The five cent coin costs more to make than it is worth, the head of the nation’s coin factory has confirmed.

Debate over the tiny silver piece was reignited this week by media coverage of its growing obsolescence.

“Currently it costs approximately 7 cents to produce the 5 cent coin,” Royal Australian Mint chief executive Ross MacDiarmid told The New Daily in a statement.

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Mr MacDiarmid denied there were plans to discontinue the coin.

“The Royal Australian Mint examines the production costs of the entire circulating coinage mix on a regular basis and provides this information to the Government, when requested,” he said.

The cost of the coin is derived from its nickel and copper content, and the costs of manufacture and distribution.

Last year, Mr MacDiarmid told a Senate hearing it was “probably an appropriate time for us to be doing a review” into the coin’s use.

Removing the coin would be a decision for the federal government, he told The New Daily.

Such a decision is inevitable, said a spokesman for the retail sector.

“It’s fairly logical to say that at some point or another the five cent piece will go,” Australian Retailers Association (ARA) executive director Russell Zimmerman told radio station 2UE on Wednesday morning.

Its removal might benefit business owners, given that most have transitioned away from cash and toward tap-and-go purchases on card, he said.

“It does complicate your business, in the fact that you’ve got an extra coin in the till.”

Consumers may, however, be forced to pay slightly higher prices, at least in the short-term.

This is because shop owners would probably round up prices, rather than down, Mr Zimmerman predicted.

“If it’s around about $1.95, you’re probably going to have trouble rounding that down,” he said.

“You’re probably going to have to make it $2.”