by Mark Shaw, The Innovative Coin Company
courtesy Currency News
April 9, 2013 – The highest denomination coins in many countries are bi-metallic, or – more accurately – a single coin made from two dissimilar metals that as a rule are different colours. Bi-metallic coins have been found to be an effective deterrent to counterfeiting activity and the levels of seigniorage are advantageous when compared to low denomination banknotes. Bi-metallic coins are seen as attractive, more valuable than ‘ordinary’ coins, long-lasting and offering increased purchasing power. But, in spite of this, their adoption has been slow – predominantly because of the costs associated with them.
Most of the bi-metallic the offerings are made from solid alloys of CuNi (cupronickel) or AlBr (aluminium bronze), with the inner being a purposemade part with an interlocking rim profile at the outer. The outer (or ring) again is a purpose-built part with a complementary interlocking rim profile.
The fact that these are the preferred options for the highest denomination coin does not, however, mean that they are insulated from cost reduction pressures. And due to the high levels of scrap and low yields, along with the high and unpredictable raw material costs (solid alloys are inherently more expensive than the plated versions), the costs are high and are likely to remain so, restricting the more widespread adoption of bimetallic coins as banknote replacements.
The current production process for a bi-metallic coin involves approximately 12 individual steps, including blanking, rimming, annealing, polishing, and quality inspections for each component, as well as a considerable amount of scrap material being generated that reduces the production efficiencies and lengthens the manufacturing process.
However, there is an alternative whereby a single part or coin blank is used, thus reducing the handling, inspection and therefore the amount of material held in the pipeline. The proposed process for this allows for a single plated coin blank to be selectively plated with a contrasting colour at the edge to give the appearance of being bimetallic.
Being a one-piece construction, this alternative has as few as five processing steps, making it much more cost-effective than conventional bimetallic coins. Selective plating is already used in the minting industry, but generally only for precious metals such as gold and silver since the masking process is slow and time consuming, and therefore does not lend itself to high volume applications.
By contrast, this process developed for bi-metallic coins has been designed with high volume, fast plating times and the right chemistries in mind to ensure it will meet all of the requirements of the circulation coin industry.
Long Term Benefits
The equipment and process use a proprietary masking, gripping and plating module that ensures high quality and consistent results with a variety of chemistries and coin types. It cuts out approximately 50% of the process steps but results in a similar looking, feeling and performing coin, with potential long-term benefits being developed. According to industry sources, the costs for bi-metallic coins compared to mono-metallic coins of different types can be seen in the chart above. The estimated cost factors for the new process are only 1.3 times the current mono-metallic costs, factoring in the additional plating step only. By contrast, the accumulated cost factor data for the various bi-metallic options are considerably higher due to the higher scrap and lower yields, and the assembly process which is renowned for reducing the efficiency and throughput.
Factoring in Savings
The other factor to consider are the cost savings when switching to plated coins because of the lower raw material costs, which can be as much as 40% lower than the solid alloy equivalent.
Therefore, if a modified monometallic process and equipment such as that described here is deployed, the costs ought to be considerably less due to the fact that there are no piercing, special rimming, or assembly issues to deal with.
Further benefits, meanwhile, include enhanced security as there is no chance of separation of the components, and greater durability, since the thicker plating is at the point of greatest wear activity (ie. the edge).
A prototype for selective plating is currently being built to show proof of concept and, as the system is already being used (in other industries), few issues with scaling up are foreseen. The next step will be will to secure an interested customer for the process, and then full commercialisation.
This article has been taken from the March issue of ‘Currency news’.