Svalbard is an arctic archipelago where coal mining generates all electricity via the local coal-fired power station. Coal combustion produces a waste product in the form of particulate matter (PM) coal fly ash (CFA), derived from incombustible minerals present in the feed coal. PM ≤10 µm (diameter) may be “inhaled” into the human respiratory system, and particles ≤2.5 µm may enter the distal alveoli to disrupt normal pulmonary functions and trigger disease pathways. This study discovered that Svalbard CFA contained unusually high levels of iron-rich magnetic minerals that induced adverse effects upon human lungs cells. Iron is a well-characterised driver of reactive oxygen species (ROS) generation, a driving force for cell death and disease. CFA physicochemical characterisation showed non-uniform particle morphologies indicative of coal burnt at inefficient combustion temperatures. The bioreactivity (ROS generation) of PM2.5/10 fractions was measured using plasmid scission assay (PSA, DNA damage) and haemolysis assays (erythrocyte lysis), with PM2.5 CFA showing significant bioreactivity. CFA leached in mild acid caused a significant increase in toxicity, which could occur in CFA waste-stores. The CFA and leachates were exposed to a surrogate model of human bronchial epithelia that confirmed that CFA induced apoptosis in bronchial cells. This study shows that CFA containing magnetic iron-rich minerals mediated adverse reactions in the human lung, and thus CFA should be considered to be an environmental inhalation hazard.