According to market sources, Sigma Lithium’s Grota do Cirilo project in Minas Gerais, Brazil, has reportedly been offline for more than 10 consecutive days. The information has not yet been officially confirmed by Sigma, but it is broadly consistent with recent regulatory developments.
On 22 July, Sigma announced that it was negotiating a Conduct Adjustment Agreement, or 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 that are currently described as “partially and temporarily suspended.”
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 had concluded that the relevant waste piles did not present an imminent geotechnical risk, the restrictions imposed by the labour authorities were not automatically lifted. A May inspection reportedly found that the project was continuing to use one of the restricted waste piles.
Sigma produced 35,000 tonnes of lithium concentrate in the second quarter, above its previous target of 33,000 tonnes. However, this production figure reflects operating conditions before the formal regulatory notice was delivered and therefore 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. Market participants should closely monitor the actual third-quarter production performance at Grota do Cirilo, as well as progress towards the scheduled commissioning of the project’s Phase 2 expansion.
