Short answer
Your first Dynamite is free: the bandits in the Forest hand it over at the end of the side quest Can't See The Forest for the Iron, which also reveals the hidden Dynamite technology (30 red, 30 green, after Battle Potions II). After that, craft it at the Formulation Bench from 2 Explosive Dust and 1 Alcohol. It opens the Old Mine and two Town projects — and no trader buys it.

Planning the crafting yard
View full-size image ↗Official promotional screenshot · © Lazy Bear Games / tinyBuild · Official media kit · Material credits
The free Dynamite
Can't See The Forest for the Iron comes from Sven, a Forest bandit, after Forest Pass.
Persuade Larry the skull to stand in for Robert the skeleton, give Larry 1 Simple Candle, then collect the explosives at the bandits' camp in the Forest.
Reward: 1 Dynamite, and the Dynamite technology appears in the tree. Use that stick on the blocked Old Mine entrance.
The Dynamite technology
It sits in column 8 of the Anatomy and Alchemy tree and costs 30 red and 30 green tech points.
It needs Battle Potions II first and stays hidden until the quest above reveals it.
It unlocks two things: the Dynamite recipe and the Explosive Dust alchemy formula.
Dynamite recipe
Formulation Bench: 2 Explosive Dust + 1 Alcohol → 1 Dynamite.
8 ticks at 2 energy per tick, Anatomy mastery 5. Each craft pays 1 red and 2 blue tech points.
The Alchemist perk gives a 50% chance of a bonus stick.
Getting the ingredients
Explosive Dust: brew any ingredients whose runes total exactly 2 red and 2 blue — Laboratory I is enough.
Alcohol: distil Wine, Beer, cider or Mead at the Distillation Cube, or buy it from the Apothecary from trader level 2.
What Dynamite is used for
Clearing the blocked entrance of the Old Mine in the Forest.
The Demolish the Wall restoration project and the Broken Wall repair in The Town — 1 each.
Studying one at the Study Table pays 50 red tech points.
It cannot be destroyed or sold — base price 9 silver, but no trader buys it — so craft only what you need.
Original diagram of the Old Mine line. The first Dynamite clears the blocked entrance.
View full-size image ↗Original diagram · Graveyard Keeper 2 Wiki · editorial illustration · Original wiki diagram
Sources
- communitywikily.gg — Dynamite (item)
- communitywikily.gg — Dynamite (technology)
- communitywikily.gg — Can't See The Forest for the Iron
- communitywikily.gg — Alcohol
- communitywikily.gg — Alchemy
Related pages
Official screenshot · © Lazy Bear Games / tinyBuildCraftingGraveyard Keeper 2 Explosive Dust
Official screenshot · © Lazy Bear Games / tinyBuildCraftingGraveyard Keeper 2 Mine: Old Mine, Dynamite & Zombie Miners
Official screenshot · © Lazy Bear Games / tinyBuildAutomationHow to Make Alcohol in Graveyard Keeper 2
Official screenshot · © Lazy Bear Games / tinyBuildCraftingGraveyard Keeper 2 Formulation Bench
Official screenshot · © Lazy Bear Games / tinyBuildAutomationGraveyard Keeper 2 Distillation Cube