Although it takes 1.8 cents of metal to produce a penny, costing taxpayers over $70 million annually, that isn't the real problem with pennies. The function of currency is to facilitate commerce; pennies inhibit commerce. Nothing can be bought with pennies alone, and the time wasted fiddling with them at the register has significant indirect costs on the economy (deadweight loss).
In other countries that discontinued their pennies (Australia, NZ, Finland, Holland, and soon Canada), prices didn't rise and charitable donations didn't fall. Even the US military has stopped using pennies because they are simply not worth the trouble. And in 1857, we discontinued the half cent, even though it had more buying power than the dime does today!
It's common sense - the penny has to go.