SYDNEY (Commodity Online): It seems Australia's mining sector is witnessing the biggest ever boom in its history and almost all mining companies are going through this phase now.

According to reports appeared in the Australian media, the country's economy is built on a vast land mass rich in mineral deposits. And the mining sector has experienced five big mining booms, and these have generated periodic surges of export-based wealth from local discoveries or global demand.

This boom being seen now is special because it happened at a time when the global economy witnessed a big slowdown.

The booms have forced abrupt economic and social change and generated inflation pressures that have been difficult to contain.

In 1850's gold rush was Australia's biggest mining production boom. At its peak, mining accounted for 35 per cent of colonial output. As fortune seekers from around the world flocked to the Victorian goldfields, the population almost trebled in a decade.

According to a report in The Australian, typical of such booms, the gold rush squeezed out other industries such as wool, in part through labour shortages that pushed up the wages of shepherds.

The late 1800's mineral boom extended to new gold and metal mines, particularly in Western Australia, Queensland and NSW, including Broken Hill. It was financed by British money.

The mining boom of the 1960s and early 70s was driven by Japan's industrialisation and its demand for iron ore from huge mines in Western Australia and coal from Queensland. Bauxite mines were developed and oil was discovered in Bass Strait.

The China boom began about 2005, was interrupted by the global financial crisis but is now picking up strongly again. Led by iron ore and coal, mining production has already increased to its highest share of the national economy in more than a century. Mining investment has risen to its highest level ever at 4 per cent of gross domestic product.

This development boom is the result of the soaring mining and energy prices produced by the demands of China's massive industrialisation. Australia's terms of trade - the ratio of export prices to import prices - has risen higher than in any previous mining boom. As in previous booms, this is generating strong immigration-fuelled population growth, overloading our infrastructure and encouraging a two-speed economy.

The scope for China's industrial catch-up means that this boom could last a couple of decades, if only we heed the history lessons.

Compared to 30 years ago, the economy is more deregulated and more flexible while the industrial relations system is less centralised.