Methane (CH4) emissions are a factor in climate change; in addition, CH4 production may affect reclamation of fluid fine tailings (FFT) in tailings ponds, and end-pit lakes (EPLs). In laboratory cultures, we investigated the effect of crystalline iron mineral (magnetite) on CH4 production from the biodegradation of hydrocarbons added to FFT collected from methanogenically more and less active sites in a demonstration EPL. Magnetite enhanced CH4 production from both sites, having a greater effect in more active FFT, where it increased the CH4 production rate as much as 48% (from 6.67 μmol d−1 to 9.87 μmol d−1) compared to FFT without magnetite. Correspondingly, magnetite hastened biodegradation of hydrocarbons (monoaromatics, n-alkanes and iso-alkanes), with a pronounced effect on o-xylene, ethylbenzene, m/p-xylenes, n-octane, n-nonane, and 2-methyloctane, where biodegradation rates increased by 46, 117, 11, 45, 28 and 37%, respectively, compared to FFT without magnetite. Little FeII was produced, suggesting that magnetite is not being used as an electron acceptor but rather functions as a conduit for electron transfer. Thus, magnetite may be a suitable amendment to enhance bioremediation of anaerobic environments contaminated with hydrocarbons. Importantly, our observations imply that magnetite may increase CH4 emissions from terrestrial ecosystems, thus affecting carbon budget estimations.