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Trends of Nickel in Coins - Past, Present and Future

By Bill Molloy, Vice President, Europe, Nickel Development Institute.

Presented at the International Nickel Study Group - Environmental and Economics Committee Meeting, held in Stockholm, Sweden, 8th November, 2001.

There is little I can say about the imminent introduction of the new Euro coins into service. However, as a preface to a discussion about the importance of the coinage market to nickel, here is a short overview of the broader geographical picture.

Nickel occurs in coins in many different forms and for a variety of reasons, some quite obvious and others not so obvious. Suffice to say, however, there are few, if any, nickel-free coinage alloys that exhibit quite the same attractive combination of properties as their nickel-containing counterparts.

Following, are some historical facts and some of the reasons why nickel-containing materials are so universally popular in this application. The health question; "Are nickel-containing coins safe?" will be addressed at the end of the presentation.

China's 'White Copper'

Let us take a look back at the history. All of you will, I am sure, know that nickel-containing coins have been around for a long time, but I wonder if many of you know just how long? More than 2,000 years ago, a copper alloy containing around 20% nickel appeared in the form of coins in Bactria, a province of southern Russia which at that time was part of the empire of Alexander the Great (1). Chinese metallurgy at that time was quite advanced and it is likely that the material used by the Bactrians was brought overland from China by merchants. The Chinese referred to the material as "pei-tung" or "white copper" and, as nickel had not been discovered at that time, they had no understanding of why this particular type of copper had a white colour and was relatively hard. It is hardly surprising, therefore, that a Chinese "knife-coin" of almost identical composition was found and dates back to the same period.

When Mongolian tribes invaded Bactria some 100 years later, the overland trade routes to China were closed and these copper-nickel coins disappeared. The world then had to wait nearly two thousand years before nickel again started to appear in coinage, this time in Switzerland. By the mid 19th century, some one hundred years after Cronstedt's discovery, nickel had started to find widespread use as nickel-silver in which copper was alloyed with nickel and zinc to form a soft, white, easily worked alloy. A particular type of nickel silver developed in Germany and known as "Argentan" was adopted in 1850 by Switzerland for its coinage(2). To this basic composition, the Swiss added silver to increase the intrinsic value. A typical Swiss coin at that time had the composition 55% copper, 10% nickel, 25% zinc and 10% silver. Mexico still uses a similar alloy to Argentan, called Alpaca, for the centre portion of its 10 Peso coin.

Advantages of Cupro-Nickel

Although "Argentan" is relatively easy to work and to coin, it becomes considerably harder and less ductile when silver is added. Binary alloys of copper and nickel, on the other hand, were found to offer an excellent compromise between workability and wear-resistance and during the next few decades quickly rose to prominence. The 75-25 Cu-Ni composition was first used by the Belgians(2) who were followed by a host of other countries including the USA and Germany. The USA, in fact, first chose an 88-12 composition for its one-cent and shortly afterwards adopted the 75-25 alloy for its three-cent and five-cent pieces(3). Much more recently, in the mid-1900s, it abandoned silver for its higher denomination coins and changed to cupro-nickel, of which I will say more in a moment. Interestingly, the famous five-cent piece which, to this day, is referred to as a "Nickel" is in fact 75-25 cupro-nickel.

Today, this alloy remains one of the most popular of all, combining, as it does, modest cost with good colour, density and wear-resistance. Its popularity with mints world-wide owes much to the ease with which it can be melted, cast, rolled, blanked and coined, together with its ease of recycling when the currency has to be re-designed. If, as is often the case, a country's currency is to be downsized, no additional material purchase is required, as the old copper-nickel coins are readily recycled, while the surplus alloy has an acceptably high resale value (4).

I do not propose to list all of the countries that use copper nickel coins today but perhaps India deserves a mention. With a population now exceeding one billion, you can imagine that the rate of production needed just to sustain the money supply is considerable. India alone uses 18,000 tonnes of cupro-nickel per annum just for two coins, the five and two Rupees. Another significant user is Australia with as many as four 75-25 cupro-nickel denominations. Japan is another big user, having chosen the alloy for its 100 and 50 Yen pieces (5).

