A force majeure declared by Sasol on its cyanide contracts late last year has put South African gold miners in hot water in recent months, says Harmony Gold.
An industry-wide shortage of the chemical, caused by a plant breakdown that prevented Sasol from fulfilling its contractual obligations, dealt a blow to Harmony’s operational performance in the first half.
Amid heightened geopolitical uncertainty and record gold demand, operational disruptions impose big opportunity costs on gold miners. The gold price rose more than 30% in the six months to end-December.
Harmony, the country’s biggest gold producer by volume, reported a 9% slip in output during the period under review, compared with the second half of 2024.
Not all of the decline could be blamed on the sector’s cyanide woes, the company said, with a mill motor failure and shipping delays in Hidden Valley, its open-pit Papua New Guinea project, also playing a role.
Still, Harmony CEO Beyers Nel told Business Day the effect was significant, with the disruption likely to reflect in other gold miners’ results as well.
“We received a force majeure on sodium cyanide supply in South Africa, but it wasn’t just Harmony; it was industry-wide,” Nel said.
The biggest effect of the shortage was felt in the group’s surface production, “which is quite significant”, said Nel: “Those operations use a lot of cyanide because we treat such a high volume of ore.”
Mine Waste Solutions, acquired by Harmony in 2020, is a huge retreatment operation that extracts leftover gold from old tailings facilities scattered across the Vaal River and Stilfontein areas, producing about 100,000oz of gold a year.
“If you don’t have cyanide, you basically can’t get the gold particles out of the slurry, so we had some lower recoveries,” said Nel.
He said the cyanide supply is now fully resolved, with current deliveries arriving as planned. With the operational disruptions in Papua New Guinea also temporary, the group maintained full-year production, cost and grade guidance across its operations.
“But we are building some redundancy in with cyanide solution facilities so we can dissolve cyanide in solid form [in the future],” he said.
This will give Harmony “a better buffer, should we have any supply chain disruption again”, said Nel.
Sasol is South Africa’s only producer of cyanide, a chemical critical to the extraction of precious metals, including silver and gold.
The petrochemical giant said in late February force majeure was declared in November after a breakdown in its ammonia plant had a knock-on effect on feedstock (ammonia) for cyanide production.
Amid mounting supply concerns, DRDGold CEO Niël Pretorius has proposed that a consortium of local gold producers buy the plant from Sasol and appoint a chemicals company to run it.
In the group’s latest results, he spoke of the “essential” role of cyanide in gold production, saying that a long-term, sustainable remedy for the gold industry to the long-standing bigger supply problem was imperative.
Notably, Sasol has tried (and failed) to dispose of its cyanide business in recent years.
In 2023, it tried to sell the unit to the Czech Republic’s Draslovka, but the Competition Commission blocked the deal after authorities ruled the merger would have a “substantial negative effect on the public interest given its effects on the South African gold mining sector”.
Sasol told Business Day that “demand for sodium cyanide in South Africa far exceeds available supply, notwithstanding engaging customers on alternative supply solutions.
“Force majeure was declared in November 2025 following a breakdown on the ammonia plant thus impacting feedstock (ammonia) for cyanide production. Sasol regularly engaged customers on this matter to ensure transparency,” it said.
This article has been updated to include Sasol’s comment.
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