EY’s biannual Global Capital Confidence Barometer also found that volume nearly halved year-on-year to 79 transactions.

Volume and value were down by around a third compared with the December 2014 quarter.

Gold sector activity remained high, while acquisitions by private investors accounted for 28% of deal volume.

“While private capital investors continue to show patience, distress in the sector is likely to be the key driver of activity,” EY Global Mining & Metals transactions leader Lee Downham said.

“Companies in the iron ore and coal sectors face the most immediate financial challenge, but there is a wider need for restructuring across the sector and we may see quality assets coming to the market in order to release much needed capital among multi-commodity producers.”

Downham said 35% of mining and metals respondents in the survey identified competition as the key challenge to acquisition strategies.

Commodity and currency was seen as the main risk to mining over the next 6-12 months.

As a result, the proportion of mining and metals companies focused on growth fell to 29% from 44% a year ago.

But almost half of mining and metals companies plan to pursue an acquisition in the next year, citing an expected improvement in markets.

A large number of Australian mid-tier miners, including Western Areas, Sandfire Resources and Northern Star Resources, have indicated they are looking for opportunities in the current market, pointing to a possible lift in M&A activity later this year.