In the 18th century, France's King Louis XV declared platinum to be the only metal fit for a king - because of its rarity. But producers of the white metal have been reduced to paupers after its price, early this year, dipped below that of gold for the first time in more than a decade.

In fact, there is hardly a metal that epitomised the commodities bull run and sudden crash as strikingly as platinum did. In March last year, the metal scaled US$2 340/oz on the back of supply fears because of the Eskom-induced power crisis. It then crashed like a meteorite through the atmosphere, cutting a swathe through employment as it fell.

Platinum's main destination is autocatalysts. These devices are used to reduce pollution from diesel engines. The biggest market for diesel vehicles is Europe, which has been crushed by the global economic crisis. Sales of passenger vehicles in Eastern Europe dropped by 7,8% in 2008 - the sharpest decline since 1993.

And though demand and prices dived, companies such as the world's biggest platinum producer, Anglo Platinum (AngloPlat), have been left to suffer the enduring hangover of high costs incurred during the bull years - one that takes more than a Panado and a Red Bull to cure. For AngloPlat the remedy has been a far more bitter pill to swallow.

This has come in the form of 10 000 retrenchments, to keep cash flows on some sort of sustainable level. AngloPlat mustered an 8% increase in headline earnings for the year ended December 2008 (R13,3bn), but this was thanks to the buoyant metal prices in the first half of the year. Lonmin, AngloPlat's smaller peer, has also had to lay off thousands of workers to try to bring costs closer to the platinum price. Both Lonmin and AngloPlat were also compelled to cut capital expenditure. Lonmin had other issues to worry about. Just as the world was speeding towards the worst economic crisis since the Great Depression, diversified miner Xstrata announced its latest acquisition target in a string of buyouts.

Mick Davis had Lonmin in his sights, and was offering £5bn in cash for the company in a hostile takeover bid. As is the case with most hostile bids, Lonmin's board was not impressed. Then CEO Brad Mills and chairman Sir John Craven, under whose leadership the miner consistently missed production targets, dismissed the bid as too low.

At that point, Lonmin's share price jumped to just more than R500/share - about the same price Xstrata offered. The company subsequently sank to R85,25 by December, after Xstrata announced it had decided not to proceed with the buyout because of its excessive debt position and constrained cash flows in a low commodity price environment.

Before it backed off, Xstrata had 24,9% of Lonmin's stock under its belt, leading analysts to expect it may yet make a move on the LSE- and JSE-listed company once its debt position improves and the global economy recovers.

Lonmin was not alone on the failed acquisition front. Impala Platinum (Implats) had targeted Mvelaphanda Resources, which owns Northam Platinum. Northam has an operating platinum mine near Thabazimbi, the deepest in the world, and the prized Booysendal resource that is yet to be developed.

Announcing cash and share buyout talks in October, Impala said it hoped to create an "SA-owned platinum champion". But its plans were also cut short by the global crisis, when it said the companies weren't able to see eye-to-eye over the price Implats would pay. Since then, Mvela Resources has said it will sell its stake in Gold Fields and use the proceeds to fund Booysendal's development and it will unbundle its Northam shares to shareholders.

Impala, the second-biggest miner of the metal, fared better, however, when compared with its peers. Among the top three it stands alone, having not embarked on mass retrenchments. But it has had to cut capital expenditure by R10bn to R13bn for the next four years.

Perhaps the biggest casualties have been the platinum hopefuls that are not yet producing - and they have to incur huge costs to build their mines. Lesego Platinum and Platfields are both in this boat. These companies had planned to list on the JSE before 2008 was through to raise the money they needed, but market conditions wouldn't hear any of it. Ridge Mining is also in need of a capital injection. Drilling programmes for feasibility study purposes have thus slowed to snail's pace or have ceased altogether.

Platinum companies have put their hope in demand from the Chinese jewellery market and European governments' "cash for clunkers" incentives for citizens to buy new vehicles. Investment demand, in the form of exchange-traded funds, may also contribute to a stabilised (or even rising) platinum price. Jewellery demand for platinum generally strengthens when higher gold prices make the yellow metal unattractive.

The power crisis that was a major contributor to the platinum price spike in early 2008 has subsided somewhat. SA's mining industry - one of the heaviest power users in the country - has reduced activity significantly because of across-the-board price and demand reductions. Though government still wants mining companies to use 5% less power than they did by the end of 2007, the risk of load shedding has disappeared for now. Here, the global downturn has been a blessing in disguise.

Another problem that has been dogging the SA platinum industry - which accounts for about 80% of world supplies - is safety. Towards the end of 2007 government embarked on a strategy of systematically closing down mines every time a fatality occurred. The minerals & energy department enforced the so-called section 54 with a vengeance. Shutdowns last as long as a week, and cumulatively dig deep into profits. The safety expectations of Anglo American CEO Cynthia Carroll were behind AngloPlat CEO Ralph Havenstein's departure in 2007.

There has been an improvement in SA mining safety - with about 25% fewer deaths in 2008 than the previous year, but it is a problem that is still dogging the industry.