Deputy Reserve Bank governor Ric Battellino said the Australian economy was experiencing a surge in mining activity and investment as the effects of the global financial crisis recede.

The growth "is very broad based across a range of resources, but the core part centres on the large expansion in the iron ore, coal and gas industries," Battellino said in a speech to the Sydney Institute foreign policy thinktank.

"It has been, to a large degree, driven by demand for resources by emerging economies, with China being the most significant."

The fifth major mining expansion in Australia's history, Battellino said the current boom started in 2005 and was "severely testing the productive capacity and flexibility of the economy" by early 2008.

"That all changed in the second half of 2008, as the effects of the mining boom were offset by the impact of the global financial crisis," Battellino said.

"However, now that this has passed, the underlying dynamics of the resource boom are starting to re-appear."

Both the volume and price of resources exports had risen strongly and now accounted for a significant share of Australia's GDP, he said.

The current boom also differed from previous expansions because it had been preceded by the floating of the Australian dollar on the open market in 1983, helping limit inflationary pressures.

Battellino said previous mining surges had typically lasted no longer than 15 years, but how long the current expansion would last was uncertain.

"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," he said, adding that it could be as long as 20 years.

Rapidly industrialising China has become Canberra's biggest two-way trading partner with deals worth 76 billion Australian dollars (68 billion US) over the past financial year as it sucks in vast quantities of Australia's resources.

Australia, buoyed by its strong recovery from the downturn, is pushing for free-trade agreements with Japan and China and is studying a further deal with India.

The country relied heavily on Asia as it became the only advanced economy to avoid recession during the downturn, with Japan, China, South Korea and India its top four export markets.

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