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(Bloomberg) -- Mergers and acquisitions among mining assets declined to the lowest in a decade last year as companies shied away from large deals and private-equity funds were slow in execution, Ernst & Young LLP said.

The value of mining mergers and acquisitions fell 49 percent to $44.6 billion, the lowest since 2004, E&Y said in a report today. The number of deals declined 23 percent to 544. That excludes Glencore Plc’s takeover of Xstrata Plc in 2013.

“We expect to see more deals from private capital,” Lee Downham, global mining transaction chief at E&Y in London, said in a phone interview. “But I don’t think there will be $10 billion plus or $20 billion plus type of deals happening. It will still be a gradual entry into the market.”

Former bankers and executives including Mick Davis, a past Xstrata chief executive officer, Barrick Gold Corp.’s ex-CEO Aaron Regent and former JPMorgan Chase & Co. banker Lloyd Pengilly have set up companies and funds to bid for assets put up for sale by the world’s biggest mining companies.

Pengilly’s QKR Corp. completed its first deal last year, acquiring the Navachab mine in Namibia from AngloGold Ashanti Ltd. for $110 million in July. It’s also considering a bid of about $1 billion for Canada’s Nevsun Resources Ltd., people with knowledge of the situation said in November.

Mining companies have been cutting investment and divesting peripheral assets to allow them to keep up payments to shareholders amid a rout in commodity prices.

A shortage of funding, asset sales and the need to merge weak companies in difficult markets will drive deals in 2015, Downham said.

Copper assets were the biggest targets with $10.6 billion worth of deals last year, the report shows. Steel and gold ranked behind copper. The lowest value deals were in potash, uranium, silver, lead, zinc and nickel, according to the report.

“The pace of private capital investment has been considered, and this has proven to be the right approach as share valuations continue to slide on the back of softening metal prices,” Downham said. “This investment should pick up once the price outlook stabilizes and that will most likely trigger broader transaction activity.”

To contact the reporter on this story: Firat Kayakiran in London at fkayakiran@bloomberg.net To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Alex Devine, Tony Barrett

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