Resources Minister Martin Ferguson says the era of high commodity prices is over and to stay strong Australia must be more productive and develop new technology.
Speaking at the opening of the Australian Minerals Research Centre in Perth Ferguson said the "premeium" prices China was paying for coal and iron ore were gone.
"We're not going to see iron ore at $US180-$US190 a tonne, we're not going to see thermal coal at about $US170 [a tonne], coking coal at about $US320 a tonne any more," he said.
"The only way we will maintain our revenue stream as a country, at a state and federal level, is if we expand capacity."
Ferguson said Australia was a high cost environment for mining companies and as prices fell new technology would be needed to keep profits high.