Other possible sources are also being investigated as the cause of the spill, which is affecting marine and bird life, the eThekwini municipality said late on Friday, urging local residents not to use beaches in the area.
"Extensive environmental impacts are being reported at uMhlanga and uMdhloti lagoons and beaches in the vicinity, that have killed numerous species of marine and bird life," the municipality said in a statement.
"The pollution is considered serious and can affect one's health if species are collected and consumed. Lagoon and seawater contact must be avoided."
Reuters reporters saw dead fish that had washed onshore on Saturday, as a clean-up company worked to mop up the spill. KwaZulu-Natal province's head of environmental affairs, Ravi Pillay, said water samples would be tested on Monday.
"We will see the results from there," Pillay told Reuters. "We have some evidence of some limited impact on marine life. Our team is satisfied that there is no impact on public health."
President Cyril Ramaphosa said on Friday the unrest that ripped through several parts of the country in the past week was stabilising and calm had been restored to most affected areas.
Protests broke out after former President Jacob Zuma was jailed for failing to appear at a corruption inquiry and swiftly degenerated into looting and arson which has killed more than 200 people and destroyed hundreds of businesses.
The municipality also said some residents were reporting smoke residue from burned chemical products. It advised people to close windows and doors and put wet cloths over vents until the smoke cleared.
Pillay said air quality testing was being undertaken.
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