South Africa's gold industry faces sodium cyanide shortage - DRDGold

Just as South Africa’s gold industry is benefiting from the highest gold prices in history, the sector has been struck by a critical shortage of sodium cyanide, which is the key chemical used to dissolve the yellow metal from the ore.

“A critical shortage, made apparent to the South African gold-producing industry towards the end of the 2025 calendar year, followed Sasol’s declaration of force majeure, which temporarily disrupted supply from the industry’s sole sodium cyanide producer,” Niël Pretorius, CEO of DRD Gold said at the release of their interim results Wednesday.

According to an online search, Sasol stopped producing sodium cyanide as part of a strategic exit from that business, when, in October 2023, the Competition Tribunal blocked the sale of Sasol’s sodium cyanide unit to Draslovka Holding, a Czech-based chemicals group. Sodium cyanide supply has also become constrained globally because the high gold price has resulted in an explosion of gold exploration and development.

Pretorius said their operational management team had realised the risk of a potential shortage and had both stockpiled cyanide briquettes and built a dissolution plant at Ergo, for the solubilisation of briquettes - South Africa’s gold miners typically use liquid sodium cyanide, while briquettes can be imported.

“This meant production at our operations was not affected by this interruption in supply. A long-term, sustainable remedy for the gold industry's long-standing supply problems is now imperative. In this regard, we are engaging with our gold-producing peers,” Pretorius said. Questions to Sasol by BR were not responded to at the time of going to press.

The high gold price resulted in DRD Gold, which extracts gold from mine dumps, tailings dams and other surface deposits left begging by historic mining companies, lifting its dividend for the six months to December 31, 2025, to 50 cents a share from 30 cents at the same time last year.

DRD’s average gold price received had increased by 43% to R2 114 227/kg from R1 478 663/kg in the first half. This more than offset a 9% decline in production to 2 337 kilograms. Headline earnings increased by 98% to R223.2 million.

DRD sold 76 776 ounces of gold, generating revenue of R5.1bn, enabling DRD to fund the entire R1.65bn of capital reinvested during the period from operating cash flows, and added R428.2m to the cash position.

Pretorius said their operating performance in the first half was tracking their guidance to investors for the financial year at 75 136 ounces.

“Far West Gold Recoveries (FWGR) throughput remains steady, and Ergo Mining (Ergo) is operating at a reduced throughput rate during this transitionary phase while we work toward Vision 2028. Our Ergo team did well to manage the blend from 10 active reclamation sites to achieve the optimal throughput mix.”

He said a 23% reduction in electricity costs at Ergo was due to the contribution of the Ergo Solar Plant and Battery Energy Storage System (BESS) and Ergo’s electricity costs would have tracked the 12.74% Eskom increase, were it not for the BESS.

He said good progress continued to be made on the group’s Vision 2028 Big Five projects. At Ergo, construction of infrastructure at Ergo’s Brakpan plant and of the 21km dual pipeline linking the plant to the Daggafontein tailings storage facility (TSF) was nearing completion.

Preparation of the TSF continued on schedule. First deposition was anticipated in the first quarter of the financial year ending June 30, 2027.

At the FWGR, DP2 Plant expansion, a smelt house and elution facility were being commissioned.

On a project to link the DP2 Plant with the Regional Tailings Storage Facility (RTSF) and Libanon reclamation site, some 104 kilometres of the total 135 kilometre length had been installed by the end of the period.

For the RTSF itself, the current priority was the installation of a total of 3.4 million square metres of lining; by the end of the first half. Installation is lagging a little due to the impact of summer rains on what is, in effect, a massive construction site.

BUSINESS REPORT