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Copper Fever Sparks Meltdown at the Mint
By Richard Adams and Simon Bowers
The Guardian, Manchester, England
Friday, May 12, 2006
The old saying about looking after the pennies and the pounds will
look after themselves took a new twist yesterday as the Royal Mint
sought to put a dampener on "copper fever."
As exclusively revealed by the Guardian yesterday, the soaring price
of copper has made many 1p and 2p coins worth far more than their
face value -- raising the prospect that anyone looking for a quick
buck could be prepared to ship off their spare change.
That became even more likely as the price of copper surged by 10% in
the space of a day, leaping from $8,000 a tonne to a new record of
$8,800 during a frenzy of trading in the City of London and Wall
Street.Concerned about a treasure hunt taking place down the back of
the nation's sofas, the Royal Mint -- which is responsible for the
circulation of Britain's metal currency, while the Bank of England
looks after paper notes -- issued a statement warning that it is an
offence for members of the public to "melt down a coin of the realm."
The additional price rise means that a tonne of copper made up of
pre-1992 1p and 2p pieces, which are composed of 97% copper, would
be worth 2,900. But if smelted into copper the value of the coins
would soar to 4,700 -- a profit of 1,800, and a return on
investment of more than 60%. Those searching through their loose
change should be careful to look for pennies and 2p pieces issued
before September 1992, as since then the denominations have been
stamped from steel with a thin copper plating.
With around 6 billion pre-1992 copper coins thought to be still in
circulation in the UK, that means a veritable goldmine could be in
the nation's pockets, purses, and piggy banks.
The serious side of the price rises is the pressure it places on
manufacturers, after strikes in mines in Mexico and Indonesia cut
the supply of copper at a time of rising worldwide demand.
Meanwhile, soaring prices in other metals has sparked a boom in
scrap dealing. Dentists are among those profiting from soaring gold
prices as they quietly arrange for the smelting down of fillings
extracted from patients' mouths, the Guardian has learned.
In a practice not regulated by the General Dental Council, dentists
are being targeted by gold scrap firms which specialise in melting
down fillings and reclaiming constituent metals.
A spokesman for the British Dental Association said patients had the
right to ask to keep extracted teeth if the fillings had been paid
for privately -- but if they did not ask for their teeth back there
was no requirement on dentists to return them. The BDA was aware
many dentists were using gold scrap dealers.
One such company, Presman Mastermelt, based in the Hatton Garden
jewellery district of London, targets dentists with a pre-paid,
registered postal service. On its website, the company says: "With
the current high prices for precious metals, take advantage of
Presman Registered Post. In just 24 hours you could have sent your
scrap to Presman Bullion Ltd and received your cheque back having
only had to walk to the Post Office."
Presman, which declined to speak to the Guardian, claimed two years
ago that this service had doubled in popularity, and it is believed
to have grown considerably since then.
Record precious metal price rises have put increasing pressure on
the jewellery trade as confused customers are faced with almost
daily jumps in shop window prices.
Andrew Waugh, the owner of the Garden Workshop jewellery shop in
Hatton Garden, has started monitoring the price of gold on his
laptop computer each morning as it ticks upwards.
As for many jewellers across Britain, the soaring price of precious
metals, particularly gold, platinum palladium and rhodium, is
wreaking havoc on his business. Gold yesterday leapt a further $20
to yet another high of $726 a troy ounce.
"Last year I spent many weeks setting up a nice new wedding ring
price list -- gold had been fairly steady for a long while," he
said. "Ever since then, I've had to hide it."
Richard Ball of the wedding ring wholesaler McLure said many
jewellery shops were benefiting from the huge rises in the value of
stock sitting in their shop windows and safes. But he said that
passing on such commodity price rises to customers had proved
tough. "It is no good your stock being worth so much more than when
you bought it if you can't sell the stuff."
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