By Na Jeong-ju
Staff Reporter
The Bank of Korea (BOK) is considering either changing the materials of the 100-won and 50-won coins or making them smaller due to soaring international prices of copper and nickel.
The manufacturing costs of 100-won and 50-won coins have surpassed the ``melting point,’’ at which the manufacturing costs and the face value of the coins are the same, according to the central bank.
A 100-won coin, weighing 5.42 grams, is made up of 25 percent nickel and 75 percent copper. A 50-won coin, weighed 4.16 grams, contains 12 percent nickel and 70 percent copper.
Given the current prices of nickel and copper, the bank must spend 104.6 won to manufacture a 100-won coin, and 52.58 won to make a 50-won coin.
``In theory, if a man sells copper and nickel after extracting them from the 100-won and 50-won coins, he can make money,’’ a BOK official said. ``But we think that is not a good idea to make money because he would have to set up facilities to melt coins and refine copper and nickel.’’
However, if prices of copper and nickel continue to rise, the BOK will have to find alternative materials to manufacture the coins, or make them smaller, the official said.
Prices of nickel soared to $52,150 per ton early this month on the London Metal Exchange from $13,372 per ton at the end of 2005. The figure is also about 40 percent higher than $34,025 per ton at the end of last year.
Copper prices came at $7,392 per ton early this month after reaching $9,000 per ton last year. Experts say demand for copper and nickel is expected to rise continuously as China and India need non-iron metals to support their industrial development.
``The soaring manufacturing costs for coins is not just a matter for South Korea, but a global issue,’’ a BOK official said. ``Some South American countries have cut their supplies of coins because of a shortage of money for coin manufacturing.’’
The BOK issued new 10-won coins early this year, which use copper-coated aluminum, which is much cheaper and lighter than an alloy of copper and zinc used for the old ones. The bank said it would save about 4 billion won in manufacturing costs annually by changing the coin constituents.