Sigma Lithium shares sink after Brazil regulator orders mine halt

Oct 1 (Reuters) - Sigma Lithium SGML.V said on Thursday it had temporarily suspended mining and industrial production at its Grota do Cirilo operation in Brazil while awaiting a ruling by a federal appeals court, sending its Toronto-listed shares down more than 19%.

The suspension at the company's sole producing mine came a day after Brazil's mining regulator ANM ordered a halt to mining activities there, citing an unspecified "imminent risk," according to a document seen by Reuters.

ANM ordered immediate corrective work on the eastern slope of the mine's north pit, citing a "ruptured section", and said the area would remain closed until the work is completed.

Sigma said all mining and industrial production was suspended on Sept. 30 as it awaited a federal appeals court review of its emergency motion challenging a preliminary injunction tied to its environmental licences.

The company said it would continue commercial and recycling operations during the suspension, including sales of high-purity lithium fines, which it said would continue generating cash flow.

Despite the disruption, Sigma maintained its fiscal 2027 production forecast of 330,000 metric tons of lithium oxide concentrate, but said it would postpone by three months its 12-month production forecast of 240,000 metric tons.

Reuters had reported in early September that a Brazilian judge ordered the suspension of environmental licenses and mining activities at Sigma Lithium's Grota do Cirilo mine.

The injunction stems from a civil suit brought by the Federation of Quilombola Communities of Minas Gerais, which argues that Sigma's project falls within the area of influence of the Bau Quilombola community.

Quilombolas are traditional communities of African descent whose territories are protected under Brazilian law.

Sigma disputes the claim, saying its operations do not adversely affect nearby Quilombola communities and that the project lies outside the relevant impact zone.

The company said it would pursue additional appeals if the Federal Court of Appeals rules against it.