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How are gold coins made?
Coins are made by mints, and the whole coin manufacturing process is called minting. Gold and silver bullion coins will generally be just a small part of a range of coins that a mint manufactures.
The largest part of the mint's production will be base metal coins for monetary circulation. Though gold was at one time regularly used in circulation coins, this ceased in the 1930s.
Today, precious metal coins - such as the American Eagle, Canadian Maple and South African Krugerrand - are manufactured as bullion products for investment purposes. These coins also tend to carry a legal tender face value, enabling additional tax benefits in their home nation. For example, British gold coins (such as the Sovereign and the Britannia ) are exempt from Capital Gains Tax. Such a benefit isn't available when buying gold bullion bars.
Gold bullion coins and circulated currency are produced under license from central banks and mints, and are typically controlled by governments or their national banks.
The initial stage of production is to refine the metal. Many mints are also refineries, or closely linked to a refinery. The Royal Mint, for instance, controls the Royal Mint Refinery.
Royal Mint Court, London - formerly the home of British coin production. The site now hosts the Chinese Embassy.
Gold coin manufacture can then be divided into three parts: metal refinery, design and prototyping, and minting.
Are gold coins pure gold?
Not all gold coins are pure, 100% gold - what we would define as 24-carat or 999.9 fineness. Gold 1oz Britannias are pure, 24-carat coins, boasting 999.9 fineness. Gold Sovereigns, however, are 22-carat, with only 916.7 fineness. The remaining metal used is traditionally copper.
Pure gold is extremely soft. This makes the Britannia more susceptible to damage than the Sovereign. Therefore, to harden them, many gold coins are alloyed with other additional harder metals.
Modern minting techniques have helped toughen pure gold coins up, which has in turn seen an increase in the variety and availability of such coins.
The refinery must produce gold - or alloy - ingots to the required coin specification. Ingots or bars are next pressed between rollers to form sheets. The sheet metals are then rolled into coils in preparation for minting.
Design, prototyping and die making
The designs of many coins, particularly in the UK, are based on traditional imagery or developed from historic coins. New designs or developments can take years to finalise and approve, and usually a mint will prepare in advance of a significant event; such as the Queen's Diamond Jubilee in 2012 or the 100th anniversary of women's suffrage.
Once drawings of a coin design are approved, a large scale clay model is made. Next, a plaster cast is taken. The plaster cast is then mechanically reduced to make to an actual-size steel 'master'. The steel master is ‘incuse’, that is to say it is impressed upon or engraved. From this, a number of ‘hubs’, or relief punches are made. The punches are then used to make dies. Under great pressure the dies are finally pressed into gold blanks to produced finished coins.
The dies are replaced as they become worn during the production run. Because of this, it is essential to have sufficient identical ‘hubs’ to stamp out replacement dies.
Minting gold coins
Coils from the refineries are rolled again to the correct height for various coins. To allow for pressing, this height will be slightly greater than the height of the coin. Once the metal is at a correct height it is stamped out into blank coin shapes. These blanks are referred to as ‘planchets’, though historically they were called ‘flans’.
The scrap metal from the stampings - known as webbings - are returned to the refinery. It is also common practise for larger mints or refineries to supply other mints with planchets for further processing.
With a hugely powerful press, capable of 60-tonne striking pressure, the planchets are then pressed between two dies and made into finished coins.
Modern presses are capable of striking up to 80 coins per minute. The Royal Mint pressing room can strike 750 coins per minute – this is equal to 12.5 coins per second.
The edge of the coin is termed the third side. This is usually a simple or knurled pattern. It can be produced by running the coin through an edging machine.
Alternatively, it can be produced by a two-part collar. This collar has an engraved pattern and is placed around the planchet before pressing. Under the pressures of the press, the coin spreads out and takes up the pattern of the collar.
After minting, coins are meticulously inspected and rejects (wafflers) are securely returned to refineries. Very occasionally defective coins have passed inspection and gone into circulation, and typically these attract special attention from coin collectors and numismatists, by virtue of being a rarity. An example is a defective 2016 £1 coin, which has the 2016 date on one side and 2017 in micro-inscriptions around the edge. This is now thought to be worth over £3,000!
Any minting must of course be done under high security conditions. Security is particularly high for bullion coins and these, once minted, are securely vaulted for sale or distribution to dealers (such as BullionByPost).