Section 3 - Management & Accountability (continued)
Special Projects
The absence of a reporting mechanism that allowed visibility of the whole of the circulating pool to the commercial banks resulted in the size of the coin pool growing by almost 94 per cent between 2004 and 2006. This growth created an unnatural demand for coins and resulted in increased resource usage, materials handling risks and transport and storage costs. The Mint has worked with the Coin Issues Working Group of the Australian Payments Clearing Association to develop a virtual coin pool system. The head offices of commercial banks now report their coin holdings to the Mint and receive back a summary which allows for better planning of coin supply. This cooperative approach to managing the supply of coins has resulted in a reduction in pool size of almost 47 per cent from the peak in 2006 and made substantial financial and environmental savings in materials and energy from reduced output and transport.
Increased metal prices have created a risk of reduced seigniorage collection from low denomination circulating coins. This risk has been offset by the impact of a stronger Australian dollar on materials purchases and an increased demand of high denomination coins. Three years ago the average face value of coins issued was 30.52 cents per coin. The denomination mix of issued coins in 2007–08 has increased the average face value to 35.67 cents per coin. The Mint is keeping a watching brief on metal prices, the evolution of the coinage mix and their effect on seigniorage.
The Business Continuity Plan (BCP) which was developed last year was subjected to testing this year. The testing simulated a realistic scenario to determine if the BCP was fit to protect the Mint against risks to its business. Results of the testing have been used in a continuous improvement process to further develop the BCP.
The Production Inventory Control Steering Committee (PICSC) model for the accounting and security of high value coins has been incorporated into the MHWP. The two teams have worked together to provide a best fit between the needs for security, accounting and production. The improvements in materials handling have helped to fine tune the inventory control model and have led to the PICSC sign-off of the Materials Handling and Warehousing System Stakeholder Approval of Project Broad Design. One major benefit coming from the MHWP has been the plan to reuse blank delivery drums throughout the coin production and distribution processes. The Mint has negotiated with cash-in-transit businesses to deliver coins in bulk using these drums. This greatly reduces OH&S handling risks in the depots and also reduces the consumption of petroleum-based plastics and timber-based pallets and boxes for combined economic and environmental benefits.
The Chief Operating Officer (COO) progressed a joint exchange program with the Royal Canadian Mint for a final year apprentice, Adrian Boucher. The three month placement was partly supported by the Roger Pysden Memorial Fellowship awarded by the NSW Business Chamber. Both Mints were impressed by the success of the exchange. The Mint will host a staff member from the Royal Canadian Mint early next year. The program aims to exchange knowledge and promote excellence in technical areas of coin production.
The COO chaired the Mint Directors’ Technical Committee meetings. The Technical Meeting of Mints in ASEAN (TEMAN) was held in Malaysia in August 2007. This was followed in May 2008 by the 25th Mint Directors Conference in South Korea. The objective of this committee is to identify key issues relating to coinage materials, machines and processes and prepare strategies to address these issues in a cooperative and collegiate manner. Following a bidding presentation in Korea, the Mint has successfully won the right to host the 26th Mint Directors Conference in 2010. The CEO of the Mint has been elected the Vice President of the Mint Directors’ Conference.
Over the next year we will create a framework, including developing relations with potential suppliers and host country agents, whereby the Mint can quickly and confidently respond to tenders from foreign governments to mint their circulating coins. This framework will also require us to re-examine the Mint’s cost structures and identify priorities for reducing costs.