Britain Royal Mint makes a mint making money

They work behind a steel fence patrolled at night by dogs. They have customers with strange- sounding names -- Tuvalu, Brunei, Lesotho, the Gambia. But they also have an exclusive contract with Her Majesty the Queen.

Last year, they sold $:68 million ($163 million) worth of their goods, showing a tidy 25 percent return on investment.

They are the 1,374 employees of the Royal Mint, and their business is quite literally making money. Not only do they supply Britain with general coinage, proof coins, and medallions: A massive 79 percent of the more than 2 billion coins they stamp out each year are exported to some 100 countries around the world.

The majority of nations lacking local mints, in fact, order their coins from Britain -- proof that even if the sun has set on the British Empire, it continues to gleam off British-made money from Iceland to Fiji.

The mint moved from London -- where coins has been made since the days of King Alfred -- to this quiet Welsh town when British currency was decimalized in the late '60s. The old mint of Tower Hill couldn't keep pace with the demand for replacement coins as well as for the new 50-pence piece. Signs of the change are still evident: A stack of steel drums near the fence contains sixpences, now being withdrawn from circulation and shipped here for recycling.

Like any other profitable business, however, the mint is running into stiff competition. Emerging countries, says spokesman Michael Mansley, like to make their own coins. "It becomes a mark of pride," he says, noting that "as you set up your own airline, you set up your own mint."

Those still in the market tend to shop around. They find formidable challanges to Britain's dominance from West Germany, Eastern European countries, and especially Canada -- though not from the United States, which has its pockets full with domestic business alone.

So, like other businessmen, the Llantrisant moneymakers hone their efficiency. They invest in the latest machinery -- $:11 million ($26 million) worth over the next five years. They employ skilled craftsmen to work the initial designs on six-to ten- inch fine plaster casts and then reduce them to coin-size. They hire consultants to advise them on the otoriously difficult problem of predicting the demand for coind. They build up a market among collectors (the Royal Mint receives some 3,000 orders a day from numismatists). And they buy sharply on the erratic metals market. The cost per coin is a commercial secret. While 50 percent of it could be in the metal, "an awful lot depends on the nature of the design," says Mr. Mansley, with luxuries like scalloped edges upping the price.

Even with their increasing cost-consciousness, however, they sometimes miss opportunities. "We had a very exciting year lat year," recalls Mr. Mansley, who tells of striking the first gold "proof sovereign" since 1937. The mint issued 50,000, selling them at the advertized price of $:75 ($180). But just as they came on the market, gold rocketed. Dealers quoted them at twice that price, and the mint was flooded with orders it couldn't fill. The mint didn't lose, since it had bought the gold at the earlier lower price. But, says Mr. Mansley ruefully, "We could have sold twice the number."

Security is taken seriously among these wooded Welsh hills. "We call it Alcatraz from ur side of the road," says an executive in a neighboring factory. Visitors empty their coins into lockers before entering the compound, and must leave behind the occasional "black" or unstamped coin metal they find lying on the roadways. "Its like working in a candy factory," says Mr. Mansley, who doesn't bother to pick them up. "You get very blase about it."

Do the employees try to cheat the system? "We always have enterprising people who believe in self-help," says Mr. Mansley, recalling the London employee who tried to walk past the guards with his boots full of threepenny bits.

But long-term job security is worth more than a pocketful of whathever the machines are making. Rural Wales is increasingly short of jobs. Even those who disparage advertisement and calling it "the hole with the mind") are glad to be making something that is still in demand.