April 19 (Bloomberg) -- Emerging economies' demand for resources may sustain high commodity prices for several decades, Australia's central bank said.

While China's appetite for commodities has prompted mining and energy companies to expand production, which may dampen prices, that effect will be countered by rising demand, the Reserve Bank of Australia said in a report in its monthly bulletin, released in Sydney today.

A continued commodity-price boom would stoke economic growth in Australia, the world's largest exporter of iron ore and coal. The economy is now in its 16th straight year of expansion, which was last year fueled by an investment surge at mining and energy companies including BHP Billiton Ltd., Rio Tinto Group and Woodside Petroleum Ltd.

``While increased supply will exert some dampening influence on prices, the rapid growth in world demand for metals and other resources appears to be showing little sign of abating,'' the Reserve Bank said.

``There are good reasons to believe that strong demand, from emerging economies in particular, may continue for several decades.''

China-led demand for metals, minerals and energy has stoked one of the largest and fastest increases in commodity prices of the past century, matched only by the 1930s and 1970s, the bank said.

The Reserve Bank's currency-adjusted index of commodity prices was at a record in March, and has risen 84 percent in the past four years, led by a 205 percent increase in base-metal prices.

To contact the reporter on this story: Hans van Leeuwen in Sydney at hvanleeuwen1@bloomberg.net.

Last Updated: April 18, 2007 21:56 EDT