Sigma Lithium Halts All Operations, Delays Guidance Amid Court Review

Updates

1. Oct 1, 10:36 AM ET · SEC 6-K — Sigma Lithium's 6-K confirms the temporary suspension of all mining and industrial production as of Sept. 30, and postpones its 12-month guidance of 240,000t by three months while maintaining FY27 guidance of 330,000t.

   • Suspension Reason — The suspension is due to an atypical 15-day delay by the Federal Court of Appeals in reviewing an 'Emergency Motion For Suspensive Relief'.
   • Recycling Operations — Recycling operations ensure 100% circularity of dry stacked tailings, selling high-purity lithium fines, self-funding the Company.
   • Regulatory Notification — Company received electronic notification from FEAM on September 29.
   • Economic Impact — The temporary suspension will generate significant negative economic impact across 12 municipalities in Vale do Jequitinhonha. Sigma Lithium contributed to creation of 19,000 direct and indirect job positions, benefiting approximately 80,000 people across 12 municipalities.
   • Legal Challenge — The Company challenged a 'Preliminary Federal Ruling' from a local Federal Court in the 'Ngolo Lawsuit' over environmental licenses. The NGO lawsuit requests suspending environmental licenses, breaching terms of a 'TAC Agreement'.
   • Company Defense
     • Company's defense: distance to Quilombolas' houses is further than legal limits, causing no adverse impacts.
     • Grota do Cirilo complex falls outside Quilombo and legal environmental impact distance.
     • Company caused no negative impact on Quilombola community; no quantitative measurements in Ngolo Lawsuit.
     • Environmental licenses are 'Vested Rights' protected by LINDB Article 24 and INCRA Normative Instruction 111/2021 Article 35.
     • Government registry showed no Quilombola community within Grota do Cirilo when licenses were issued.
     • Environmental licenses issued and/or deliberated by the State of Minas Gerais between May 2019 and April 2023, predating the RTID self-issued by the expert hired by the Quilombola.
     • License issuances did not trigger the INCRA framework because Quilombola community authorization was legally required only after official recognition through a published RTID, per Interministerial Ordinance No. 60/2015 and INCRA Normative Instruction No. 111/2021.
     • Quilombo houses are located on the opposite bank of the Jequitinhonha River, approximately 11 km from the Barreiro Pit and 8 to 9 km from the Xuxa Pits.
     • The 2.7 km distance claimed by the Ngolo Lawsuit stems from the self-proclaimed RTID perimeter containing an anomalous measurement 30x larger than the original baseline, allocating a very large farm of 1.5 km2 for each alleged Quilombola family.
     • FPIC (Free, Prior and Informed Consultation and Consent of the UN-ILO Convention 169) was not triggered because the RTID did not exist at the time.
     • Barreiro Pit permit rests on an additional specific assessment requested by FEAM, supported by a favorable technical opinion from SEDESE, subject to dedicated community-specific conditions (condicionante).
     • Barreiro Pit environmental license was unanimously approved by the CMI/COPAM.
   • RTID Timeline — RTID self-proclaimed public notices for the Baú Community were published on November 24 and 27, 2023.
   • Court Ruling Circumstances — The Preliminary Federal Ruling was issued by a federal judge acting on weekend duty, when appeals courts were closed during a holiday weekend.
   All 25 details

   • Suspension due to atypical 15-day delay by Federal Court of Appeals in reviewing 'Emergency Motion For Suspensive Relief'.
   • Recycling operations ensure 100% circularity of dry stacked tailings, selling high-purity lithium fines, self-funding Company.
   • Company received electronic notification from FEAM on September 29.
   • Temporary suspension will generate significant negative economic impact across 12 municipalities in Vale do Jequitinhonha.
   • Company challenged 'Preliminary Federal Ruling' from local Federal Court in 'Ngolo Lawsuit' over environmental licenses.
   • NGO lawsuit requests suspending environmental licenses, breaching terms of a 'TAC Agreement'.
   • Company's defense: distance to Quilombolas' houses is further than legal limits, causing no adverse impacts.
   • NGO lawsuit filed against State Government of Minas Gerais, FEAM, and INCRA, besides Sigma Brazil.
   • 'Preliminary Federal Ruling' violated Sigma Lithium’s constitutional right to legal defense; no communication for a week.
   • 'Preliminary Federal Ruling' issued as 'emergency ruling' by weekend judge without technical evidence of imminent impacts.
   • Grota do Cirilo complex falls outside Quilombo and legal environmental impact distance.
   • Company caused no negative impact on Quilombola community; no quantitative measurements in Ngolo Lawsuit.
   • Request for independent expert technical evidence on Quilombo impacts denied by Federal Court in Teofilo Otoni.
   • Environmental licenses are 'Vested Rights' protected by LINDB Article 24 and INCRA Normative Instruction 111/2021 Article 35.
   • Government registry showed no Quilombola community within Grota do Cirilo when licenses were issued.
   • Environmental licenses issued and/or deliberated by the State of Minas Gerais between May 2019 and April 2023, predating the RTID self-issued by the expert hired by the Quilombola.
   • RTID self-proclaimed public notices for the Baú Community were published on November 24 and 27, 2023.
   • License issuances did not trigger the INCRA framework because Quilombola community authorization was legally required only after official recognition through a published RTID, per Interministerial Ordinance No. 60/2015 and INCRA Normative Instruction No. 111/2021.
   • Quilombo houses are located on the opposite bank of the Jequitinhonha River, approximately 11 km from the Barreiro Pit and 8 to 9 km from the Xuxa Pits.
   • The 2.7 km distance claimed by the Ngolo Lawsuit stems from the self-proclaimed RTID perimeter containing an anomalous measurement 30x larger than the original baseline, allocating a very large farm of 1.5 km2 for each alleged Quilombola family.
   • FPIC (Free, Prior and Informed Consultation and Consent of the UN-ILO Convention 169) was not triggered because the RTID did not exist at the time.
   • Barreiro Pit permit rests on an additional specific assessment requested by FEAM, supported by a favorable technical opinion from SEDESE, subject to dedicated community-specific conditions (condicionante).
   • Barreiro Pit environmental license was unanimously approved by the CMI/COPAM.
   • Sigma Lithium contributed to creation of 19,000 direct and indirect job positions, benefiting approximately 80,000 people across 12 municipalities.
   • Preliminary Federal Ruling was issued by a federal judge acting on weekend duty, when appeals courts were closed during a holiday weekend.