A Brazilian federal court on Friday (September 4) ordered the suspension of all environmental licenses held by Sigma Mineração, the operating subsidiary of Sigma Lithium Corp., and the full halt of mining at the Grota do Cirilo lithium project in Araçuaí and Itinga, in the Jequitinhonha Valley of Minas Gerais state. Judge Antonio Lucio Tulio de Oliveira Barbosa, of the Federal Regional Court of the 6th Region (TRF-6), the federal appeals court that covers Minas Gerais, granted the emergency injunction at the request of the Federation of Quilombola Communities of the State of Minas Gerais, known as N'Golo.
Beyond stopping the extraction, the order immediately suspends the effects of every license issued to the company and bars the Minas Gerais government from issuing any conclusive technical opinion or new environmental license, "including additions, expansions or corrective licenses", for the complex. According to the local news site O Fator, the ruling in practice suspends the conduct adjustment agreement (TAC) signed between the state government and the company at the end of August.
The order stands until Sigma produces, and the federal land agency Incra approves, a dedicated Quilombola Component Study (ECQ), a Quilombola Environmental Basic Project (PBAQ) and a Final Execution Report (REF). The company must also hold a free, prior and informed consultation with the Quilombola Community of Baú, in Araçuaí. Quilombolas are traditional Afro-Brazilian communities descended from people who escaped slavery, and their territories carry special protection under Brazilian law. The lawsuit was filed by N'Golo in May, asking for the licenses to be annulled until the consultation takes place.
According to Folha de S.Paulo, which published a Bloomberg report, the federation argues that the miner overstated the distance between the project and the traditional territory. The decision holds that the mine sits within the community's direct area of influence and therefore requires impact studies dedicated to quilombola communities. Sigma told the court, as recorded in the ruling, that the project lies outside the presumed 8-kilometer impact zone, defended the legality of the state licensing and argued that the absence of definitive property titles blocks the application of the protection procedure.
"The risk of damage stems from the fact that the mining complex operates continuously, extracting resources and carrying out constant blasting and earthmoving a few kilometers from the traditional territory."
the judge wrote, to justify the urgency of the measure.
Timeline of the dispute
In late May, inspectors from the state environmental foundation Feam visited the complex and recorded interventions in four watercourses and their permanent preservation areas, illegal vegetation clearing and illegal groundwater extraction, according to a 73-page technical opinion obtained by O Fator. Based on satellite imagery, the agency also concluded that ore extraction in the North and South pits had begun before the state environmental council Copam issued the license. In July, Feam suspended operating licenses 4078/2022 and 144/2023, covering the two pits, and the company had to stop production. Sigma denied any irregularity.
At the end of August, the miner signed a TAC with the Minas Gerais government and said it was authorized to resume operations. N'Golo had already asked the court, in the same May lawsuit, to halt the negotiations around that agreement. Friday's injunction suspends both the effects of the licenses and the TAC until the quilombola requirements are met.
Impact and next steps
Grota do Cirilo lies in the area known as Brazil's Lithium Valley, and Folha describes it as one of the world's largest hard-rock lithium deposits, with an adjacent processing plant. O Fator calls Sigma the country's largest lithium miner and reported that the July embargo cooled talks on a loan of nearly 500 million reais from the state development bank BNDES.
Feam and Sigma did not reply to O Fator before publication on whether they will appeal. The injunction sets no dates: the suspension remains in force until Incra approves the studies and the consultation with the Quilombola Community of Baú is held, and the parties may challenge the measure within the same federal case.