The first pure nickel coin was introduced in 1881 in Switzerland for its higher denominations, such as the 20-centimes piece. Like Switzerland, many countries believed that the intrinsic value of a coin should closely match its face value and quickly recognised the advantages of pure nickel. It was just as easy to coin but possessed superior work-hardening properties to copper-nickel, which gave it improved wear resistance (6). Also, with its relatively high melting point of around 1,400oC, it presented a considerable obstacle to would-be counterfeiters.

Although Switzerland phased out pure nickel in 1939 due to a shortage of the metal at the start of World War II, it has continued to prove popular in many other countries. Since 1881, no fewer than 85 countries have issued 510 types of coin made of pure nickel (2). Worthy of note is Thailand, the first country in SE Asia to introduce nickel into its currency by putting into service a pure nickel coin as long ago as 1914. Another example is South Africa, which, in 1965, stopped using silver for its 5, 10, 20 and 50 cent pieces, all of which changed to pure nickel (7).

I must not forget Canada. In 1968, this major nickel-producing country changed from silver to pure nickel for its 10, 25 and 50 cent coins as well as the one Dollar, although I should mention it has now changed to nickel-plated steel for these coins to counter the effects of inflation. Like the US "Nickel" the Canadian 5-cent coin was made of cupro-nickel until last year when it, too, changed to nickel-plated steel (8).

Future Trends

In trying to anticipate future trends for nickel in coins, perhaps I can touch upon some recent developments which, I believe, give us some useful pointers. Firstly, it is no longer considered necessary for coins to have a high seignorage, that is to have an intrinsic value close to their designated value.You can easily imagine that, in times of high inflation, the value of such coins can overtake their face value making it an attractive proposition to melt them down for profit. This might lead us to expect that a relatively high-cost metal, such as nickel, will feature much less in the future. This is by no means a safe assumption, however, for the following reasons:

  1. There is a trend for coins to replace bank notes of higher denomination for reasons of cost-effectiveness. As we have seen with the Euro, nickel often features in these higher denominations.
  2. Nickel is one of few metals that is ferro-magnetic and this property can be particularly helpful in designing coins for vending machines where counterfeiting has been a problem.
  3. There have been a number of recent innovations that make it possible to reduce the amount of nickel while retaining the many benefits that it confers. They include such processes as roll cladding, the "bi-metal" approach and plating.

Perhaps I can illustrate these points with one or two examples:

Firstly, in the United States, early vending machines were equipped with "eddy-current brakes", which recognised a coin by measuring the ratio between its density and resistivity. In 1965, the administration of the day wanted to switch from the existing silver-bearing alloy to a much cheaper metal but because silver has a much lower resistivity than any of the obvious alternatives, they were faced with the possible need to reprogramme or even replace millions of automatic vending machines. They met this difficulty by adopting for the new coinage, a sandwich material consisting of a core of copper, which has a resistivity almost as low as silver with a layer of cupro-nickel on each side. So today, we still see the familiar three-layer clad construction of America's quarters and dimes, which combine the silvery appearance and durability of cupro-nickel with the low resistivity of the old silver coinage. Furthermore, the three-layer philosophy of the U.S. Mint has recently been endorsed by the choice of materials for the new and prestigious Golden Dollar soon to replace our well-respected friend the "Greenback". A copper core will be clad on both sides with a manganese brass comprising 77Cu, 12Zn, 7Mn, and 4Ni (9).

European Design

In Europe, several countries have adopted a similar approach, but this time using a combination of pure nickel and cupro-nickel which are laminated in specific thickness ratios to produce the desired electro-magnetic signature. Good examples of such "layer-coded" coins are the two- and five-Deutsch Mark coins from Germany, manufactured by the Krupp-VDM "Magnimat" process (10).

Alternatively, if it is not desired to have a ferro-magnetic core, the pure nickel layer can be replaced by another copper-nickel layer of slightly different composition. Krupp VDM refer to this as the "Cunimat" process.

In recent years, some mints have embraced the technique of combining two different-coloured materials in what is commonly referred to as a "bi-metallic" design. The UK's Royal Mint adopted this method for the first time when the new two-pound coin was introduced in 1997 (11). In this case, the inner disc is cupro-nickel and the outer ring is 4% nickel-brass. This two-colour appearance gives the coin added prestige value but, as you can appreciate, it also makes it more difficult for would-be counterfeiters to copy. The Canadian two-dollar piece, the so-called "Tooney" is another excellent example of this approach but, in this case, the outer ring is pure nickel and the inner, nickel brass (8).

