Coin World: "Mint of Finland closing down amid falling demand for coins"
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Wonder how this will bode on the world stage.
Mint of Finland closing down amid falling demand for coins
By Jeff Starck , Coin World
Published: Sep 6, 2024, 5 PM
The Mint of Finland, which has struck circulation coins for other countries, including this 1-quetzal coin for Guatemala, is closing by spring 2025. Images courtesy of the Mint of Finland, via Facebook.
The Mint of Finland announced Aug. 28 that it is closing its operations.
The move will affect coins of Finland and those of several other countries, as the Mint of Finland has been an active export mint even since the announcement.
Once current contracts are completed, the facility will close, a date expected to be in the spring of 2025. The company will not submit any new offers or accept new orders, and all employees will lose their jobs at the close of operations.
“The Board of Directors of Mint of Finland Ltd. has made a decision on the voluntary termination of the company’s business,” the announcement said. “The decision is based on global payment changes and weakened business conditions.”
The Mint of Finland in 2023 secured contracts to produce 400 million 1-quetzal coins for Guatemala from 2023 to 2025, after it began striking coinage for that nation in 2018.
In addition, the Mint of Finland in July 2023 announced a contract to produce 370.5 million peso-denominated coins for Colombia in 2023 and 2024, continuing a relationship that began in 2017.
The Mint of Finland also struck coins for Mozambique from 2021 to 2023, among other clients.
This closure announcement follows the Jan. 8, 2024, announcement that the division focusing on creating coin blanks was being sold so that the mint could focus on coinage production.
Closure of the Mint of Finland shrinks the already dwindling group of mints that fulfill circulation coinage contracts, and follows the Royal Mint’s announcement that it would get out of the foreign coinage contract business at the end of 2024.
Comments
Guess we could say their mint is........Finnish
Might see some nice errors being produced in the next six months.
It won't be long before others will follow to close their doors and go digital.
From Finnish to kaput in other country's
Good one NewEnglandNotes & johnny9434!
This is extreme punishment
"Inspiration exists, but it has to find you working" Pablo Picasso
But our US cent production will go on and be the last to meet it's demise.😀
The Finns are shutting down their mint due to decreased demand, not because they are willing to strike coins to meet demand.
I assume that Finland will outsource any necessary coin production to other mints. A number of European countries do that.
Pobjoy shutdown recently (UK). There just is far less demand and fewer people are needed to meet it.
ANA 50 year/Life Member (now "Emeritus")
If they stop minting new coins, the old ones will be worth more.
My US Mint Commemorative Medal Set
Great. There's hope for all those future parking lot finds.😀
Would the demise of physical coins bode terrible or well for the value of current collections?
Casual collector, mostly Morgans & Peace Dollars.
Finland uses the euro so coins from other countries can sneak in.
I'm actually a little surprised the Finns are doing this. Each country in the euro zone is allowed to mint a certain amount of coins relative to their population. The issuing country keeps the seignorage.
Finland either never issued the 1 and 2 cent coins for circulation or they discontinued them early on. So, their smallest coin is the 5 euro cent, which must cost less than that to mint.
All the need to do is strike fractional euro cents. Maybe one cent, half cent, and quarter cent. Or bring back pennia and mint those.
They opened up in 1860. They've struck some highly desirable and very rare coins since then.
I don’t think the impact would be felt for a long time, but one has to assume that without coins being part of “everyday” life, fewer people will get into collecting.
Um...no
The elimination of the Italian Lira, for example, had no effect on the value of Italian coins.
Are you saying if the US Mint stops minting all Lincoln cents, that most people who have them will not value them more? Usually supply and demand matter, but I guess not for lira.
My US Mint Commemorative Medal Set
From the Finnish Mint's most recent annual report of 2022 (term turnover is translation of revenue):
"Over the years Mint of Finland has served customers in more than 40 countries all over the world. In
the year 2022 96% of the company turnover came from export."
Finnish Mint's primary line was the supply of blanks to others:
Market and business outlook for 2023
Competition in the industry is tough and margins are very low. The arrival of new actors on the international market, especially in the coin blank business,further increases competition. The coin blank business is characterized by
excess capacity
If the reduction in the use of stamps has any parallel….. not exactly.
Having fun while switching things up and focusing on a next level PCGS slabbed 1950+ type set, while still looking for great examples for the 7070.
