But Mr Cully does not expect the recent rally in iron ore and coal prices to last, and his report contained a sobering view of future investment in Australia's resources sector.

Just six months ago, Mr Cully's team forecast that mining and energy exports would be worth $163.4 billion in fiscal 2017, but stronger than expected prices for iron ore, coking coal and thermal coal in recent months have forced that, and other predictions, to be upgraded.

The biggest factor in the improved outlook was coking coal, which stunned markets by rallying from $US75.30 per tonne in February 2016 to $US308.80 per tonne in November on the back of supply disruptions and improved demand in China.

Most of Australia's coking coal comes from Queensland, and the Queensland government expects the commodity to provide a $1.4 billion boost to revenues in fiscal 2017.

The market or "spot" price for coking coal peaked on November 30 and has since retreated by almost 35 per cent to be fetching $US201.30 per tonne on Friday.

But while the "spot" price for coking coal has started sliding, some miners are still receiving high prices because they sell their coal at prices that are agreed with steelmakers on a quarterly basis.

Miners selling under the benchmark quarterly contract will receive $US285 per tonne for premium coking coal until March 31.


Mr Cully believes the contract price will average $US186 per tonne in 2017 and $US109 per tonne in 2018. The value of coking coal exports is tipped to reach $39.9 billion in fiscal 2017 and $26.6 billion in 2018.

While coking coal has starred lately, iron ore has been Australia's most valuable commodity export for years, and is tipped to continue its reign in fiscal 2017.

Prices for the bulk commodity have been stronger than expected in recent months on the back of credit-fuelled demand for steel in China, and Mr Cully expects exports of iron ore to be worth $62 billion in the year to June 30, up from his previous forecast of $54 billion.

Like coal, iron ore prices are expected to slide from current levels around $US76 per tonne, with Mr Cully tipping iron ore will average $US58 per tonne in fiscal 2017 and $US49 per tonne in fiscal 2018.

The forecast is broadly similar to the assumptions by the Turnbull government in its recent mid-year economic and fiscal outlook, in which it assumed iron ore prices would retreat to $US55 per tonne (excluding the cost of shipping) by the September quarter of 2017.

"Unfortunately, the high prices that are expected to bolster Australia's resources and energy export earnings in 2016-17 are not expected to last. The combination of slowing demand growth from China's steel sector and increased global supplies are expected to lower export unit values in 2017-18," said Mr Cully in a foreword to his report.


"However the production phase of the mining boom will continue with export volumes forecast to increase in each of Australia's top five resource and energy commodities in 2017-18."

Liquefied natural gas looks set to take the baton to some degree from iron ore and coal in coming years, with Mr Cully's team predicting that the value of Australian LNG exports will more than double over the two years to June 30, 2018.

Australian LNG exports were worth $16.5 billion in fiscal 2016, but are tipped to reach $37 billion in fiscal 2018.

The increase in export values is expected to be driven by two major factors: rising export volumes as a number of big Australian LNG projects start producing for the first time, and rising prices for the commodity.

Three LNG projects have started producing over the past year (Gorgon LNG, Australia Pacific LNG and Gladstone LNG), while several more (Wheatstone LNG, Ichthys LNG and Prelude LNG) are expected to come into production over the next 12 to 18 months.

Completion of the various projects prompted a 50 per cent rise in export volumes between September 2015 and September 2016, and Mr Cully expects export volumes to continue rising by 35 per cent per year to reach 67 million tonnes by June 2018.

Despite the strong contribution from commodity exports, federal Treasurer Scott Morrison revealed in December that it was not enough to offset a $30.7 billion loss of revenue over four years from sliding wages growth and weak company profits.