A resources analyst says the slump in Australia's mining industry is due to complex issues at home and in China.

Thermal coal has hit two-year lows of around $US88 a metric tonne.

Iron ore has dropped around 15 per per cent in two months, fetching an average of less than $US120 a tonne.

Matthew Trivett, of Patersons Securities, says the market is not as confident as it used to be about the information coming out of China, which is the largest buyer of those commodities.

He says some Chinese Government decision making is based on on appeasing the masses rather than on solid economics.

Mr Trivett says there are also problems with the high cost of Australian mining.

"On the home front, we've got a lot of rising costs, lot of union action, a lot of the projects coming on line need a lot of capital," he said.

"And what we thought was going to be a good revenue stream in the future is getting smashed by prices falling off a cliff."