Nickels are never made silver. They're made of... surprise surprise!... nickel. But yeah that is just environmental damage caused by the chemicals in the ground causing the nickel to corrode and form this red layer.
The majority metal in a nickel is...surprise surprise!...copper at 75%. War nickels from 1942-1945 were 35% silver...who'd uv thunk
Environmental damage from chemicals in the ground causing the Copper to corrode and form a red layer.