"Who else but the government would shell out almost two cents for a penny?" asks the NymexDirect Market Snapshot newsletter. In fiscal 2007, it cost the U.S. Mint 1.7¢ to make and distribute a one-cent coin, according to an annual audit that cited rising nonferrous metal prices, while the nickel cost 9.5¢. So, to grapple with high costs for metals, Washington is looking at ways to cut spending on money.

Edmund Moy, director of the Mint, says changing the composition of pennies and nickels could save up to $100 million annually. Pennies are made of copper and zinc, while nickels are made of nickel and copper. Since early 2003, high demand worldwide has driven up prices, with copper rising 440%, nickel up 310% and zinc up 260%, according to Moy.

Recently introduced legislation in Congress would allow Treasury to sanction the use of cheaper metals for U.S. coins.