Sunday, October 26, 2008

Good use of pennies

Pennies are pretty worthless to most people. I have asked the Internet how much purchasing power a penny had when it was first issued, but nobody has answered me. I suspect it was quite a bit more powerful than it is now, or they wouldn't've issued it.

Thinking about that thief that died a couple weeks ago for trying to pull the aluminum wiring from a live electrical substation, I wondered how much a penny would be worth in terms of raw materials.

First off, pennies created after 1982 are mostly made of zinc (except for a brief accidental minting in 1983 that used copper). Pennies up through 1982 were made of 95% copper and weighed 3.11 grams, according to this article. 95% of 3.11 is 2.9545 grams. The current value of copper is $1.6865 per pound. There are 453.59237 grams in a pound.

So, with copper at anything over $1.54/lb, it is actually profitable to melt down pre-1983 pennies for their copper, assuming a zero-cost copper recovery operation. $1.54 in pennies sells for $1.69 on the copper market.

The really interesting thing is that the price of copper is actually way down from where it was a few weeks ago. The average price per pound in September was $3.1710 per pound! That means you could have made about $16 on the copper from 10 lbs ($15.40 worth) of pre-1983 pennies. You have to wonder why we still find pre-1983 in circulation.

Perhaps my assumption of a zero-cost copper recovery operation is too drastic. According to this document from WCU, the instructions for a classroom lab to recover the original copper from a penny, several chemicals are required, and perhaps their cost outweighs any potential profits. It would take a chemist to know how much the materials cost, and what quantities of those chemicals are needed to process a given amount of pennies.

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