Sigma Lithium confirmed it froze production at its flagship project in Brazil between late September and for the entirety of October in order to upgrade mining equipment, which curtailed output in the period.
Sigma on 6 October said that it would be enhancing its mining efficiency by switching feedstock providers and upgrading equipment at its Grota do Cirilo mine, in Brazil. The plant began to phase down in September and was shutdown in October, which led to a "significant production decrease," the company's chief executive Ana Cabral said during an earnings call.
Third quarter output fell to 44,000 metric tonnes (t) of spodumene, a 27pc decrease over the year and a 36pc sequential drop from the previous quarter. Sigma also failed to export any material in October because of the mining halt.
The mine was restarted earlier this week and will ramp up back to normal production levels in the next 2-3 weeks, Cabral said.
Sigma declined to share its fourth quarter production guidance, saying it would do so after production resumed. Given the upgrades, however, the company expects to produce 73,000t in the first quarter of 2026, which would be a 6.8pc increased compared to the same period this year.
The miner also revised the delivery timeline for its first expansion, now scheduled for completion by the end of 2026, which will lift Grota do Cirilo's total capacity to 520,000t/yr from 245,000t/yr today.
It sold 48,600t of spodumene for a total net revenue of $28.5mn in the third quarter.
Li tailings will be sold to China
Sigma will also begin to sell chemically unaffected dry lithium tailings to Chinese buyers in order to maximize profits and monetize "all lithium we have", Cabral said.
The company plans on offloading 950,000t of dry, solid mining byproducts with 1-1.3pc lithium concentration to buyers in China. The company quoted the tailings — which it calls "lithium middlings" — at $120/t at current market prices, which would bring $33mn of additional revenue in the fourth quarter, according to Cabral.
There are 100,000t of "middlings" stocked at the port of Vitoria and another 850,000t at the mine, with shipping to China priced at $40/t and $85/t, respectively.
Sigma commits first Li batches
The company said it secured two offtake agreements with different clients and is negotiating a third to be sealed by year's end.
Sigma has, for the first time, committed 100,000t of spodumene to two different customers through long-term offtake agreements.
The first agreement covers 80,000t and is structured as a three-month rolling contract at market prices. Under this arrangement, the customer prepays for upcoming production, with payments extending until 30 March 2026. Sigma plans to use the funds as working capital.
In the second offtake, the customer has paid $25mn up front in exchange for 20,000t of production over the next three years. Sigma intends to use this funding to support its recent mining upgrade.
The company is also negotiating a third offtake with a European-based trading company to partly fund its expansion plans. It expects to close a three-year contract for 40,000t, valued at $51mn upfront, by year-end —bringing total committed production to 140,000t.
Additionally, Sigma is in talks for two more offtakes totaling 260,000t, scheduled to close in 2026: one for 80,000t over three years at $100mn, and another for 40,000 t over three years at $51mn. The proceeds from these agreements will be used to repay shareholder debt and fund growth initiatives, respectively.
Overall, the miner is set to commit 400,000t of spodumene by the end of 2029.
