By Bret Evans
The snow wasn't the only thing melting in Ottawa during the first week of February.
Silver and gold coins were going in the hopper as the
Royal Canadian Mint conducted its first melt of unsold inventory.
According to
RCM spokesman Phil Taylor, the melts will be a monthly feature in the future. The first coins melted originally went on sale in January of 2004. Under the melt plan, after 12 months, the unsold coins are "held for a month" to allow all final orders and returns to be processed, and then melted.
Precious metal coins are melted whenever they are needed by the refinery in Ottawa.
The first melt included both silver and gold coins. Since at this time the
RCM is only striking platinum coins to fill orders, it is unlikely that any will be part of the coin melt program.
Base metal coins, such as Mint sets, are shipped to the
RCM's Winnipeg facility where they are brokered out as scrap.
"Right now, because of the nickel market, we'll probably try to reclaim the nickel out of any with a high nickel content," Taylor said.
Before being sold, the coins are mechanically pinched, a process which bends and distorts the coin, making it unfit for circulation.
It is the same procedure the
RCM uses for scrap coins.
Taylor said an exact description of the coins melted was not available at press time, but that it would be made available at a later date. He hinted that the
RCM would update mintage figures in its annual report to reflect those being melted.
Originally, it had been planned to make the melt more of an event. The coins to be melted had been designated in January. At that time, the
RCM was considering inviting members of the numismatic press to observe the melt. However, when the time came, staff at the refinery decided to simply melt them when the time was right. It became an industrial process rather than a media event.
The melt fulfills a promise made by Mint president David Dingwall at the previous two CNA conventions. In the past, the
RCM has always kept struck coins, eventually selling them to dealers, often outside of Canada, for whatever they could get. The late appearance of discounted coins, not originally demanded by the market, was a contributing factor in keeping the market for modern Mint commemoratives soft.
In 2003, Dingwall told the CNA that dumping would stop. At that time, he implied that melting was preferable, but his first choice would be to simply lower mintages. In 2004, unsold Silver Maple Leaf commemorative sets were dumped into the U.S. market. After Canadian Coin News reported on the dump, the
RCM reaffirmed its commitment to ending the practice.
At the 2004 CNA convention, Dingwall announced that unsold coins would be melted to ensure that they never came back into the market.
"In the past, we would warehouse them," he said. "That practice will stop.
"In the future we will melt all unsold coins."
The move is seen as a further step in the
RCM's commitment to increase its support for the secondary market.
The Mint has also reduced mintages of a number of collector products.
Coin melts are not a new invention. While the
RCM has never released any figures, dealers were told that the
RCM would probably melt products returned under the coin redemption program.
The most famous coin melt took place in 1929. In the previous 15 years, the
RCM had struck more circulating coins than were needed. A large stockpile of 50-cent coins had accumulated.
It was decided that the public would be suspect of Uncirculated coins nearly a decade old, so the surplus was melted. That decision annihilated almost the entire production run of 1921 50-cent coins, giving modern collectors a great rarity.
Another famous melt took place in 1921 when a nickel 5-cent piece was introduced.
The Mint emptied its vault of silver 5 cents and melted them down. While the dates 1919 and 1920 were also affected, most of the 1921 production was destroyed, creating another rarity.
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Posted 05/17/2005 3:50 pm
