An obvious answer to the question, “How much does it cost to make a pound coin?” may seem like it would cost a pound sterling.
But, the real answer is going to fluctuate depending on the cost of the raw metals that go into making the coin as well as some other factors that are difficult to compute in value. We can calculate that roughly 4 pence worth of raw materials goes into each pound coin (old or new), but we cannot estimate the manufacturing costs relating to this.
The Round Pound v. 12-Sided Pound
The Round Pound coin was first introduced on February 9, 1983, to replace the Bank of England one-pound note. The original coin was made out of nickel-brass. The design on the reverse side was changed each year between 1983 and 2008 to display an emblem that represented the United Kingdom as a whole and the four parts of Scotland, Wales, Northern Ireland, and England.
From 2008, the national-based designs continued to be minted, but alongside the new standard version and not in any kind of strict rotation. In 2008, a new reverse was issued designed by Matthew Dent that depicted sections of the Royal Shield to form a whole shield when placed together.
The new £1 Coin changed to a 12-sided coin in 2017, released on March 28. It replaced the former round pound design which lost its legal tender status in October 2017. It was redesigned in an effort to make it more secure and is considered to be the most secure coin in the world.
The 2017 coin featured an Effigy of the ruling British monarch, Queen Elizabeth II Fifth Portrait, on the Obverse with the date and legend ELIZABETH II * D * G * REG * F * D. The reverse side has reflected the Nations of the Crown design of the United Kingdom since its redesign. It features a design by David Pearce of four emblems to represent each of the nations of the United Kingdom, the English rose, the leek for Wales, the Scottish thistle, and the shamrock for Northern Ireland all emerging from a single stem within a crown.
The edge that used to contain incuse lettering was replaced with one that is alternately milled and plain.
- The initial launch of the new design minted 300,000,000 in March 2017.
- 2017 minted 749,616,200 new £1 coins
- 2018 minted 130,560,000
- 2019 minted 138,635,000
- 2020 minted 55,840,169
- Mintage is unknown for the following years
Cost To Product the One Pound Coin
The Royal Mint does not make a habit of publishing the individual cost of each coin they mint. However, if you break down the cost of raw material alone, each £1 coin costs less than 4p. How much the machinery, transportation costs, depreciation of assets, the manufacturing process, or the labor costs is not made known to the public.
We do, however, know the metal that makes up the coin and can research the fluctuating cost of raw materials.
According to the Treasury, the round pound coin that was minted from 1983 until the new 2017 12-sided coin was released consisted of 70% copper, 24.5% zinc, and 5.5% nickel. A single-pound coin weighed 9.5 grams and 22.5mm in diameter and was 3.15mm thick. It was composed of Nickel-Brass and had a milled edge. To figure out the cost to produce the round pound, consider the following assuming:
- Copper is $3.07 a pound, or $6.77 a kg
- Zinc is 0.83/lb., or $1.83/kg
- Nickel $6.04/lb., or $13.32/kg.
With these estimated costs for the metals, the cost of just the raw material would be $0.056239525, or £0.037999679, or about 4 pence before taking into account the costs of manpower, minting machines, and the cost of the manufacturing process.
The new 2017 One Pound 12-sided coin is 23.03 to 23.430mm with a thickness of 2.800mm and a mass of 8.75g. The outer ring is Nickel-brass consisting of 76% Cu, 20% Zn, and 4% Ni. The inner planchet is Nickel-plated alloy.
As of March 1, 2020, the prices of the raw materials were as follows:
- Copper – $5,572 per tonne
- Zinc – $2,018 per tonne
- Nickel – $12,186 per tonne
Keep in mind that base metal cost is always provided in US Dollars, so to get the UK equivalent in terms of pounds, some conversion has to take place. On March 1, 2020, the US dollar was worth £0.78 pound sterling. This price goes up and down but is most recently fairly close to this conversion rate.
When this price is applied to the metal prices, you can determine the £ per kilo price for each metal component. Broken down, it looks like this:
- Copper – £4.35 per kilo
- Zinc – £1.57 per kilo
- Nickel – £9.50 per kilo
From here, you need to break it down to grams for each metal before you can determine the cost per coin. This looks something like this:
6.65 g copper, 2.33 g zinc, and 0.42g nickel which means:
- Copper – £0.03
- Zinc – £0.003
- Nickel – £0.004
The bottom line is that the cost of raw materials amounts to almost 4 pence per £1 coin. This is just for the raw materials though, and doesn’t include manufacturing costs.
Security and Other Cost Factors of the One Pound Coin
Of course, there is more to the cost of developing and issuing a coin than just the minting materials. One consideration is the cost to make the coin secure. Another factor is how it would affect the coin vending machines already in operation.
The coin is also said to now be among the most difficult to counterfeit with features that have to add to the cost of production. It has security features known as iSIS Integrated Secure Identification Systems which is thought to be a code embedded inside the top layer of metal on the Obverse side that can only be seen under a specific wavelength of ultraviolet light. It also has features called a latent image.
It is similar to a hologram with the £ changing to the Number 1 when the coin is looked at from different angles. It also has micro-lettering on the lower inside rim on both sides, ONE POUND on the Obverse, and the production year on the reverse side. All of these security factors add to the production cost, but just how much is not known.
Another factor in changing a coin’s design is how it impacts everyday use including the cost to replace machines that use the previous coin. When the pound coin changed from the round pound that was getting easier and easier to forge to the 12-sided shaped one of different weight, size, and metal makeup, the vending machine industry was majorly impacted.
Many modern machines use electronic sensors to validate the coins inserted into them. These machines would require a software update at the very least. Others would require an entire reworking.
To switch over coin-operated machines with a software update cost an average of about £100 in total with two visits, one to switch on the new pound sensors in the machine and another visit to switch off the old round pound.
To switch over the British parking meters, it was estimated a cost of between £90 and £130 per machine for a simple fix and up to £350 for a more complicated replacement for machines required to give change.
The BPA estimated a cost of as much as £50m to adapt parking meters alone. The Royal Mint estimated between £15 to £20m to update all the coin-operated machines in the country.
Parking meters were not the only machines that needed to be updated. Turning to coin-operated units like gym lockers, some businesses opted to change to entirely new lockers rather than pay as much as £3,000 to make their entire locker room new £1 coin ready.
