A whirlwind year hardly describes what 2008 was for SA's gold sector. It started with a bang, or rather a fizzle, with the power crisis in January. And the pace had been set for the coming months.

The electricity shortage caused Africa's number one gold producer, AngloGold Ashanti, to close its shafts for the longest time since World War 2.

2008 was also the first time the gold price squeaked above US$1 000/oz. But it didn't stay there for long. The price of the yellow metal peaked at $1 003/oz in March before the global financial crisis dragged it down, along with other commodities, to a low of $712/oz in November.

Gold, however, began to show its mettle from the end of 2008, pushing back up above the $800/oz level, while other commodities languished near their lows. Investors see it as a safe place to put their money and, historically, it has offered above-inflation returns.

The financial firestorm brought about a gold rush into exchange-traded funds (ETFs) backed by the metal at the end of 2008 and that extended into 2009. The world's biggest gold ETF, SPDR, resulted in records being broken almost on a daily basis as its holdings soared. Global gold ETF holdings had jumped by about 40% in the first quarter of 2009.

Even in SA there was an increasing investor interest in the yellow metal. Local ETF NewGold had accumulated 28 t of gold at the Rand Refinery in Germiston, such a large amount that the refinery asked Absa (NewGold's owner) to move the gold elsewhere. So it sent it to a vault in the UK.

But it wasn't all sunshine and roses for gold demand. Jewellery sales in India - the world's biggest buyer - slumped as the price of the yellow metal surged. According to The Wall Street Journal, sales are expected to be as much as 70% lower in 2009 compared with 2008, the year in which they also fell 11%. India imported almost no gold in the first quarter of 2009.

SA's gold producers, too, had a mixed bag in 2008. Adding salt to their power-crisis-induced wounds were the deaths in the depths of their mines, and government's subsequent forced shutdowns, which lasted as long as a week.

Nick Holland, who took over from Ian Cockerill as Gold Fields CEO on May 1, had a shocker of a first day. At 10 am, a cage rope snapped, sending nine workers to their deaths. Two days earlier, four other Gold Fields workers had died in two of its mines.

This rude awakening led to Holland taking drastic action to improve the company's safety record. He shut its key Kloof mine main shaft for six months in August. About 60% of the mine's production came from the shaft and the move cost the company 500 kg/month of gold. At today's prices that's worth about R125m.

Gold Fields also pulled out of some mining areas called pillars, which are often associated with safety risks.

It was not all bad news on the safety front in 2008 though. Mark Cutifani, Bobby Godsell's replacement as AngloGold Ashanti CEO, reported the company's first ever death-free quarter. That was for the three months to end-March 2008. The feat has yet to be repeated by any of SA's gold majors, though AngloGold, Gold Fields and Harmony have all shown significant safety improvements.

DRDGold continued to shift its focus to producing gold from mine dumps, as it began to process the high-grade Top Star dump, which used to be a drive-in theatre just south of the Johannesburg CBD.

Safety shutdowns, coupled with the power crisis, meant that SA slid further down the gold production ladder, after having lost its place as the world's biggest gold producer to China in 2007. The country now sits in the number three spot, after the US.

SA production of the yellow metal in 2008 subsided to its lowest level since 1922, with all three of the major producers contributing to the slide. The country had been the world's top gold miner from 1905 to 2006.

A historic affair unfolded subsequent to the end of 2008, when Anglo American wound up the last of its stake in AngloGold Ashanti in March after 92 years, ending its strong links with gold, the metal that built the company and much of Johannesburg.

The residual 11,3% stake in AngloGold went to New York-based Paulson & Co for US$1,28bn.

Over the year, Harmony seemed to recover well from a disastrous 2007 that led to CEO of 12 years Bernard Swanepoel quitting the company suddenly. His replacement, Graham Briggs, managed to get costs under control through a far-reaching restructuring exercise.

He also paid a lot of attention to Harmony's balance sheet by selling marginal mines, and bringing in Australia's Newcrest to partner the company in Papua New Guinea, where it's building the Hidden Valley mine. Harmony also has some attractive exploration tenements in the country.

AngloGold didn't miss out on the corporate action front either. Only AngloGold was shopping. It bought Brazil's São Bento Gold for $70m, followed by the US's Golden Cycle Gold. Cutifani also did a lot of work in chopping down the company's profit-damaging hedge book (gold forward sales at a fixed price). The company now receives about 6% less than the spot gold price.

On the junior mining front, Great Basin Gold (GBG), Aflease Gold and Central Rand Gold (CRG) all made good progress with their projects. GBG is building the Burnstone mine near Balfour, while CRG digs around old workings just south of Johannesburg.

Aflease, which is changing its name to Gold One and listing on the ASX, plans on first production from its Modder East mine on the East Rand by the end of 2009.

All these projects will help lift SA's waning gold production slightly, as their owners take advantage of a significantly higher rand:gold price.