Brazil state authority suspends Sigma Lithium's environmental licenses

The environmental foundation of Brazil's Minas Gerais state (Feam) ordered immediate suspension Sept. 24 of lithium producer Sigma Lithium Corp's five main environmental licenses, legally halting virtually all operations at Brazil's largest lithium producer, a Feam spokesperson told S&P Global Energy Sept. 25.

The suspension, published in the Sept. 24 edition of Minas Gerais' official gazette, was decreed due to the TSX-listed miner's apparent non-compliance with a Brazilian federal court ruling of Sept. 4 to respect the needs of a community of African slave descendants, or quilombola, whose territories are typically protected under Brazilian law, according to Feam. The community in question is within the direct area of influence of Sigma's mine operations, according to Feam.

The licenses suspended by Feam cover Sigma's initial environmental licenses, installation and operational licenses at surface and underground mining operations (except for iron ore and tailings dams operations) and other operational licenses at its Cirilo, Itinga e Araçuaí, Xuxa, Cava Norte, Cava Sul and Barreiro mine areas, and mineral processing plants, according to Feam's publication in the official gazette. The prohibition on operations extends to upstream suppliers including of fuels and downstream sales points, according to the official publication.

Sigma Lithium acknowledged an email sent by S&P Global Energy early on Sept. 25, requesting information on the current situation, but did not immediately confirm whether it was still producing or if it would appeal the latest legal ruling.

Feam said in its emailed note it would like to reinforce that it is carrying out regular checks on the site to attest to Sigma's compliance with legal decisions made.

According to local press reports Sept. 25, the state's social and environmental authorities have requested the assistance of the military police to ensure that night-time mining activities do not occur at Sigma's site.

This is the latest in a string of legal tussles between Sigma and state and federal level courts over environmental issues, ever since the company started commercial production in 2023. In one court ruling, the company, which describes its main product as "green lithium", was prohibited from describing itself as "green" in public events.

Sigma Lithium currently has a nameplate capacity to produce 270,000 metric tons of lithium oxide concentrate on an annualized basis (approximately 38,000-40,000 mt lithium carbonate equivalent) at its mine and Greentech Industrial Plant in Minas Gerais state. The product is mainly for export.

The company is working on a Phase 2 expansion and hopes to also achieve a Phase 3 expansion designed to raise annual production capacity to 520,000 mt and 770,000 mt respectively.