But for Griffith Business School's Associate Professor Bradley Bowden the forecast is not so positive. He is concerned the economic dynamic that is the Pan-Pacific coal trade is delicately poised and now vulnerable to China’s "disproportionate effect".
With the Chinese economy showing signs of slowing, and demand for steel on the wane, coking coal in Australia may not be in high demand in the near future, potentially leading to a drop in the price of coal, he says.
"The China story is not an accurate reflection of our coking coal trade. China has had a disproportionate effect," Associate Professor Bowden, an economic historian and expert of the mining industry, says.
China's domination of the market coincided with a sharp rise in the price of coal from US$79.50 per tonne in 2007 to a record US$193.79 in 2008. This pattern also saw control of the price of top-quality Australian coal effectively wrestled from the previously dominant Japanese Steel Mills which had an established price around US$34 per tonne as recently as 2004.
"Trade with China has created an extra supply of coal during the boom and we cannot just take this off the table if the boom ends. During the boom our cost base has risen to pay for labour and supplies. A ripple effect runs right through the economy," Professor Bowden said.
"If things were to change the break-even point will be a lot higher than $34 per tonne as it was when the Japanese were in control.
"This would lead to a financial squeeze across the economy, with fly-in-fly-out operators, for example, under pressure to stay in business.
"A collapse in the value of the Australian dollar would be almost inevitable if coal exports to China decreased sharply. It could tumble to something in the order of US$0.60c very quickly.
"That would have huge repercussions for the Australian economy and bank repayments of overseas debt, which could potentially soar from 15 per cent of GDP to almost 25 per cent of GDP overnight.
"Banks would have to adjust lending costs accordingly. House prices would collapse, governments would be squeezed."
Associate Professor Bowden says the country's manufacturing and food processing industries need to be propped up as a priority.
"In truth GDP per head in Australia has been flat since the GFC. If people don't feel better off, it's because they're not. But it has been cushioned by the falling prices of consumer items, many of which are imported," he said.
"The high dollar has kept the cost of living down but a sudden turnaround would hurt us hard. If the value of the Australian dollar fell, this cushion would also be taken away.
"Australia is a commodity market that goes through boom-bust cycles. The bigger the boom, the bigger the bust."