The EU, on the other hand, has made good use of the ferro-magnetic property of pure nickel, which exists as a central core in the one and two-Euro coins (12). The dimensions of the core and cladding give each denomination a distinctive magnetic moment, which enables it to be recognised by a magnetic selector incorporated into the vending machine. Imagine also the difficulty of counterfeiting a coin consisting of three inner layers and an outer ring.

Nickel-Plated Coins

Last but not least, I should mention plated coins, which enable the outer layer to cover not only the two faces of a coin but also the rim, a feature not possible with roll-cladding alone. Westaim Corporation of Canada has perfected a process for plated coins, which offers a wide range of combinations. To start with, the well-known Canadian dollar or "Looney" as it is affectionately known, has an attractive plated layer of "Aureate", a copper-tin alloy plated onto a pure nickel core. This same combination is also featured in the Netherlands 5 Guilder piece. For cost optimisation, nickel plating onto mild steel has become very popular as it provides a soft blank that readily work- hardens during minting to give comparable wear resistance to solid nickel (13). Such coins were first introduced in El Salvador in 1977 and, according to Westaim, are now used in 30 countries for more than 100 denominations. Only this year, Westaim has launched a new process for plating nickel or copper onto aluminium blanks. The density reduction allowed 2½ times as many coins per unit weight to be produced compared to, say, solid cupro-nickel.

Nickel Allergic Contact Dermatitis

I promised that, before concluding my presentation, I would offer some thoughts on the question of health and safety considerations. The main issue appears to be related to "nickel itch" or to give it is medical name, nickel allergic contact dermatitis, and whether or not this condition can be brought about by handling nickel-containing coins. It has provoked a fierce debate in Europe both before and after the selection of materials for the Euro.

It is perhaps understandable that Europe should be the focus of this debate because it is only in Europe that legislation has been enacted to prevent the sale of articles that are known to cause nickel contact dermatitis. European Directive 94/27/EC, the so-called "Nickel" Directive, was enacted some 3 years ago and is directed to articles that are "intended to be worn in close and prolonged contact with the skin"(14). One of its main provisions is that such articles may not be sold in Europe if they are found to fail a standard test using synthetic sweat. The threshold criterion is a nickel release-rate of 0.5µg/cm2/week.

Let me say that this Directive is highly desirable and that it will undoubtedly provide a high level of protection to consumers against a medical condition that in its worst manifestation can be extremely unpleasant. Some 12-15% of women and 1-2% of men are believed to be nickel-sensitive (15). There is overwhelming documentary evidence that products such as ear piercing studs, and various items of jewellery that are made from, or plated with, nickel can cause people to be sensitised and can cause a reaction to the wearer if he or she is nickel-sensitive. It is the strongly held view of NiDI that legislation similar to the European Nickel Directive is overdue in other parts of the world and it is our wish to help bring this about.

But what of nickel containing coins? Undoubtedly, nickel and cupro-nickel coins will fail the standard sweat test, but do they present a real risk? The difficulty in fully answering this question is that there is almost a total absence of medical data to indicate there is a problem. But perhaps that, in itself, provides us with the answer? Although I have heard it stated that occupationally exposed people such as cashiers can experience dermatitis from coin handling, documentary evidence is very sparse indeed which suggests that if there is a problem, it is only those people who are highly nickel sensitive and occupationally exposed, who are at risk (15).

Have people taken this potential health risk seriously? Of course they have. It was for precisely this reason that as recently as 1998, the EU commissioned the Danish Environmental Protection Agency to carry out a targeted risk assessment on "Nickel as Used in Eurocoins". A lengthy report was produced which stated as one of its main conclusions: "No evidence exists to suggest that exposure to current coinage has been associated with induction of nickel allergic contact dermatitis in workers handling coins or in the ordinary consumer"(16). Meanwhile, the Royal Australian Mint has conducted its own assessment of the situation and has also concluded that the risk is not significant.

