It comes after deal volume increased in 2016 to 477 from a low of 358 in 2015, but value fell by 9% to $US44.3 billion, the lowest since 2004.

EY Global Mining & Metals transactions leader Lee Downham said executing deals last year was extremely difficult due to ongoing volatility.

“The level of divestments and assets listed at rock-bottom prices predicted at the outset of the year just didn’t materialise as the outlook improved so significantly through the course of the year,” he said.

Alcoa’s Arconic demerger and Freeport McMoRan’s sale of Tenke Fungurume made up 14%, or $6 billion, of total deals in 2016.

Copper was top of the wish list for acquirers last year, with the red metal comprising 30% of the top 10 deals, and 15% of total sector value.

Coal deal value dropped by 39%, though there are thought to be several divestments due in that sector this year.

“In 2016, we saw divergence between commodities that’s set to continue this year,” Downham said.

“There’s no one-size-fits-all strategy; companies must resist the herd mentality adopted during the peak of the super-cycle and carve their own strategic path based on their portfolio. Investors need to consider the company and not just the sector broadly.”

EY said the return of China to buying was a positive sign, with 40% of the top 10 deals undertaken by Chinese acquirers.

Capital raised in China also doubled to $100 billion. Without China, global capital raised dropped by 16% to $149 billion.

“The industry consensus is that commodity prices, generally, were at or near the bottom of the cycle in early 2016 and will remain above this level going forward, albeit significant volatility will remain,” Donwham said.

“We expect a more positive industry outlook and access to capital to improve transaction activity this year.

“Companies must focus on their individual portfolios and the unique value they can provide to shareholders.”

EY said multibillion dollar transformational deals seemed unlikely, aside from potential large-scale consolidation in China.

And those companies which strengthened their balance sheets during the downturn would now be likely turning their focus to growth, EY said.

At the junior end, EY predicted the lull in exploration as a result of the lack of capital would inevitably trigger supply tightness and a return to junior raisings.

IPOs are also expected to pick up, which is evident in Australia, with five junior miners already listing so far this year – with another to come tomorrow.