Anglo American spinoff tackles toxic coal spill after government order

Thungela Resources Ltd. is working to remedy the impact of a toxic spill in February from an old coal mine in South Africa’s eastern Mpumalanga province, Chief Executive Officer July Ndlovu said.

Documents released by a shareholder activist organization on Tuesday show that Thungela — a coal spinoff from Anglo American Plc — has been ordered to repair the environmental damage or face legal action. Thungela fell as much as 11% in Johannesburg.

In February, the company said the spill, from a site last operational more than 50 years ago, occurred after the failure of a concrete seal. Farmers in the area couldn’t irrigate their crops and thousands of fish died due to the spill, according to Beeld newspaper, which first reported the incident.

Thungela is aware of reports of a criminal investigation but has not been charged, the CEO said at the company’s annual general meeting on Tuesday. The company was ordered by South Africa’s Department of Water and Sanitation to rectify the situation and told that it could face legal action if it failed to do so in a directive issued on Feb. 21.

“The fish kill observed at Wilgerivier along the Wilgerivier Lodge and Meulstroom Lodge may be because of pollution of the water resource,” the department said in the directive, which was obtained by Just Share NPC through a Promotion of Access to Information Act. “Should you fail to comply or comply inadequately with this directive, legal action may be taken against you.”

Thungela traded 4.9% down at 248.95 rand as of 1:56 p.m in Johannesburg. South Africa’s largest shipper of thermal coal has surged about 10-fold since its spinoff from Anglo American last June.

The failure of the concrete seal was due to vandalism, according to the documents obtained by Just Share.

(By Antony Sguazzin and Felix Njini)