The legal conflict originated from a civil lawsuit filed by N’Golo, the Federation of Quilombola Communities of Minas Gerais, arguing that Sigma proceeded with operations without proper free, prior and informed consultation with the Baú Quilombola community regarding environmental licenses for the Grota do Cirilo project. The federation claims the community’s territory sits approximately 2.7 kilometers from mining operations, within an 8-kilometer zone requiring consultation under Brazilian law. Sigma disputes this characterization, stating community homes are located 8 to 11 kilometers from operational pits and that environmental licenses were issued between May 2019 and April 2023, predating November 2023 federal notices defining the Quilombola territory’s proposed boundaries.
On October 1, the appeals court partially granted Sigma’s request, provisionally restoring three environmental licenses covering the North and South Pits and the Barreiro Pegmatite Project. However, authorization for expanding the North Pit ore processing unit from 1.5 million to 5.2 million tonnes of ore annually remains suspended, directly impacting expansion plans.
Sigma maintained its fiscal 2027 production guidance of 330,000 tonnes of lithium oxide concentrate but postponed its 12-month projection of 240,000 tonnes by three months. The company stated commercial operations and recycling activities would continue, including sales of high-purity lithium fines expected to generate cash flow during the suspension.
Separately, Brazil’s National Mining Agency ordered corrective work on a ruptured section of the north pit’s eastern slope, citing imminent geotechnical risk and requiring the area remain closed until repairs are completed. The company had reported 17 million dollars in cash and 125 million dollars in net debt as of June 30, with second-quarter production of 35,400 tonnes.
Sigma announced plans to resume Phase 2 expansion in 2027, designed to nearly double annual capacity to 580,000 tonnes, with Phase 3 targeting 830,000 tonnes. The execution timeline for these expansions now depends on resolving both environmental license disputes and regulatory safety requirements.
This article was curated and published as part of our South American energy market coverage.