Notwithstanding the Danish report, those charged with developing the Euro coinage faced extraordinary pressures, both political and economic. They had to develop a series of choices and decisions that represented the best compromise obtainable in the very tight time available. Concerns about nickel allergic contact dermatitis were passionately articulated by one member state (Sweden) and these were very influential in the ultimate selection of materials. The compromise agreed by the EU was to limit the use of nickel to only two of the denominations for the Euro, albeit the two of largest face value (12). This, as we now know, will lead to a surplus of scrap cupro-nickel on world markets when existing coins go out of circulation in the Euro Zone countries early next year.

Looking Ahead Globally

So what of the future? Can we expect to see a repetition of what is happening in Europe in other parts of the world? Given the commitment to nickel that we are seeing from most, if not all, of the world's governments and mints, I have to say this is most unlikely. But that statement does presuppose that the concerns about dermatitis can be laid to rest. The EU targeted risk assessment concluded that nickel-containing coins did not pose a significant risk to the general public. It had insufficient information to make a conclusion about the risks to intensive, professional coin users. Since then, the nickel industry has supported some work to study the effects of exposure to coins by professional coin users. Preliminary results of this study were presented to the Mint masters' Conference in Australia last year and indicated that professional exposure did not carry additional risk. We are still awaiting the published final report of this work.

I have seen no accurate estimate of the amount of nickel which goes into coinage but it probably accounts for between a half and one per cent of total world nickel demand. That may seem quite small but we must not forget that this is a highly visible and tangible application of our metal, certainly as far as the general population is concerned. In other words, it very much influences our perception of nickel and its value to society (17). Society's attitude to nickel in coinage will also have implications for the acceptability of other nickel-using products that in normal handling and use will come into short, intermittent content with the skin - products such as handles, bathroom fitments, tools etc. For that reason, the use of nickel in coinage is well worth defending but not only for that reason. It also just happens to be the best material for the job.

More Information on this website:

"Nickel Allergic Contact Dermatitis," Basic Science Paper ENV-1

"Nickel Allergic Contact Dermatitis," NiDI Stewardship Policy

"Appropriate Use," Nickel Magazine editorial, September 2001.

"A Metallurgical Approach to Metal Contact Dermatitis," by G. N. Flint, November 1998. NiDI Reprint Series No. 14047.

References:

  1. Nickel Coinage of the World. The Mond Nickel Company, circa. 1920
  2. Das Fenster. Published by the District Savings Bank (Kreisparkasse), Cologne, November, 2000.
  3. Nickel in Coinage by Prabir De and David Jenkinson, Proceedings of the 10th Technical Meeting of Mints, Brunei, July, 2000
  4. Coinage Materials: A Survey of the State of the Art. Proceedings of the XV11 Mint Directors' Conference, Madrid, 1992.
  5. www.mint.go.jp Web site of the Japan Mint Bureau
  6. The Advantages of Nickel for Coinage by M. Clegg et al. Proceedings of the Third Inter-American Conference on Materials Technology, Rio de Janeiro, August, 1972.
  7. www.samint.co.za Web site of the South African Mint
  8. www.mint.ca Web site of the Royal Canadian mint
  9. www.usmint.gov Web site of the United States Mint
  10. Coinage System Criteria by Vereinigte Deutsche Metallwerke AG. Presentation to the South African Mint, Oct 1987
  11. www.royalmint.com Web site of the British Royal Mint
  12. Denominations and Technical Specifications of Euro Coins Intended for Circulation. Council of Europe Regulation 975/98, May, 1998
  13. Nickel-Bonded Steel Coins by R. F. Pearce. Proceedings of the X11 Mint Directors' Conference, May 1982
  14. EU Council Directive 94/27/EC. 
  15. Coinage and Nickel Status Report SR 0006, published by the Nickel Development Institute, Toronto, Canada
  16. Nickel as Used in Euro Coins. Targeted Risk Assessment by the Danish Environmental Protection Agency. EINECS-No. 231-111-4
  17. Nickel in Society: An Understanding of Sustainable Development. Status Report SR-0007 published by the Nickel Development institute, Toronto Canada, Feb, 2001.
For more information, please contact Bill Molloy in London at 44-207-258-9832.

 

 
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