Sigma Lithium said it won an appeal in Brazil overturning a lower-court ruling linked to environmental concerns surrounding its Grota do Cirilo lithium project in Minas Gerais state, removing the risk of a potential $10mn legal guarantee tied to the case.

The company said a state appeals court reversed a decision issued in May by a judge in Araçuai concerning allegations of improper waste disposal and environmental impacts affecting nearby communities. The earlier ruling had required precautionary measures requested by prosecutors, Mining.com reported.

Sigma said the Minas Gerais court instead ordered the company to appoint an independent technical adviser to monitor dust, noise and vibration impacts, a requirement the miner said it fulfilled.

After analysing environmental data collected over 12 months and reviewed by external specialists, the court ruled in favour of Sigma, according to the company.

The dispute followed reports that Brazilian labour inspectors had fined Sigma over waste deposits placed on a stockpile previously shut by authorities because of alleged safety risks to workers and residents.

“The data-based defence presented by the company debunked the claims made by local prosecution and was accepted by the state court judge,” Sigma said.

Shares in Sigma rose as much as 5% following the announcement before trimming gains.

The ruling removes a possible obstacle to Sigma’s expansion plans at Grota do Cirilo, one of the largest hard-rock lithium projects in the Americas.

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