A new report by accounting firm Ernst & Young has found that the value of mining deals globally plunged by 45 percent over the year to March to $US3.3 billion in the first quarter of 2016.

The report also predicted that things could get worse before they get better, saying that further adversity could be expected for miners in 2016, with prolonged volatility in commodity prices, increasing distress and subdued investment appetite, before a turnaround occurs.

Mining deals could pick up during the course of the year, but Ernst & Young said that those deals will likely be driven by the need to cut debt and possible purchases of distressed companies by their lenders and other creditors.

ABC News Australia reported that there were 72 mergers and acquisitions globally for the first quarter, down 17 percent over the year, with the three largest deals divestments by big miners.

The number and value of deals also fell significantly from the December quarter globally.

Mergers and purchases of gold mines accounted for nearly half the deals done in the March quarter, worth $US1.7 billion, with $735 million in coal deals and $568 million for steel.

In Australia, the volume of deals was near record lows at 17 deals for the first quarter of 2016, with just two big deals accounting for 97 percent of the total deal value of $US1.4 billion.

The two big deals were Rio Tinto’s sale of its Bengalla coal mine in the Hunter Valley in New South Wales for $US606 million to smaller rival New Hope, and the purchase by Australian-based private equity group EMR Capital and its U.S. partner Farallon Capital of the Martabe gold and silver mine in Indonesia for $US775 million, a deal which took one year to negotiate.