LONDON – The last time mining companies made this much money, they went on a debt-fueled buying spree that almost buried some of the biggest in the industry.

Investors hope they’ve learned their lesson.

"Give us back money through the dividend process, that’s what shareholders like,” said Clive Burstow, who helps manage about $475 million of natural-resource assets at Barings in London. "I’m hoping we’re not going to start hearing about M&A coming back on the table."

The turnaround in miners’ fortunes is startling. Commodity prices that fell by half from a peak in 2011 wrecked the value of acquisitions and investments in new mines from preceding years. Even giants such as Glencore and Anglo American were left heaving under the weight of their borrowings as cash flow and profits plunged.

Yet the slump was a catalyst for the biggest restructuring of operations in decades. Weak units were sold, dividends cut or scrapped and debt axed. After all that streamlining, the outlook got even better as commodity prices rebounded, fueled by improved demand from China.

By 2016, diversified miners generated a total of $12.9-billion of spare cash, from just $153-million two years before, UBS Group said. They’re set to deliver $47-billion beyond what’s needed for dividends in the next three years, the bank said in a note. Clarksons Platou Securities forecasts the highest so-called free cash flow for the industry this year since 2011.

More worrying for shareholders who prefer the companies to distribute more cash is that mining deals are on the rise. While still about half the level of five years ago, the combined value of transactions doubled in 2016, according to data compiled by Bloomberg.

“The lessons are still pretty fresh in everyone’s mind from the 2011 and 2012 period where windfall profits were used to build huge projects,” said Richard Knights, a mining analyst at Liberum Capital in London. “There are not many examples of big M&A that went well.”

Mining companies spent more than $200-billion on deals in 2011 and 2012 as prices for many minerals surged to records. That’s more than in the last four years combined.

The result was a borrowing binge that drove debt at the ten biggest miners to an all-time high of $145-billion, leaving them ill-equipped to deal with the following five years of declining commodity prices.

Shareholders paid the price for that extravagance.

After years of ever-increasing payouts, Rio Tinto and BHP Billiton halted these so-called progressive dividend policies. Glencore and Anglo scrapped payments altogether.

Though painful for investors, those cuts started to put company finances in order. Some also ditched weaker operations, including Glencore selling $6.3-billion of assets, and Anglo offloading businesses including a niobium and phosphate unit for $1.5-billion.

CHINESE REVIVAL
In addition, a gauge of commodity prices has gained more than a third from its lows as China, the biggest consumer of raw materials, introduced measures to revive economic growth. The rally in natural resources will continue in the first half of this year, partly on stronger industrial activity, according to UBS.

While it’s tempting for mining companies to take advantage of the higher prices by boosting supply, they’ll be wary of repeating past mistakes.

Rio Tinto CEO Jean Sebastien Jacques told investors in December the company would demonstrate “relentless capital discipline.” The miner may boost its payout and offer a special dividend for 2017 after reducing debt, Credit Suisse Group AG said in a note Friday. BHP CEO Andrew Mackenzie has said cutting borrowings is a priority in the short term.

“All they want to do is repair balance sheets and restore and maintain dividends,” said Neil Gregson, who manages about $2.5-billion of natural-resources stocks at JPMorgan Asset Management in London. “Supply will get tighter that will support prices, but companies are very reluctant to build new mines.”