On Friday, lithium mining concept stocks trended lower. At the time of writing, Sigma Lithium (SGML.US) was down more than 9%, Lithium Americas (LAC.US) fell over 5%, and Albemarle (ALB.US) declined more than 6.5%.
The decline follows a recent order from Brazil's Ministry of Labor directing the closure of three tailings piles at Sigma Lithium's flagship lithium project in Minas Gerais. The ministry cited "serious and imminent risks" to workers and the local community.
This lithium mine is Brazil's largest project, with an annual production capacity of approximately 270,000 tonnes of lithium concentrate. It has been suspended since last October, with its restart repeatedly facing obstacles.
Sigma Lithium issued a statement denying any safety hazards, stating that the closed tailings piles contained only soil without pollutants. The company asserted that the related restrictions would not affect its overall operations or restart plans.
However, the Ministry of Labor pointed out that if the tailings piles were to collapse, they could potentially bury nearby residences or flow into the Piauí River, indicating that risks remain.
Due to the lack of a clear timeline for the project's restart, Bank of America downgraded its rating on Sigma Lithium last week.
Furthermore, the Ministry of Labor rejected Sigma's appeal to lift the closure order, requiring the company to submit corrective documentation to prove the related issues have been resolved.
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