Sigma Lithium’s Brazil Operation Reportedly Suspended as Environmental Scrutiny Intensifies

Sigma Lithium’s Grota do Cirilo project in Minas Gerais, Brazil — one of the world’s largest hard-rock lithium deposits — has reportedly been offline for more than 10 consecutive days, according to market sources. While the information has not been officially confirmed by the company, it aligns with recent regulatory developments.

On July 22, Sigma announced that it was negotiating a Conduct Adjustment Agreement (TAC) with the Minas Gerais state government in response to a penalty notice issued by the regional environmental authority, SUPRAM. The company expects to pay fines of up to approximately US$540,000 and invest around US$1 million in remediation measures to restore activities currently described as “partially and temporarily suspended”. The penalties relate to environmental issues that occurred between 2013 and 2022. The State Foundation for the Environment (FEAM) ordered the embargo after an inspection in late May identified environmental infractions. The company was formally notified on July 13.

The waste-rock piles at Grota do Cirilo have previously been subject to repeated reviews by Brazilian labour and environmental authorities. Although Brazil’s National Mining Agency concluded that the relevant piles did not present an imminent geotechnical risk, the restrictions imposed by labour authorities were not automatically lifted. A May inspection reportedly found that the project was continuing to use one of the restricted waste piles. In January 2026, labour authorities had already ordered Sigma to stop using three waste-rock piles at the site. Brazil’s State Secretariat for Environment and Sustainable Development also suspended the company’s licences related to extraction activities, citing potential impacts on watercourses in preservation areas, irregular vegetation clearing, groundwater use and the start of exploration before licence dates.

Sigma produced 35,000 tonnes of lithium concentrate in the second quarter, above its previous target of 33,000 tonnes. However, that figure reflects operating conditions before the formal regulatory notice was delivered and does not represent the project’s third-quarter operating status. The key issue affecting Sigma’s supply outlook is no longer the size of the fine, but the timing of the TAC agreement, the scope of the operational suspension and the regulatory inspection process required before production can resume. The embargo will remain in effect until the company demonstrates the adoption of necessary measures or signs a TAC. Investors should closely monitor third-quarter production performance at Grota do Cirilo, as well as progress toward the scheduled commissioning of the project’s Phase 2 expansion. Sigma has firmly denied any irregularity and has submitted substantial factual and quantitative environmental evidence to FEAM as part of its defence.