The forecaster said in its December predictions that it expects Australia's total coal export earnings to increase by $2.5 billion to $13.3 billion. The figures confirm coal as Australia’s dominant export industry, ABARE said.

The major factor impacting on higher export earnings will be the 2001-02 rise in the contract price of coal negotiated with the Japanese earlier in the year.

In the current financial year, ABARE predicts export earnings of metallurgical coal will rise by 19% to almost $7.9 billion. Thermal coal export earnings are forecast to rise by 29% to $5.4 billion.

Going forward, ABARE believes hard coking coal prices have peaked in 2001-02. It forecasts a fall of up to 6.9% in real terms, or up to 4.7% in nominal terms, which will be set during negotiations between Australian producers and Japanese buyers for the Japanese fiscal year beginning April 1.

"On balance, relatively tight supply conditions are expected to support further modest increases in hard coking coal prices in markets where demand is increasing, particularly later in 2002," ABARE said.

"However, the outlook for prices due to be negotiated in Japan early in 2002 is not as positive."

Australian thermal coal exports in 2000-01 grew 11% to 88 million tonnes, attributed largely to Asian power utilities. The growth is expected to slow to 6.5% in 2001-02, to a figure of almost 94Mt.