A Brazilian Federal Court ordered the immediate suspension of environmental licenses and mining operations at the Grota do Cirilo complex, operated by Sigma Lithium in the municipalities of Itinga and Araçuaí, in the Jequitinhonha Valley of Minas Gerais. The preliminary injunction responds to a civil lawsuit filed by the Federation of Quilombola Communities of Minas Gerais, according to a report by G1 on Tuesday (8).
The local federation alleges that the company submitted inaccurate environmental impact studies and omitted mandatory prior consultations with the traditional quilombola communities of Baú, Genipapo Pintos, and Jenipapo II. While Sigma stated in court filings that the settlements lie outside the mandatory eight-kilometer consultation radius, official data from the National Institute for Colonization and Agrarian Reform (Incra) shows that the Baú community is located approximately 2.3 kilometers from the direct extraction zone. The court imposed a fine of 100,000 reais for non-compliance and ordered an independent technical survey to verify exact distances.
The federal ruling deepens regulatory hurdles for Brazil's largest lithium producer. In July, the Minas Gerais State Secretariat for Environment and Sustainable Development (Semad) halted operations at the company's North and South pits following inspections that found damage to waterways, unauthorized vegetation clearing, and irregular groundwater extraction. Court records cited by G1 indicate that Sigma has accumulated 2 million reais in state fines since commercial operations began in 2023. The federal judge also barred state authorities from signing any conduct adjustment agreement (TAC) with the miner until the case is resolved.
The shutdown interrupts output at the core of Brazil's energy transition supply chain in the Jequitinhonha Valley. Sigma extracts and processes high-purity spodumene concentrate destined for export and electric vehicle battery refining. For the mining company and its investors, the injunction halts cash flow and increases delivery risks on international contracts. For automotive manufacturers and battery makers downstream, the ruling highlights raw material supply vulnerability and legal risks surrounding extraction projects near traditional territories.