Parts 
1500–1508), and Treasury Directive 75-02 (Department of the Treasury Environmental Quality 
Program) [2].  The CEQ was established under NEPA to ensure that federal agencies meet their 
obligations under the Act.  Regulations for Implementing Procedural Provisions of the NEPA 
[27] (40 CFR Parts 1500–1508) specify that an EA should briefly provide sufficient evidence 
and analysis for determining whether to prepare an Environmental Impact Statement (EIS) or a 
Finding of No Significant Impact (FONSI); aid in an agency’s compliance with NEPA when no 
EIS is necessary; and facilitate the preparation of an EIS when one is necessary.  Treasury 
Directive 75-02 outlines the policy, standards and procedures for implementing NEPA at the 
Department of the Treasury.  This EA analyzes the potential environmental impacts of 
implementing revisions to the composition of the materials used in circulating coin production in 
the United States.  The coinage materials evaluation is being undertaken in accordance with the 
United States Congressional requirements outlined in the Coin Modernization, Oversight, and 
Continuity Act of 2010 (Public Law 111-302). 
In accordance with 40 CFR §1506.6 – Public Involvement, Federal agencies must “provide 
public notice of . . . the availability of environmental documents so as to inform those persons 
and agencies who may be interested or affected.”  To allow for effective public review and 
comment, this EA must function as a standalone document.  The EA cannot merely reference 
information contained in the other chapters of this report as those chapters will not be made 
available to the public along with the EA.  Thus, the standalone nature of this EA requires that 
much of the information presented in other chapters of this report be repeated below to provide 
the proper background and context. 
Furthermore, after providing the proper background and context, this EA assesses the potential 
impacts from the proposed action by subject area.  The subject areas are those that are noted in 
the Regulations for Implementing Procedural Provisions of the NEPA and commonly assessed 
during the preparation of an EA, such as air quality, health and safety, transportation and 
socioeconomics.  Each subject area is presented as an individual section with distinct subsections 
that address for that subject area the a) background and existing conditions, b) legal, regulatory 
and policy requirements, and c) environmental impacts. 
A brief summary of the environmental impacts associated with the proposed action is provided in 
Table 6-1. 
310  

Table 6-1. 
Summary of Environmental Impacts 
Resource 
Environmental Impacts 
Air Quality 
There are no significant negative environmental impacts to air quality 
anticipated.  None of the potential coin replacement options are expected to 
result in increased overall quantities of air pollutant emissions because none 
of them would require longer annealing times or additional steps in the coin 
production process.  However, a potential reduction in the annealing 
temperature associated with the recommended copper-based alloy options for 
the 5-cent coin could result in increased concentrations of carbon monoxide 
(CO) being emitted from the annealing furnaces.  Offsetting that potentiality, 
a combination of air emissions reduction efforts being undertaken by the 
United States Mint independent of the proposed action and the benefits 
associated with many of the potential coin composition options are 
anticipated to result in decreased air pollutant emissions from the coining 
process. 
Water Use and 
Quality 
There are no significant negative environmental impacts to water resources 
and quality anticipated.  No increase in the amount of water used in the 
coining process is expected from the changes to coin composition under the 
recommended alloys or the other potential options because the water-using 
steps in the process, such as washing and pickling, will not change.  
However, any options that are currently delivered as coiled sheet and would 
be delivered as planchets would transfer the washing and pickling steps to 
the coinage material supplier.  This would have a net-zero overall impact on 
both water usage amounts and wastewater discharges, but would reduce 
water usage amounts and wastewater discharges associated with the coining 
process at the United States Mint. 
Solid Waste, 
Hazardous 
Waste, 
Hazardous 
Materials 
The impacts to solid and hazardous wastes management associated with the 
proposed action are anticipated to be insignificant.  Any differences in the 
quantities of hazardous materials used in the coining process would be 
negligible and would not be dependent on the proposed action because it 
does not involve the introduction of new hazardous materials or hazardous 
waste generating processes.  Rather, the quantities would be driven solely by 
coin demand from the Federal Reserve Banks. 
Health & Safety 
The impacts to worker health and safety as a result of the proposed action, 
while ultimately dependent upon the alloys selected for the various coin 
denominations, are generally expected to be positive.  With nickel exposure 
being the primary worker health and safety concern, all potential options 
contain significantly less or no nickel content than the incumbent 
denominations. 
Transportation 
Any environmental impacts related to transportation anticipated from the 
proposed action are expected to be insignificant due to the negligible, if any, 
change in the weight of the raw materials and scrap metal.  If planchets are 
purchased in place of strip there may be a measureable improvement due to a 
reduction in transportation costs for scrap metal requiring transportation. 
Energy Use 
Any environmental impacts related to energy use anticipated from the 
proposed action are expected to be positive. 
311  

Table 6-1. 
Summary of Environmental Impacts (continued) 
Resource 
Environmental Impacts 
Biological 
Resources 
There are no significant environmental impacts to biological resources 
anticipated.  The proposed action would utilize existing production 
operations within existing United States Mint and supplier facilities.  No new 
activities with the potential to impact plants, animals or their habitats would 
be undertaken in order to carry out the proposed action. 
Cultural 
Resources 
There are no significant environmental impacts to cultural resources 
anticipated.  The proposed action would utilize existing production 
operations within the manufacturing areas of existing United States Mint 
facilities in Philadelphia and Denver. 
Socioeconomics 
From a local standpoint, there will be no socioeconomic impacts, either 
positive or negative, to the immediate geographical area surrounding the 
United States Mint facilities in Philadelphia and Denver.  From a national 
perspective, the socioeconomic impact of the proposed action will be greater, 
and negative financially, for the automated coin-processing business 
community, but the financial impacts are limited to that small subset of the 
population and, with the possible exception of a potential impact to coin 
terminal operators, will be relatively short-term in duration (approximately 
one to five years).  Furthermore, the impacts from the recommended near-
seamless copper-based alloys would be far less, and potentially non-existent, 
when compared to the non-seamless other potential options.  For the United 
States Mint, and indirectly for American taxpayers, the proposed action will 
have a significant, long-term, financially positive impact.