Seems like an opportunity for the US mint to make up for all the money they lose coining cents.
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Never a slave to one plastic brand will I ever be.
Supply and demand does matter - and that's why values will decline, because demand will fall. And hypothetically if Lincoln cents (or US coinage more generally) stop being made, then demand for them will most likely fall as fewer new collectors will want them, since they won't be part of their daily experience any more. Just look at Canada, where their penny was ceased in 2012. In the 12 years since, prices for Canadian pennies have largely gone backwards. This would be especially true if the ability to redeem the obsolete coins, in bulk, was limited or controlled, as it would mean there would be vast stockpiles of the coins out there which nobody wanted and nobody could get rid of profitably.
Back to the situation in Finland, the discussion of obsolescence is largelt moot, as this announcement isn't "Finland will stop issuing new coins". It's "Finland will stop making their own new coins" - and presumably the Finnish government will contract out new coinage production to a mint in a neighbouring country, whoever is the lowest bidder. The whole reason the Finland Mint starting acquiring foreign coin contracts (like Guatemala) is because the Finnish economy is too small to support a national mint all by itself, especially with the increasing tendency in Scandinavia towards cashlessness.
The Finland Mint is not a government-owned entity; it was privatized in 1993 so unlike the situation in the US, the Finnish government cannot force the mint to continue producing loss-making coinage. The Mint can simply tell the Finnish government "No, we're not making those coins for you, go find someone else to make them". This is presumably also why Finland was the first Eurozone country to ditch the 1 and 2 eurocent coins, not long after the euro was introduced.
I'm also wondering about the knock-on effects, as the Finland Mint also owns the Swedish Mint and is half-owner of the Norwegian Mint. The Finland Mint currently makes all circulation coins for Sweden, so Sweden too will soon be looking for a new source of coinage.
Roman emperor Marcus Aurelius, "Meditations"
Apparently I have been awarded one DPOTD.
Very informative post @Sapyx
The supply doesn't change. You well have exactly as many 1945 cents as you have now. What you don't have is any new issues.
From the Finnish Mint's 2020 Annual Report:
"Most of the company's business is of a project nature based on non-recurring or multiannual
agreements. Mint of Finland Group comprises Mint of Finland Ltd, Mint of Finland GmbH and
the Spanish blank manufacturer Compañia Europea de Cospeles S.A. (CECO SA), in which Mint
of Finland and Fábrica Nacional de Moneda y Timbre-Real Casa de la Monedan (Royal Mint of
Spain) each has a 50% holding.
Significant overcapacity in the industry has resulted in tougher competition on the international
markets and is in turn reflected in fierce price competition. Whereas most European countries are
closed to competition, there is a demand for blank and circulation coin suppliers in developing
countries.
Various new means of payment continue to be rolled out and this has led to a growing need to
examine the future of cash as a means of payment. Cash has so far retained its position in minor
transactions, which continue to account for a significant share of transactions worldwide, even
through in the Nordic countries digital payments are accounting for a growing share
of minor transactions."
The Mint's revenue dropped from 76,80ME in 2021, to 20,915ME in 2022 (-72.7 %).
Unless capacity was overbuilt recently, does seem to imply an international reduction in demand for coinage, particularly in developed countries.
Honestly the future for mints lie in bullion and not circulating coins. Other countries like Turkey actually lose money producing circulating coins (even with a composition change a one lira coin worth 3 cents costs approximately 3.67 liras or 11 cents to produce) due to inflation. Even when they introduced a higher denomination circulating coin this year, many people increasingly switched to bank cards as they are more convenient than coins or paper currency and paper currency is more convenient than coins in many cases (Turkey’s lowest denomination note, the 5 lira note is worth 15 cents and the highest denomination note, the 200 lira is worth $6).
However one thing Turkey does excel in is producing gold coins, their .9167 fine republic gold coins are so successful thanks to a culture of giving the newest gold coins as gifts for weddings or births etc, that Turkish gold production actually outpaces that of the US Mint. Not only that, they have a policy where authorized dealers can deposit gold in an account with the Turkish mint and request it to be minted into coins much like the early US Mint. Imagine if the US had a culture of giving gold as gifts like other countries do? After all diamonds became relevant due to marketing.
“Workers at the Philadelphia Mint have gone on strike. They want to make less money.”
— Lincoln Vanderblatt, 1928