Although there is some reduction in investments in the mining sector in Australia, the decline could be made up by expected increase in mining production in the next 5 years.

The Mining Australia report forecasts mining production to expand by 41 per cent during this period, according to economic forecaster BIS Shrapnel. As a result of the higher production, mining activity would contribute to almost 20 per cent of Australia's gross domestic product from the current 18.7 per cent.

"The growth in the mining part of the Australian economy is being driven by production from here. So the strong growth that we see in production is going to boost the share of mining, in terms of the share of the Australian economy," ABC quoted BIS Shrapnel Head of Infrastructure and Mining Adrian Hart.

He added that the mining industry would face the twin challenges of lower commodity prices and a high Australian currency.

"As such, they are going to extraordinary lengths to cut back on the high costs/low productivity culture which characterised the construction phase of the [mining] boom," Mr added.

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Mr Hart stressed Australia's mining industry is going through an evolution that would create big winners and losers in Queensland. He identified iron ore and oil and gas as the big winners because of the strong expansion of liquefied natural gas production in the next five years.

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