Mining bosses last year must have felt they were trapped inside an episode of the British animated sitcom Stressed Eric, the protagonist of which invariably ends each episode being strangled by an anxiety-induced vein bursting from his forehead.

For the first part of the half of the year they were battling with the SA power crisis, racing to up production to feed a resources-ravenous world. Record price levels produced dollar signs in the eyes of just about every mining CEO. But after three years of the industry's ascent, the floor fell out from under it in the second half of 2008.

Suddenly, commodity prices seemed resolute on proving Newton's laws of universal gravity - on speed. Share prices went to rack and ruin, and growing debt levels gathered and advanced more fiercely than a Highveld thunderstorm.

To say CEOs in the sector gained a few extra grey hairs over the past six months would be an understatement. The mining sector, though cyclical by its very nature, got the shock of its life. Though last year talk was all about expansions and big payouts to executives and shareholders, the mood has completely reversed since the collapse of Lehman Brothers in September. Perhaps this is best illustrated by the mighty Anglo American deciding not to pay a final dividend for the first time in seven decades, and retrenching 19 000 of its employees and contractors.

But Anglo isn't the firm to be hardest hit. Its 79%-held subsidiary Anglo Platinum has let even more blood. For years it has been under fire from analysts for a lack of cost control and poor production performance. Now the night has come, the platinum giant is stumbling around in the dark trying to stabilise its business. It had to reduce its workforce by 10 000 this year as the platinum price dropped from last year's high of US$2 300/oz to less than $800/oz. The world's biggest producer of the white metal (used in autocatalysts to reduce pollution from diesel engines) slashed more than half of its planned capital spend.

AngloPlat's biggest rival, Impala Platinum (Implats), has also taken a hit. But better cost management has allowed it to evade retrenchments, though it too has had to cut back significantly on spending to expand production. Third-biggest platinum miner Lonmin was already struggling even before the financial crisis walloped it.

Then CEO Brad Mills and chairman Sir John Craven were trying to fight off a bid - which they said was too low - from an awfully acquisitive Xstrata boss Mick Davis. As it turned out, their resistance was unnecessary - Xstrata had to back down from the bid after having won 24,9% of the company because it found itself drowning in debt with the weight of plunging commodity prices making it hard to breathe.

Another company that had to back off a merger was BHP Billiton, headed by SA-born Marius Kloppers. The company had spent $450m on trying to take over lesser rival Rio Tinto. But when the world's economy went into a tailspin, it was forced to reassess its position. The $40bn debt sitting on Rio Tinto's books incurred from its takeover of Alcan changed BHP Billiton's plans.

The ferrochrome industry is also in tatters. A freeze in demand from China and Europe for stainless steel has led to the local sector all but shutting shop until appetite returns.

The Merafe/Xstrata joint venture has closed 17 of its 20 furnaces. Hernic Ferrochrome and London-listed International Ferro Metals have had to take similar measures. Samancor Chrome, which is the world's second-biggest after Xstrata, has ceased production completely. SA holds around 70% of the world's known chrome resources, and accounts for more than half of global ferrochrome exports. Though retrenchments have not been significant in the ferrochrome industry so far, if prices and demand remain suppressed, thousands of jobs could be on the line.

The diamond mining sector has also cracked under the weight of the global recession. Companies such as De Beers have had to scale back production on a large scale and embark on retrenchments at some of its SA operations. Smaller competitors that mine alluvial stones in the Northern Cape have suffered even worse.

BRC DiamondCore, laden with debt, has been forced to shut all of its SA mines and retrench its entire workforce. If that's not enough, directors have had to make cash advances to the company so it can pay critical near-term creditors.

Trans Hex is also struggling. CEO Llewellyn Delport was clearly rattled when delivering the JSE-listed company's results in November. Since then, conditions in the diamond market deteriorated even further.

Smaller producer Kimberley Consolidated Mining has had to cut back production, and has even had to resort to selling its equipment to generate cash flow. Rockwell Diamond has retrenched a third of its workforce and slashed production too.

Manganese producers in the Northern Cape, which include a BHP Billiton and Anglo American joint venture, and the Assmang partnership between Assore and African Rainbow Minerals, are also under pressure. Government-owned Transnet says rail volumes for manganese products were down by about 50% as demand dwindled.

Iron-ore producers have proven more resilient. Kumba Iron Ore (KIO) benefited from a near-100% price increase in 2008, accompanied by surging demand. Though analysts are predicting a 30% reduction in iron-ore contract prices for this year, KIO has not had to retrench workers or implement big production cuts. Even at a reduced price, Africa's biggest iron-ore producer is making handsome profits.

Exxaro Resources, which owns a fifth of KIO, also watched the money pour into its bank account in 2008 as Eskom bought up millions of tons of coal it needed to build stockpiles at its power stations that had diminished to dangerously low levels. As Eskom's biggest coal supplier, Exxaro was happy to make additional coal available at a price higher than the long-term contracts it has with the power producer.

Exxaro, however, is not altogether shielded from the global crisis. A significant portion of its earnings come from coal exports, and the export price has fallen by more than 50%. Income will continue to flow steadily from Eskom, but this will be affected by a drop in export earnings.

The one commodity sector that stood out extraordinarily well, while others buckled, was gold. Industrial commodities and other metals shed up to 70% of their highs in the months after September. Gold, on the other hand, managed to scale $1 000/oz for the second time since March. Investors, who have been watching in horror as equity markets gave up 25% of their value, see gold as a safe place to put their money to prevent further capital losses.

SA producers of the yellow metal, who have been out of favour for the past few years as production and profits failed to impress, rubbed their hands with glee. They enjoyed the double bonus of a tumbling rand - which at one stage eyed R12 - as most of their costs are in rand while they get paid for their product in US dollars. The stocks of Gold Fields, Harmony and AngloGold all shone in the dark sea that was general mining equities.

The gold industry has also made big strides on the safety front, which has been dogging it for decades. For the first time since its formation, AngloGold managed to go a quarter without a single fatality. Gold Fields also managed to reduce deaths in its mines after nine workers died on May 1 - the day Nick Holland took over as CEO.

Safety has become important to earnings, as the department of minerals & energy embarked on an aggressive campaign of temporarily closing shafts after fatalities. This strategy irked bosses in the beginning, but it has borne fruit, with a far sharper focus on safety coming from top management.

Overall, mining companies' 2008 financial performance was strong. But the 2008 financials are illusory. Mostly impressive earnings reflect the environment in the first half of the year, where inflated commodity prices made it almost impossible not to make a profit. Since the collapse came at the sector with full force only from the last quarter, the effect of this will be fully realised only when mining companies post results for the first and second quarters of 2009.

Though expansion and acquisitions were the order of the day in the run-up to the crisis, the sector is in a different space now. Retrenchments, capital expansion curtailment and aggressive cash preservation are the new priorities of this struggling sector. And there will be many more grey hairs sprouting out of bosses' scalps before any relief appears on the horizon.