In its annual review of global trends in the industry across the world’s 40 biggest mining companies, PwC found that overall fell by 16% during 2014 to $US791 billion ($A1.03 trillion) – less than half the $1.6 trillion reported in 2010 and the same as was reported in 2005.

A focus on cost efficiencies and lower spending resulted in improved free cash flow from negative $3 billion to $24 million in the black resulting in record high dividend values, with yields up from 4.3% to 5% last year.

PwC said the figures showed the industry’s fight for value and free cash flow had “descended into a brawl” following a year when miners ramped up production, slashed capital spending and reined in costs.

Such measures were driven by continued pressure on commodity prices in 2014. Iron ore, coal and copper prices fell 50%, 26% and 11% respectively over 2014.

Of the companies assessed, eight had credit rating downgrades during 2014 and a further 10 were placed on negative outlook.

PwC Australia energy, utilities and mining leader Jock O’Callaghan said 2014 was the year efforts to control costs and reduce capital spending started to come through in reported results.

“Last year was the year the industry really turned the screws to increase efficiencies, and that’s been borne out by a 5% reduction in operating costs,” he said.

“Expenditure on significant projects declined 20% and exploration spend was wound back 53% to a miserly $4.9 billion.

“Capital velocity – a proxy for measuring a company’s growth agenda – slowed to just over 12%, a trend we expect will continue throughout 2015.”

The plight of iron ore was driven by a combination of Chinese slowdown and oversupply, but while decreased commodity prices drove lower revenues, the report found this was partially offset by higher production figures.

Regarding iron ore, O’Callaghan called for perspective over the situation in China.

“China still accounts for 40-50% of global commodity demand and despite lower growth will still add over $1 trillion to its GDP in 2015 – more than the combined market capitalisation of the world’s 40 largest miners,” he said.

“So demand will continue to grow, albeit at a slower pace.”

In the Australian case, O’Callaghan said the government would need to manage its response to the iron ore slump carefully or risk placing further burdens on the industry.