How are pennies made and what materials are used?
Today's pennies (since 1982) are made from coin blanks made of 97.5% zinc and 2.5% copper.
While the Mint makes the blanks for all the other coins, the blanks for pennies are purchased from a private supplier.
The blanks are first run through an upsetting mill that goes around the edge of the coin and gives it its raised rims.
Then these blanks are mechanically fed into a coin press and the two coin dies come together to stamp the image on both sides of the coin at once.
The coin is then ejected from the press, travels through some mechanical inspections (like the coin sizer), are fed into the coin counter, and finally put into large canvas bags. They're now ready to be delivered to the Federal Reserve Bank.
The Mint has a nice presentation of how coins are made. Please refer to the related links for more information.
Pennies are made of copper and don't rust unless they are the zinc pennies issued in 1942 and 1943. However, zinc will not rust either. The so-called steel pennies minted during World War II were made of steel and coated with zinc. If the penny becomes damaged or if the zinc coating is compromised, the underlying steel will rust if exposed to the proper elements. Pennies do corrode though.