Brazil halts Sigma Lithium Grota do Cirilo mine

On Sept. 6, 2026, a Brazilian judge ordered the suspension of environmental licenses and mining activities at Sigma Lithium’s Grota do Cirilo mine. The ruling immediately halts operations at the project and applies to both existing environmental authorizations and any mining activity carried out under them.

The decision arose from a civil action brought by the Federation of Quilombola Communities of Minas Gerais. The federation argued that the Grota do Cirilo project falls within the direct area of influence of the Baú Quilombola community, a traditional Afro-Brazilian community, and therefore must comply with specific procedural safeguards.

Judge Antonio Lucio Tulio de Oliveira Barbosa found there was sufficient evidence at this stage that the Baú territory lies within the mine’s area of influence. He highlighted potential risk of harm from blasting and earthmoving activities associated with the project near the traditional territory.

In his ruling, the judge cited studies indicating that the Baú territory is about 2.7 km from the directly affected area of the Grota do Cirilo project. This distance falls within an 8 km regulatory threshold that triggers additional procedures, including free, prior and informed consultation with Quilombola communities.

To clarify the project’s exact spatial relationship to the Baú territory, the court ordered an independent georeferencing expert review. This expert assessment is intended to determine with precision the distance between the mining operations and the Quilombola land and will inform further judicial decisions in the case.

Until the expert review is completed and the court issues new directions, the suspension of licenses and mining activities remains in effect. The order is structured as a precautionary measure, focused on potential impacts within the defined influence radius.

The court’s decision also restricts the actions of public authorities in Minas Gerais. The ruling bars state bodies from granting any new environmental licenses related to the Grota do Cirilo project while the suspension is in force.

In addition, the judge established fines that would apply if Sigma Lithium continues mining operations despite the suspension. These penalties are designed to enforce compliance with the injunction and maintain the halt on activities until the legal and technical questions are resolved.

The combination of a licensing freeze and the threat of financial penalties places the project in a holding pattern. Any further development or expansion at the site is effectively paused pending the outcome of the expert review and subsequent court rulings.

Grota do Cirilo is reported as Sigma Lithium’s only productive asset. The mine has a nameplate capacity of 330,000 tonnes of lithium oxide concentrate on an annualised basis, underscoring its central role in the company’s operations.

With environmental licenses suspended and mining activities halted, this capacity is directly affected. The injunction therefore has an immediate impact on the company’s ability to produce and supply lithium concentrate from Brazil.

Future production at Grota do Cirilo now depends on the outcome of the georeferencing review and any subsequent judicial determinations on the project’s compliance with requirements for engagement with the Baú Quilombola community.