The Reserve Bank of Australia has reported a remarkable expansion in its mining industry. This surge in the mining activity is credited mainly to the rise in the demands from China and India.

"This is again very broad based across a range of resources, but the core part centers on the large expansion in the iron ore, coal and gas industries. This has added an important degree of flexibility to the economy, by allowing the real exchange rate to rise through a means other than inflation", said Mr. Ric Battellino, RBA's Deputy Governor.

As the global economic crisis is fading away, Australia will be guarding itself against pressures on inflation, which has accompanied previous booms.

For the first time the Australian dollar exchange rate has been witnessing a change.

"On this occasion, the growth potential of countries such as China and India suggests that the expansion in resource demand could continue for an extended period, though this will depend at least to some extent on the economic management skills of the authorities in these countries, not to mention our own", Mr. Battellino said.

In the 30 years since the previous boom, the Australian economy had developed in ways that should make it better able to accommodate the surge in mining activity.