Profit at the world's 40 largest mining companies tumbled 49 per cent to $68-billion last year during an industry slump that has stretched in 2013, says a new report by PricewaterhouseCoopers.
John Gravelle, PwC's mining leader for Canada and the Americas, said weak commodity prices have dragged down the sector.
"Miners are faced with a confidence crisis and they're focused on trying to restore confidence," Mr. Gravelle said in a statement accompanying the 60-page report.
He pointed out that there are new CEOs at five of the top 10 mining producers. "Across the board, there's a renewed focus on maximizing returns from existing operations through managing productivity and improving efficiencies. Looking at the leadership changes last year, it reflects an industry that values experience and operational understanding over deal-making and growth," Mr. Gravelle said.
PwC said the 40 leading mining firms by market capitalization saw their volumes rise by six per cent, but revenue was flat. Gold miners' market capitalization suffered in 2012, and took a further hit when gold prices fell sharply in April this year.
With some projects scaled back or deferred, the major mining companies have forecast capital spending will decrease 21 per cent to $110-billion this year, according to data compiled by PwC.
"The importance of returning to a lower cost base rather than relying on higher commodity prices should be on every miner's agenda," Mr. Gravelle said. "Miners must deliver this while operating in an environment of intense resource nationalism where we see governments in traditional mining jurisdictions legislating substantial tax increases and emerging mining jurisdictions ignoring mining contracts after substantial investments are made."
The report noted that half of the world's 40 biggest miners have the majority of their operations in emerging countries.
China is expected to fuel growth in its own market as the country becomes an increasingly powerful player in global mining, PwC added.