In 2012, there were over 6 billion new pennies and 1 billion new nickels minted. However, it cost the government 2.00 cents to make each penny, and 10.09 cents to make each nickel. This means it cost over $155 million ($155,311,640) to mint coins with a face value of a little over $57 million ($57,195,200). A losing proposition, no matter how you look at it. So the Treasury Department asked the U.S. Mint to search for alternative metals and techniques to bring down the cost of minting the penny and nickel.
Last month, the Mint concluded a two-year study into the problem, but found no panacea. Many combinations were tested in a purpose-built lab at the Philadelphia Mint, and subjected to wear and corrosion tests. A major consideration in altering the composition of coins is that vending machines and coin counters at banks would have to be refitted or replaced with completely new mechanisms if the weight and electromagnetic signature changed too much.
Read all the details at Coin Update, who has an excellent article on the subject, with many photos of the test coins before and after being subjected to "stress tests."