UPDATE 1-Australia lifts most metals output forecasts

SYDNEY, Sept 22 (Reuters) - Australia on Tuesday lifted its forecast production of iron ore, thermal coal, copper and other industrial metals in 2009/10 but again cut its export earnings estimate, by about A$1 billion ($862.8 million), due to lower selling prices. The biggest upward revisions from the June outlook were 14.2 percent for exports of thermal coal and 12.6 percent for iron ore, key inputs for China's booming economy, the Australian Bureau of Agricultural and Resource Economics (ABARE) said in its latest quarterly bulletin. Much of the recovery is pinned on expectations that China, the world's largest importer of iron ore and copper concentrate and a big consumer of almost every other metal, will remain a fervent buyer of Australian commodities. China bought record monthly quantities of commodities earlier this year, after a brief hiatus during the depths of the global financial malaise. "The best indicator for Australia is to look into the higher import figures for China. The bulk of the iron ore and thermal coal will go to China, no doubt about it," said Mark Prevan, senior commodities strategist for Australia & New Zealand Bank. Australia's two largest iron ore miners, Rio Tinto (RIO.AX: Quote, Profile, Research)(RIO.L: Quote, Profile, Research) and BHP Billiton (BHP.AX: Quote, Profile, Research)(BLT.L: Quote, Profile, Research), are spending billions of dollars to increase iron ore production in Australia's west, the bulk of which is earmarked for export to Chinese steel mills. A legion of smaller-sized miners have also cropped up in the last year and are expected to boost exports by a further 50 million tonnes or so. Australian production of iron ore increased by 23 percent in the quarter ended June 30 compared with the previous quarter and will continue to expand, ABARE said. Metals prices have galloped higher this year on the promise of renewed demand in China. Copper MCU3 more than doubled to over $6,000 a tonne, zinc MZN3 is up 65 percent and nickel MNI3 is up 80 percent. But they are still well below the record highs struck last year. For a table of ABARE forecasts, click on [ID:nSYA008047] ($1=1.159 Australian Dollar) (Reporting by James Regan; Editing by Michael Urquhart)