PwC’s 12th annual review of the aggregated financial results of the world’s 40 largest mining companies as measured by their market capitalizations draws on a fist-fight analogy to describe how mining companies responded to another year of mostly falling commodity prices and falling market capitalizations in 2014. In particular, Mine 2015: The Gloves Are Off noted there has been a vigorous and contentious debate among iron ore mining companies as to the appropriate supply strategy, given a measurable slowing in iron ore demand growth.

The rise and fall in total market capitalization of the top 40 over the past decade provides a measure of how the industry fared during those years. At the end of 2005, total capitalization stood at $791 billion. Over the next two years, it nearly doubled to $l,481 billion before plunging in $563 billion at the end of 2008. From that point, it nearly tripled to $1,605 billion at the end of 2010, but since then, it has been in a general downward trend, ending 2014 at $791 billion—back where it was at the end of 2005.

Looking to the future, Mine 2015 commented, “A slowdown in China’s annual economic growth, to around 7% from double-digit growth in recent years, is expected to weigh on the mining industry in the months to come. China accounts for as much as 40% to 50% of global commodity demand. This slower growth has already had a major impact on demand for key steelmaking commodities, namely iron ore and metallurgical coal. With potentially more weaknesses to come in China’s real estate market, as well as an overall lower pace of urbanization, demand could weaken further.

“However, to put China in perspective, the lower projected 2015 GDP growth will still create about a $1 trillion increase in the base—more than the combined market capitalization of the top 40. We believe that the reforms being undertaken will place China in a good position to continue to grow over the long term, albeit at a slower pace.”

When it comes to supply, the outlook varies by commodity, Mine 2015 said. “Iron ore and coal will continue to be under pressure, as both commodities struggle with oversupply. This is caused partly by marginal operations having been slow to close.

“The outlook for base metals may not be as bleak, especially for nickel, copper, zinc and aluminum. Tighter supply for these commodities has led to either a stabilization or increase in prices. Nickel supply, in particular, could see constraints as stockpiles decrease following a ban on exports of unprocessed ore in Indonesia. Meantime, the shutdown of older mines is expected to favorably impact the price of certain commodities, such as zinc.”

In terms of profits, 10 companies accounted for 75% of the top 40 companies’ total profits in 2014. Those 10 companies, ranked in order of their net profits, were BHP Billiton, China Shenhua, Rio Tinto, Coal India, Glencore, Freeport-McMoRan, AngloAmerican, Fortescue, Norilsk Nickel and Grupo Mexico.

Aggregated return on capital employed by the top 40 mining companies was only 9% in 2014, the lowest level in the history of the Mine reported. Many companies set a 15% to 20% return on capital as a benchmark when they invest in new projects. In 2014, only six of the top 40 managed to exceed a 15% return on capital employed: Coal India, Norilsk Nickel, India’s National Mineral Development Corporation, Randgold, Shandong Gold and Newcrest Mining.

Mine 2015 includes discussions of a number of other trends currently impacting the mining industry, among them: resource nationalism, asset impairments, lower energy prices, reduced capital spending, lack of financing for junior exploration companies, and divestitures and consolidations. The full 48-page report is available at