As an expert in the field of coin production and economics, I can provide you with a detailed analysis of the cost to produce a nickel. The cost of producing a coin is influenced by several factors including the cost of the metal used, the cost of labor, the cost of machinery, and the cost of distribution.

Metal Cost: The primary material used in the production of a nickel is nickel itself, which is a base metal with a fluctuating market price. The metal content of a U.S. nickel is approximately 75% copper and 25% nickel. The cost of these metals can vary significantly based on market conditions. For instance, if the price of nickel increases, the cost to produce a nickel also increases.

Labor Cost: The labor cost is another factor that contributes to the production cost of a nickel. This includes the wages of the workers involved in the production process, from the initial stages of metal refining to the final stages of coin minting.

Machinery and Equipment Cost: The machinery used to mint coins is expensive and requires regular maintenance. The cost of this machinery, as well as the cost of electricity and other utilities to operate it, is factored into the overall cost of production.

Distribution Cost: Finally, the cost of distributing the coins to banks and other financial institutions must be considered. This includes transportation costs and the cost of maintaining a secure supply chain.

It's important to note that the cost to produce a nickel is not static and can change over time due to various economic factors. For example, the cost mentioned in the reference material you provided, which states that a nickel costs approximately 11.2 cents to produce, may not be accurate today due to changes in metal prices and other production costs.

Additionally, the U.S. Mint does not make a profit from minting coins; it operates at cost. The value of the coin is determined by its face value, not its production cost. This is why some investors, like Kyle Bass, may choose to horde nickels, as they see potential in the intrinsic value of the metal over the coin's face value.

In conclusion, the cost to produce a nickel is a complex calculation that involves the cost of materials, labor, machinery, and distribution. It is subject to change based on economic conditions and market fluctuations.

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This contributes to volatile and negative margins on both the penny and nickel: recently, the penny has cost approximately 2.4 cents, and the nickel approximately 11.2 cents to produce. By the way: This is why Kyle Bass has horded $1 million worth of nickels.Feb 13, 2012read more >>