The 1982 Lincoln Cent : Copper Content Change

The 1982 Lincoln Cent may look just like its predecessor, the 1981 Lincoln Cent, and it certainly still has the same buying power, albeit somewhat small, at 1/100th of a dollar.  Or does it? Recently, the stockpiling and sale of high content copper pennies, that is, all cents minted before 1982, has reached record highs.  Interest in the coins has peaked as copper prices rise, and even with the federal ban on coin melting for their metal value, older copper pennies have brought premiums almost double their face value.  So what did this new penny change, to make the ones before it so much more valuable?

The single reason interest in pre-1982 pennies is a precious metal.  Not silver or gold, however, but copper.  OK, so copper is far from being a precious metal, but its also far from being cheap.  The rising cost of copper means that pre-1982 pennies hold more value in the copper content they contain, than the face value of the coin.  Hoarders and investors hope that by buying the high copper content coins now,  the value of the copper make a hefty profit when copper prices continue to increase.

What does the U.S. Mint think about this?  Well, definitively, they are not too keen on the idea, as they have pressured congress to pass laws restricting the export of these coins to foreign countries, and have disallowed the melting of coins for their metal content.  This is probably the only reason that pre-1982 pennies are still found in circulation at all. In addition to the regulations about one cent coins, the nickel has also been targeted because of its relatively high melt value, as it is now worth more than face value do to the high copper content as well.

In 1982, the U.S. Mint realized that the copper penny was becoming too expensive to produce, so they began looking for an alternative to reduce the metal costs of the coin.  The solution came by the way of plating the coin with copper (because mint officials knew that the penny should remain their traditional bronze color) over a base coin containing zinc.  So little copper is used in the manufacture of these new coins, only 2.5 percent copper vs. 97.5 percent zinc, that it would be impossible to gain any additional value in copper from these coins.  Because this switch happened in September of 1982, it is quite possible to find 1982 high copper content pennies, but they are are harder to sort out without a precise digital scale, as the only discernible difference is the new pennies slightly lighter weight.

Investors are always looking for the next edge over the market, and some people will hedge their bets on copper pennies because despite the ban, the coins provide a verifiability known amount of copper, easily measured, and this represents a sound investment to people who believe the price of copper will continue to rise.  So, in the near future, it may be wise to find good examples of coins before 1982, as a mass melting of these coins will certainly make those gaps in coin albums harder to fill.

Wednesday, October 3rd, 2012 Blog

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