Brazilian Court Orders Suspension of Grota do Cirilo Lithium Mine

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Written by Amir Richani for IIR News Intelligence (Sugar Land, Texas)

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Summary

A judge ordered the suspension of operations at Sigma's Grota do Cirilo spodumene mine in Brazil, the nation's largest lithium mine. Meanwhile, Sigma reported that its operations remain unaffected. This is not the first time operations at the asset have been suspended.

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Operations to Cease

A federal judge in Minas Gerais, Brazil, ordered the suspension of activities at Sigma Lithium's Grota do Cirilo spodumene mine in Minas Gerais following a lawsuit filed by the the Federation of Quilombola Communities regarding the mine's impact on the nearby Bau Quilombola community.

The Grota do Cirilo is a spodumene mine with the capacity to process 1.5 million tonnes of ore and produce 270,000 tonnes of lithium oxide concentrate per year, about 38,000-40,000 tonnes of lithium carbonate equivalent (LCE) per year.

Industrial Info Resources data show the Grota do Cirilo mine accounts for six active projects, representing investments of US$188 million. Among them are the plant's expansion and new deposit, which would double processing to 3.7 million tonnes of ore per year and production capacity to 520,000 tonnes of lithium oxide concentrate per year.

Sigma, for its part, issued a statement on September 7 saying that its mine remains operational, and that the company is focused on its expansion plans and reaching its production targets.

"Mining and industrial activities continue operating, and the Company has not received any legal communication regarding a preliminary judicial ruling issued without due process, allegedly suspending its environmental licenses," said Sigma in a statement.

The suspension was dictated after the judge's review of a study highlighting that the mine was located approximately 2.7 kilometers (km) (1.7 miles) from the affected community area, below the 8 km requirement.

Sigma Lithium, however, highlighted that the project lies outside the 8-km impact area of the community using the Brazilian Institute of Geography and Statistics census reference point associated with the community. As a result, the judge ordered an expert georeferencing review to determine the exact distance.

As a result, new studies assesseing the mine's impact on the community, as well as consultations, are required before the licensing process can continue.

The judge also restricted the state of Minas Gerais and its environmental agency from granting the Grota do Cirilo mine any new licenses, expansions or corrective licenses until the requested studies are completed.

Including Sigma's asset, Industrial Info Resources is tracking four active lithium mines in Brazil; however, Grota do Cirilo is by far the country's largest.

Previous Restrictions

This is not the first time authorities have restricted Sigma Lithium's operation. During the week of July 17, the Grota do Cirilo mine and plant were temporarily paused as the company and the Minas Gerais state government negotiated terms for an adjustment-of-procedures agreement. Operations restarted on August 21, after the agreement, which included a US$540,000 fine.

Following the August restart, ,the company expected output of 240,000 tonnes of lithium oxide concentrate within 12 months, with a projected production of 330,000 tonnes in 2027.

Lithium for Brazil

Brazil holds one of the world's top ten largest lithium resources and is the sixth largest producing country, according to the United States Geological Survey (USGS).

The government of Luiz Inacio Lula da Silva has backed mining developments with the aim of expanding domestic supply chains, increasing local mineral processing and boosting the production of higher-value-added products. Lithium plays a key role in this effort as it enables the development of lithium batteries and electric vehicle supply chains.

At the same time, on September 2, the Brazilian Senate approved a bill to create a national policy for critical and strategic minerals that includes incentives to increase production, processing and transformation of critical minerals such as lithium.

Overall, Industrial Info Resources maps 31 lithium projects in Brazil, representing investments of US$1.99 billion.

Key Takeaways

• Judge orders shutdown of Sigma's Grota do Cirilo mine due to distance from the community.
• Sigma says that operations remain unaffected.
• Industrial Info Resources is tracking six active projects at the mine worth US$188 million.

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About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, Industrial Info Resources is tracking over 250,000 current and future projects worth $30.2 trillion (USD).