In its latest Mining Deals report, PwC said all signs point to a slow second half of 2012 in terms of mergers and acquisitions, likely leaving the $53.6 billion Glencore/Xstrata merger as the top of the year.

The proposed Glencore/Xstrata merger would create a huge mining firm valued at more than $70 billion.

Although company valuations have become more attractive, miners are focused on shareholder return in light of high capital and operating costs and falling commodity prices. This has led many miners to abandon the growth-at-all costs mantra that used to once dominate the industry, the PwC report said.

The volume of global mining mergers and acquisitions deals dropped to 69 in August from 143 in July and 141 in June while deals values have averaged $3 billion per month since June, a very low value according to PWC.

The lower deal volume at the start of the second half follows a 30 percent drop in global mining M&A deal volume for the first half of 2012 to 940 transactions compared with 1,371 transactions for the same period in 2011. The total deal value in the first half was $79 billion, slightly higher than the $71 billion over the same period a year earlier, PWC said.

Excluding the Glencore-Xstrata deal, the total deal value announced in the first half of 2012 would drop to $25 billion, one-third of last year's first half-year total, PWC said.

PWC cited several reasons for the lower mining mergers and acquisitions activity, including a renewed focus on shareholder return through cost control, concerns about resource nationalism, and shareholder worries that companies might misspend their cash on acquisitions.

“Volatile capital markets and global economic uncertainty are to blame for this significant drop in activity, as Europe continues to sort out its debt crisis and growth in China slows to a more moderate annual rate of 7.6 percent in the second quarter of 2012,” said the report. “In the U.S., money has also been sitting idle, as many investors wait for the result of the Presidential election in November before deciding how to deploy their cash.”

Mining companies are already starting to pare back their capital expenditure plans in light of lower cashflow generation expectations. BHP Billiton Ltd. has delayed the approval of its $30 billion Australian uranium and copper Olympic Dam project, while Anglo American PLC has decreased its capital expenditure plan for this year and the next.

PWC also noted that “shareholders are weary of companies spending substantial amounts on takeovers as a result of recent high-profile write-downs and uncertainty of the future.” Rio Tinto PLC has written down $18.2 billion of the $38 billion purchase price it paid for aluminum producer Alcan Inc. in 2007, while BHP Billiton has written down the value of U.S. shale gas and Australian nickel assets by a combined $3.29 billion.