Nasdaq-listed Sigma Lithium Corporation has announced its intention to appeal against a decision made by a court based in Aracuai, Vale do Jequitinhonha, Brazil, where the company operates the largest lithium oxide concentrate plant in the Americas, called Grota do Cirilo.

The court’s latest decision includes the potential for a legal collateral of $10-million for the local court, which would only be due in the event that the charges against Sigma result in a final negative ruling after the full due legal process is completed.

The other elements in the ruling are also not expected to be enforced until the completion of due legal process. Legal jurisprudence for similar cases indicates a timeline of multiple years until this happens.

As such, no payments are due or required.

However, Sigma believes the decision is unwarranted and in dissonance with Brazil's strong rule of law, with due process not having been followed.

The company says it filed a significant amount of legal evidence with the court.

The “surprising” ruling followed a visit by legal authorities to Sigma’s operations, where the company’s conformity with all Brazilian environmental rules was verified, including the absence of tailings dams and 100% dry stacking for tailings; 100% reuse of water by the Greentech processing plant; bio-regeneration of the company’s rock piles; low levels of noise and low levels of dust.

In fact, the visit by the legal authorities coincided with a public hearing held for the local community where more than 200 people from Sigma’s neighbouring communities attended to demonstrate their support for the 19 000 jobs created by the company in the region.

Sigma further expresses concern about a negative online media campaign that disseminated false, inaccurate and misleading information about Sigma – and this prior to the official issuance of the latest legal decision in Vale do Jequitinhonha.

As the continent’s largest producer of lithium oxide concentrate, the company says it remains dedicated to industrialising sustainable lithium material that is socially and environmentally responsible.  

Grota do Cirilo has a nameplate capacity of 270 000 t of lithium oxide concentrate at its mine at Greentech industrial plant. Sigma aims to start a Phase 2 expansion project designed to nearly double production capacity to 520 000 t/y.

LEGAL BACKGROUND

Reuters reported earlier this month that Brazilian labour inspectors fined Sigma for depositing waste in a pile that they had shut down owing to it posing a grave and imminent risk to workers and the local community.

Three of Sigma’s waste piles had been shut down in December last year, however, inspectors claim to have found trucks were still depositing waste onto one of them in mid-May.

Reuters said the labour inspector who visited the site of the mine on November 12 last year reported a "partial rupture" of one of the piles near a school in the small town of Poco Dantas, which he cited as evidence of structural issue that Sigma would need to prove had been fixed.

Sigma was focused on resuming mining activities at Grota do Cirilo following the piles having been shut down in December. Sigma is suing the Brazilian government to overturn the shutdown order and said in legal filings that losing access to the piles would cause significant operational and economic impacts, in addition to jeopardising the continuity of mining activity.

The inspectors also fined Sigma for not allowing them to enter the work site to assess conditions, but the inspectors allege they were able to see the waste pile being used from outside Sigma’s site. Brazil’s mining regulator ANM previously said the waste piles do not offer imminent risk but its assessment does not cancel out the order by labour inspectors, who work independently under Brazil’s Labour Ministry.