Brazilian inspectors fine Sigma Lithium for using banned waste pile

By Fabio Teixeira

RIO DE JANEIRO, May 11 (Reuters) - Brazilian labor inspectors have fined Sigma Lithium SGML.V for depositing waste in a pile that they had shut down because it posed a "grave and imminent" risk to workers and the local community, the inspectors told Reuters in a statement.

Three of Sigma's waste piles had been shut down last December, but during a Thursday visit to a town near Sigma's work site in Minas Gerais state, inspectors found that trucks were still depositing waste onto one of them.

The miner, Brazil's largest lithium producer, announced in February that it was resuming mining activities at its flagship Grota do Cirilo mine despite the piles, where it deposits the waste from its mining activities, being shut down.

The labor inspectors fined Sigma 10,000 reais ($2,041.48), the firm said in a Tuesday statement, adding that the "ongoing administrative enquiry" does not have a material effect on Sigma's mining activities, and that reports that denominated its waste piles as "banned" are "fake news."

At the time the piles were shut down late last year, a labor inspector reported a “partial rupture” at one near a school in Poco Dantas, a community nearby. That is the same waste pile Sigma was found using again.

The mine, Sigma's only productive asset, has an annual capacity of around 270,000 metric tons of lithium concentrate. It had been inactive since October, when Sigma dropped a contractor that operated it.

It is unclear what steps the Brazilian government could take next if the firm continues to use the pile despite the order to shut down the waste piles.

The inspectors have also fined Sigma for not allowing them to enter its work site to assess working conditions, something they are legally allowed to do, they said. But inspectors were able to see the waste pile being used from outside Sigma's site.

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 jeopardizing the continuity of mining activity."

Brazil's mining regulator ANM has previously said that the waste piles did not offer imminent risk, but its assessment does not cancel out the order by labor inspectors, who work independently under Brazil's Labor Ministry.

In its Tuesday statement, Sigma said the ANM assessment was "the definitive technical opinion over the safety of the company’s waste piles."

($1 = 4.8984 reais)