Once a lithium darling, Sigma’s woes mount with 29% stock rout
Sigma Lithium is plunging amid growing doubts about near-term production and potential delays to a key expansion project.
In a sharp reversal for a stock once seen as an industry darling, Sigma has lost almost one-third of its market value this week for the worst two-day slump in 21 months. On Tuesday, the stock was down more than 7%, making it one of the worst performers in an index of lithium producers.
Late Monday, BMO Capital Markets joined a growing chorus of analysts tempering outlooks after Sigma abruptly changed mining contractors last month as part of measures the company said were aimed at improving efficiency at its flagship Brazilian mine.
Plans to begin using larger trucks and modernise some gear may inflate capital-spending requirements and slow an expansion project, analysts said.
“We’re not sure of the exact reason for recent volatility in the stock but know there are many questions around the change in mining contractor, the balance sheet, etc., causing SGML to underperform this lithium rally,” BMO analyst Joel Jackson wrote in a note to clients.
Bank of America has been ringing alarm bells as far back as August, highlighting the potential implications of increasing delays in payments to vendors. Late last month, the bank downgraded Sigma shares from buy to neutral.
Sigma is grappling with weaker prices for the battery metal and heightened investor scrutiny. The company didn’t immediately respond to a request for comments.
Sigma shares are down more than 50% this year after losing 64% of their value in 2024.
The global lithium market has been in turmoil amid slower-than-expected growth in electric-vehicle demand that’s been compounded by US President Donald Trump’s revamp of clean-energy policies in the world’s largest economy.
Sigma is scheduled to release third-quarter results on November 14.