Steel replacing nickel in Canadian one- and two-dollar coins

The Globe and Mail reports that Canadian one- and two-dollar coins, known as  "loonies" and "toonies", will this spring be made from steel, replacing the more expensive nickel they are currently made from:

The current loonie is made from bronze-plated nickel, while the toonie has a ring of pure nickel around a copper alloy centre. The new coins will use the same multi-ply plated steel technology used in the penny, nickel, dime and quarter.

The new loonies and toonies are expected to cost between four and six cents each to produce, compared to 30 cents apiece for coins made from nickel. The change is expected to save the Canadian government $16 million annually.

According to the report, the move to steel is also meant to eliminate fluctuations in the price of nickel, which has moved as much as 1,000 percent in recent years. Nickel was one of the metals worst hit by the economic downturn in 2011, with prices tumbling from a 52-week high of $13.20/lb to a low of $5.27/lb. Nickel ended the year trading at $8.42/lb.

Eliminating nickel in loonies and toonies is not expected to have much impact on mining, says the Globe:

The mint produces about 30 million of each coin annually, and the government says the elimination of the nickel element will reduce nickel demand by about 539 tonnes a year – just a tiny fraction of Canada’s domestic output.