Sigma Lithium (TSXV: SGML) has been ordered to stop mining at Grota do Cirilo after a Brazilian judge suspended the environmental licences underpinning the operation, sidelining the company’s sole revenue-generating asset while the courts sort out a dispute over a map.
The injunction, issued Friday by Judge Antonio Lucio Tulio de Oliveira Barbosa, came in a civil suit brought by the Federation of Quilombola Communities of Minas Gerais. At issue is the Bau community, a settlement of African descent whose lands carry heightened legal protection under Brazilian law, including a right to be consulted before a project moves in next door.
The judge found sufficient evidence that Bau territory sits inside the project’s area of influence. Studies cited in the decision place the community roughly 2.7 kilometres from the directly affected area, comfortably inside the 8-kilometre threshold that triggers formal consultation and community-specific impact studies. Sigma has argued the opposite, maintaining the mine falls outside that radius and pointing to unsettled land titles around the community.
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The order goes further than a pause on digging. It freezes the environmental permits held by Sigma Mineracao, bars Minas Gerais state regulators from issuing new ones, and attaches financial penalties if work continues anyway.
Getting back to work runs through an independent georeferencing review the court has ordered to establish, definitively, how far the mine actually is from Bau. Should the distance fall inside the threshold, Sigma would need to complete the tailored impact studies and consultation process before the state can restore its licences. The company has said it intends to appeal, a route that has worked before.
A May ruling requiring a $10 million guarantee was overturned on appeal, and a July embargo by state inspectors over separate infractions was lifted last month. This is the third interruption at Grota do Cirilo in four months.
The mine has nameplate capacity of 330,000 tonnes of lithium oxide concentrate a year and accounted for roughly 60% of Brazil’s lithium output in 2025, making the stoppage more than a local inconvenience.
