The global mining industry faced a challenging year in 2014 with falling commodity prices and increasing short-term volatility, which forced companies to control costs and free up cash flow, according to a report released by PricewaterhouseCoopers (PwC) on Monday.

The overall market capitalization of the top 40 miners plummeted by $156 billion in 2014, a decline of 16 percent in combined market values from 2013, said the report.

The largest miners cut spending and largely managed expectations through higher production, with unexpected help from currency devaluations and lower input costs. Despite this, there were continued headwinds from weak commodity prices, which drove revenues lower for companies, according to PwC.

While China's slowing economic growth has had a major impact on demand for steel-making commodities, as well as base metals, the expectation of China's continued thirst for commodities in the longer term remains a key driver for global miners, the report said, noting that China accounts for as much as 50 percent of global commodity demand.

PwC said the general outlook for the global metals and mining market remains bleak due to the combined effects of a slower rate of economic growth, particularly in emerging markets.

The oversupply of bulk commodities, especially iron ore and coal, combined with China's cooling growth rates, have been major contributors to the price slump. Specifically, iron ore, coal and copper prices fell by 50 percent, 26 percent and 11 percent respectively in 2014,  said the report.

The report also noted that global mining companies' capital spending on significant projects declined by 20 percent, with further decreases expected in 2015.

In Asia, more industry consolidation is expected between key resource players from India and China in order to stem production overcapacity, the report said.