Labour shortages, a high exchange rate and new taxes are eroding the competitiveness of Australia's mining industry, a resources lobby group report said Monday, warning of a hit to growth.

Commissioned by the Minerals Council of Australia (MCA), the report said more than half the nation's copper, coal and nickel mines had costs "above global averages" and even the key iron ore sector was struggling.

Labour costs were mounting "much more quickly than the national average" and were among the highest in the world due to skills shortages, and the booming Australian dollar was "unnecessarily high", it added.

In the thermal coal sector the MCA said the "majority" of proposed investment was at risk and by 2020 iron ore projects outside the established Pilbara region would cost up to 75 percent more to build than in West Africa.

By 2020 it would be cheaper for China to import iron ore from Brazil than from new Australian projects, it said, with the Asian giant's state-owned enterprises also making "substantial investments" in African mines.

"Australia is losing the battle for market share. While volumes have grown in important commodities, our market shares are at best stagnant, and in some cases declining," the report said.

"The modelling suggests that, without improvements in our competitiveness, real GDP in 2040 is 5.3 percent lower than it would be under (a more) competitive scenario," it added, calling for the abolition of new taxes on iron ore and coal profits and corporate pollution.

The report said 75 percent of the US$500-billion in proposed mining sector investment remained uncommitted and projects stood to be lost offshore to cheaper nations including Mongolia and Mozambique.

Labour shortages were driving up mining sector wages, with construction worker salaries booming nine percent every year between 2001-2011, creating a threat of "labour cost super-inflation".

Skilled workers needed to be imported to plug the gaps, and workers needed to be drafted from the struggling manufacturing industry to be retrained for work in the mining sector, added the MCA, which represents many of the big mining companies.