December 22nd 2024.
Since its establishment in 1965, the Royal Australian Mint has been tirelessly producing billions of coins. This was just a year before Australia made the switch from British pounds and pence to dollars and cents. However, as the use of cash declines and more people opt for cashless transactions, the Mint's primary function of producing coins is now becoming a smaller part of its operations.
The past financial year has been quite tumultuous for the Mint, with a significant drop in the number of coins produced. From 110 million in the previous year, the Mint only managed to produce 47 million coins in the 12 months leading up to June 2024. This was a far cry from the estimated 128 million coins that were predicted to be made. The decline in demand from banks was the main reason for this sharp decrease.
According to Leigh Gordon, the Mint's chief executive, there has been a decrease in the demand for coins. However, he believes that it's not as drastic as the numbers suggest. The Mint estimates that about 100 million coins were used in the previous year, which shows that the decrease is not as significant as it seems. The merger between Armaguard and Prosegur, Australia's two largest cash transport companies, played a significant role in this decline. With fewer depots to store coins, banks were able to use their existing reserves instead of ordering more from the Mint.
For the current financial year, the Mint has set a production target of 62 million coins, and they are already surpassing that number. However, the Mint is now shifting its focus towards its future. As Gordon puts it, the Mint's primary service is to manufacture circulating coins to meet the banks' demands, and that is the main value they provide to the public. They are now considering how to continue this service for as long as it is needed and wanted by the government and the people.
Research conducted by the Mint has shown that the majority of Australians still have a positive attitude towards cash and want it to remain a part of the payment system. Some people are not confident in relying solely on digital systems, and they also consider the risk of outages and the digital system's resilience. The Albanese government's proposed cash mandate, which requires businesses to accept cash as payment for essential items, will secure a future need for coins.
However, with the demand for coins expected to continue declining, the Mint is now focusing on other areas for growth. This includes producing collectible and foreign coins, which have been quite successful for the Mint. They also produce coins for several Pacific nations that do not have their own mints, including Papua New Guinea, Timor Leste, Vanuatu, Samoa, and the Cook Islands. Surprisingly, the number of foreign coins produced by the Mint has been increasing, surpassing the number of Australian coins produced for the first time in the previous financial year.
The Mint has also seen success in producing collectible coins, such as the popular Bluey $1 coins. After a recent gallery upgrade, the Mint welcomed 350,000 visitors through its doors in the last financial year. However, with only 47 million coins entering the cash mix, it may seem like an excessive number, considering the decline in cash usage. So, where do all these coins go?
According to Gordon, the average lifespan of a coin is about 30 years, so they are not wearing out. He believes that many of them end up in jars, consoles, and shelves, and some institutions are looking for ways to get these coins back into circulation. An interesting anecdote from a recycler revealed that every car they crush contains a few dollars, and every railway carriage contains about $60 in cash. And of course, there's always the good old couch, where many lost coins end up.
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