Thungela is dealing with a splash of toxic coal following a government order

Thungela Resources is working to offset the effects of a toxic spill from an old coal mine in the eastern African province of Mpumalanga in February, CEO Julio Endlovu said.

Documents released by a shareholder activist organization on Tuesday show that a coal spinoff from Thungela-Anglo-American PLC has been ordered to repair environmental damage or take legal action. Thungela fell 11% in Johannesburg.

In February, the company said the spill from a site it worked on more than 50 years ago, followed by a concrete seal failure. Farmers in the area have not been able to irrigate their crops and thousands of fish have died in the spill, according to the Bild newspaper, which first reported the incident.

At the company’s annual general meeting on Tuesday, the CEO said Thungela was aware of a criminal investigation report but had not been charged. The company was instructed by South Africa’s Department of Water and Sanitation to rectify the situation and said it could face legal action if it failed to do so in a directive issued on 21 February.

“The fish kills observed at Wilgerivier, along with Wilgerivier Lodge and Meulstroom Lodge, may be due to contamination of water resources,” the department said in the directive, which was obtained by Just Share NPC through the Access to Information Promotion Act. “Legal action may be taken against you if you fail or inadequately comply with these guidelines.”

Thungela traded down 4.9% at R248.95 in Johannesburg until 1:56 pm. South Africa’s largest ship of thermal coal has grown nearly 10 times since the spin-off from Anglo-American last June.

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

© 2022 Bloomberg

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