The benchmark S&P-ASX 200 dropped as low as 3340.8 points within the first 90 minutes of trade but has clawed back some ground to 3404.2 points by midday.
The falls came as Wall Street closed down 5% in the United States while the Dow Jones Industrial index went under 8000 points for the first time in five years.
Also driving mining stocks lower was another nasty night on the London Metal Exchange which saw spot copper down 4% to $US3541/t, spot nickel down 4.7% to $10,113 and spot zinc down 3.8% to $1172/5/t.
Added to the flood of negative economic news from around the world and domestically, the fall in metals sent miners spiralling - again.
Rio Tinto fell to a low of $59.16, a $6.74 drop or more than a 10% plummet. BHP Billiton was down more than 6% and was last trading at $21.84 after falling as low as $21.11.
Both stocks are trading at their lowest points in four years.
Other recent targets of the market's ire, OZ Minerals and Fortescue Metals Group, were also battered - OZ was down 11% or 7.5c to 63c after touching 52c, while FMG was at $1.275, an 8c or 5.9% drop, after sinking as low as $1.16.
