The Denver Mint Is Taking Huge Losses on Nickels and Pennies Thanks to Inflation

The cost to produce both pennies and nickels is now more than double what each of those respective coins is actually worth thanks to inflation, which is driving up the price of materials.

A recent United States Mint report outlining the skyrocketing costs says it now takes nearly three pennies to make just one — and more than ten cents to make a nickel.

Denver is home to one of the country’s four coin-producing mints, each of which are financially self-sustaining and therefore receive no federal or state funding, according to the mint’s official website. The facilities primarily make their money by selling the coins they produce at face value to the Federal Reserve, according to the U.S. Treasury.

The Denver Mint produces “approximately thirty million coins per day,” says Jennifer DeBroekert, the chief of public affairs for the mint. Twelve million of those coins are pennies and 3.84 million are nickels.

That means that as of last year, the downtown facility has been losing approximately $206,400 a day on pennies and $207,744 on nickels. Fortunately, the mint produces approximately $750,000 worth of dimes per day — which cost $377,250 to produce — and $1.65 million worth of quarters at a cost of $732,000.

In total, the mint records net gains of around $1.3 million on the dimes and quarters it produces, while losing about $400,000 on pennies and nickels each day the facility is active.

Although the mint is in the black for now, the cost to produce the higher-value coins is also going up, and the profit margins have been shrinking, according to the U.S. Mint report.

A quarter cost about eight and a half cents to produce in 2020, says the Department of the Treasury bureau. It cost just under eleven cents in 2022.

The cost to mint a dime, meanwhile, shot up by nearly one and a half cents during that same timespan. This is on top of the fact that losses on pennies and nickels have also been getting worse each year, with the report saying 2022 marked the seventeenth consecutive financial year in which overall unit costs for the two coins remained above face value.

Between 2020 and 2022, the cost to produce a penny nearly doubled, and the cost to produce a nickel rose by three cents. The culprit for this coinage crisis? The rising price of the metals used to make each of the coins, according to the U.S. Mint, which is being driven up by inflation.

“Since [fiscal year] 2020, costs of supplies and materials for the production of the Nation’s coins have increased significantly,” reads the bureau’s report.

DeBroekert declined to say whether continually rising costs could, at any point in the future, create a risk of closure for the Denver Mint or any of the nation’s other three coin-making facilities. The U.S. Mint is hoping that local lawmakers will come up with some sort of legislation to let different and less expensive materials be used in the creation of our county’s coins.

“Congress must pass a law to either specifically make changes to statutory coin composition or provide authority for the Mint to change to an alternative metal under certain conditions,” the report continues.

Responding to the rising costs, U.S. senators Joni Ernst of Iowa and Maggie Hassan of New Hampshire reintroduced a bill in April 2023 to allow the mint to alter coin metal content.

According to DeBroekert, the Denver Mint currently gets its “ready-to-strike blanks for the Lincoln cent” from Artazn of Greeneville, Tennessee. “Cupro-nickel strip for the nickel, dime, quarter, half dollar and dollar coins are sourced from PMX of Cedar Rapids Iowa, and Wieland Rolled Products of East Alton, Illinois,” she says. Costs to transport materials from these locations are ultimately factored into the overall unit production cost of each coin.

The Denver Mint has been producing coins since 1906, according to information from the U.S. Mint’s website. “Coins manufactured at the Denver Mint are generally distributed to fulfill orders from the Federal Reserve Bank for destinations west of the Mississippi River,” DeBroekert says.

The mint, however, was established more than forty years earlier — by an act of Congress in 1862 — in response to the gold rush reaching Colorado. Its opening came four years after gold was discovered along the Platte River, and it was originally created simply as an assay office, a place where gold miners could melt and cast their raw gold into bars.

Staying true to its roots, the Denver Mint currently stores 17.5% of the nation’s gold reserves.

The mint was originally located at 16th and Market streets, where it operated exclusively as an assay office. In 1895, Congress authorized the Denver Mint to produce gold and silver coins and provided funds for it to move to a new building to do so, according to Colorado Encyclopedia. A year later, the site for the new building was purchased at Colfax and Cherokee Street, but construction was not complete until 1904, and coin production did not start until 1906, because the needed production machinery was on display at the St. Louis Exposition.

The mint is still located at that Colfax location and is the country’s oldest continually operating U.S. Mint facility. However, during the 1960s and ’70s, the building was in need of either renovation or an entirely new location. A long debate ensued over what to do, with one possibility being to close it entirely.

According to a press release from July 16, 1974, former Denver Mint director Mary T. Brooks said the situation had “endangered the mint remaining in Colorado.” Former New Mexico senator Joseph Montoya reportedly told her, “The site question could not be delayed much longer and reminded me that other cities, including Albuquerque, might be interested in having the mint.”

In the 1974 release, Brooks announced that she and other Denver Mint officials had chosen to move the mint location to what is currently the Park Hill Golf Course. Ultimately, however, they opted to renovate the original location.

Meanwhile, Denver still can’t decide what to do with the Park Hill property.

Although the Denver Mint is currently losing money on the nickels it produces, the location has produced versions that are worth far more than five cents.

Buffalo Nickels, produced between 1913 and 1938 at the Denver Mint — depicting a Native American man in a headdress on the front and a buffalo on the back — are a hot commodity for coin collectors.

Some Buffalo Nickels originally minted in Denver are listed on Ebay for over $100,000. According to journoresearch.org, a Denver Buffalo Nickel showing a buffalo with a missing leg because of a printing error sold for $7,400 earlier this year.

While the Denver Mint is currently hemorrhaging money because of inflation, it’s not the first time it has sustained a loss. On December 18, 1922, gangsters stole $200,000 from the location in what was known as the “Great Mint Robbery.”

To learn more about the mint, the Denver location offers tours throughout the day, Monday through Thursday.