Sigma Lithium operates in the municipalities of Araçuaí and Itinga Disclosure/Sigma Lithium The State Secretariat for the Environment and Sustainable Development of MG (Semad) suspended part of the activities of Sigma Lithium, the largest lithium producer in Brazil, in the Vale do Jequitinhonha region, in Minas Gerais. The measure affects the licenses of the two extraction fronts that supply the company's factory, in Araçuaí and Itinga. According to the State Environmental Foundation (Feam), the department's body that determined the suspension, the inspection showed damage to watercourses in preservation areas, irregular deforestation, use of groundwater and the start of exploration before the licenses stipulated. ?Click here to follow the g1 MG channel on WhatsApp ?Lithium is essential for electric and electronic car batteries. The Jequitinhonha Valley, owner of the largest mineral reserves in the country, became the target of billion-dollar investments (understand the context at the end of the report). The suspension of Sigma Lithium's activities is recorded in infraction notices signed by Semad technicians in July. The company was formally notified on July 13, the date on which the penalty came into effect. In one of the documents, Feam determines the embargo of activities linked to the licenses for the North and South pits, the only ones in operation in the Grota do Cirilo complex. The suspension was revealed by the portal "O Fator" and confirmed by g1. Find out how Brazil is exploring lithium, used in batteries for cell phones, laptops and electric vehicles Company denies irregularities The government claims that the embargo was applied immediately and remains in force until the company corrects the problems highlighted or enters into an agreement with the public authorities. Sigma Lithium denies wrongdoing. In a statement to investors released this Wednesday (22), he states that the suspension is "partial and temporary" and that he is negotiating an agreement with the government of Minas Gerais to resume activities. The statement also says that the company will pay fines of around US$540,000 (R$3 million), part of which relates to facts from 2013 to 2022, and denies having provided false information or sold lithium before May 2023, the year to which the irregularities refer (find out more below). Water, forest and early extraction According to Semad, an inspection carried out at the end of May found interventions in four watercourses and their preservation areas for the installation of mining company structures. Technicians also pointed out unauthorized vegetation removal, groundwater extraction and impacts on neighboring communities. The agency also maintains that, based on the history of satellite images, the company would have started extracting the ore before obtaining licenses from the State Environmental Policy Council (Copam). Cost to make adjustments To put the required adjustments into practice, Sigma estimates spending around US$1 million, in addition to the fines - which, according to the company, only expire in at least 120 days. The company states that the Conduct Adjustment Term (TAC) is a common type of agreement in Brazil, in which the company undertakes to correct flaws within deadlines defined with the environmental agency. The company also stated that it was the target of a "false information campaign" after the notification, which would have coincided with the announcement of positive production results in the second quarter. Sigma says it is in contact with regulatory authorities, including the US market regulator. The Jequitinhonha Valley region is rich in lithium production. TV Globo/Reproduction Understand the context Sigma Lithium is a Canadian-Brazilian mining company that began operating in the Jequitinhonha Valley in 2023 and is today the largest lithium mining company in the country in terms of production volume. Before it, Companhia Brasileira de Lítio (CBL) had already been operating in the region since 1991, while AMG produces the ore in another part of Minas. Lithium is a strategic mineral, mainly used in the manufacture of batteries for electric cars and electronic devices. Global demand has grown in recent years, and the Jequitinhonha Valley, which has the largest known reserve of the mineral in Brazil, has started to attract billion-dollar investments, in the project that the state government has named "Lithium Valley". At the same time, the expansion of mining in the region has generated concern among local communities and university researchers, who point out impacts on access to water and traditional peoples. MG interior in the crosshairs of the race for lithium g1 Most watched videos of the g1 MG