A Brazilian appeals court overturned a suspension of Sigma Lithium’s environmental licenses, letting it keep operating under its existing permits.
- The court cited the economic damage a long shutdown could cause in the Jequitinhonha Valley.
- Sigma Lithium says no recognized Quilombola settlements were within 12 kilometers of its project when it was licensed.
- The company reaffirms its target of a 330,000-tonne annualized production rate by the end of 2027.
Sigma Lithium Corp. (SGML) stock jumped more than 8% overnight late Tuesday after a Brazilian federal appeals court overturned a suspension of the company’s environmental licenses at its Grota do Cirilo lithium project.
Sigma Lithium stock is on track to snap two weeks of losses. It plummeted more than 25% in September, marking its worst month in more than a year.
Court Decision Clears Operations For Sigma Lithium
A federal appeals court overturned an emergency suspension imposed by a lower court in September and restored Sigma Lithium’s ability to operate under its existing environmental permits. The federal judge cited the potential long-term economic damage an extended shutdown could cause in the Vale do Jequitinhonha region.
The company estimates its operations, supply network and social programs support about 19,000 direct and indirect jobs and roughly 80,000 family members across 12 municipalities.
The lawsuit was filed by Ngolo, representing local Quilombola communities, traditional Afro-Brazilian groups with roots dating to slavery. Ngolo claimed that the mine could affect the nearby Bau Quilombola community. Sigma Lithium said government records showed no recognized Quilombola settlements within 12 km of its project when it approved its licenses in 2023. The company also said the new area claimed by Ngolo is much larger than the original request and does not cover its mining operations.
Sigma Lithium Production Target Remains Intact
Sigma said the ruling restores its confidence in reaching an annualized production rate of 330,000 tonnes of lithium oxide concentrate by the end of 2027. The company’s Cleantech Industrial Plant has previously processed more than 950 tonnes of lithium oxide concentrate in a single day.
Plant upgrades helped Sigma Lithium increase production, with output exceeding 1,000 tonnes on several days. Sigma also said the local economy grew, with GDP rising 108% in Araçuaí and 91% in Itinga from 2021 to 2023. The 2026 state elections increased the Jequitinhonha Valley’s political representation in Minas Gerais. The state will also play an important role in Brazil’s presidential runoff on Oct. 25.
SGML Stock: Retail View
On Stocktwits, retail sentiment around the stock changed to ‘neutral’ from ‘bearish’ territory the previous day.
A user said, “Overturning the lawsuit is great; the election results and trends have more to do with the future. Look forward to some deals now in the near future if the leftists are gone.”
SGML stock has cratered 26% year-to-date.
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